Removing interest relief on let property 'catastrophic'
HIGH net-worth individuals would be put off from coming to Guernsey if tax relief on interest payments for let property was removed, the Guernsey Business Advisory Committee chairman has warned.
Zef Eisenberg said any such policy would have far-reaching consequences.
Treasury has said it was against removing the relief or introducing a cap, but that faces an amendment from Deputies Elis Bebb and Barry Brehaut.
'What very few people realise is that already in Guernsey, there is a restriction on loan interest relief, in that any interest in excess of the property income is not available to carry forward as a loss for offset against future property income, as it is in the UK,' said Mr Eisenberg.
'This already limits some property structures from operating in Guernsey.
'The most damaging and dangerous aspect of this review is that such a tax proposal would also apply to all those Guernsey residents that hold property – via property funds, in their own name or special purpose vehicles – in other jurisdictions.
'In the event that the proposals in this amendment become law, it would be catastrophic for Guernsey and decimate an entire sector, and result in many resident property investors having to relocate to Jersey, the Isle of Man, etc.
'This would truly make a mockery of the goals and aspirations of Locate Guernsey.'
