Individuals may need to take advice on the timing of their move to Jersey, particularly with regard to:
- the date of departure from the territory where they were formerly resident to the end of the tax year in that territory, in order not to be assessed for subsequent periods unnecessarily; and
- acquiring a new residence status in Jersey.
New residents should review their investments before moving to Jersey. Investments which may be tax exempt in the individual's home country, for example, TESSAs or PEPs held by individuals moving from the UK, will generally not be tax exempt in Jersey. Where appropriate such investments should be realised before the individual becomes resident in Jersey. New residents will also want to consider the incidence of other tax liabilities such as withholding taxes on income and taxes on capital on the investments that they continue to hold outside Jersey.
It may be important for UK tax purposes to provide evidence of the acquisition of a domicile of choice in Jersey. This will generally involve severing connections with the immigrant's former domiciliary territory, such as club memberships, ownership of real property, etc, and taking steps to indicate an intention permanently to reside in Jersey. By custom, this will include the making of a will in the Island, where the laws of succession are to some extent based on ancient Norman law.
Under the "deemed domicile" rules of UK inheritance tax, a person who abandons his UK domicile in favour of a domicile of choice elsewhere is deemed to remain domiciled in the UK for a period of three years after the actual change of domicile. However, certain UK government securities are exempt from these deemed domicile provisions, so that persons whose assets at death are composed entirely of these securities and who are domiciled in Jersey but deemed, for inheritance tax purposes, to be domiciled in the UK can still avoid all inheritance tax.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
For further information contact Jonathan G. Hooley on Tel (indirect line): + 44 (0) 1481 721000, Tel (direct line): +44 (0) 1481 719544, Fax: +44 (0) 1481 722373.