Jonathan Hunt moved to Guernsey shortly after Covid with his wife and young child, now five, and the family – now including a two-year-old child – has moved to California where he has taken up a job working on the next generation of AI with a major tech firm.
Before coming to the island some five years ago, Mr Hunt worked for Google and X (then known as Twitter) in the UK.
Locally he launched a new tech start-up. He and his business partner established the company in the USA but as a Guernsey-resident shareholder, Mr Hunt was subject to local taxation.
Giving shares to employees as an incentive to encourage them was a common practice among tech companies, he said, to encourage them to stay with the firm.
But while other jurisdictions do not tax an employee on shares owned until their value is realised, once a vesting period has passed, a Guernsey employee who is given shares is taxed on the value of those shares when they receive them, he said.
Mr Hunt took this up with Economic Development and was told it intended to look at the situation. Since then there have been changes but he said they were not for the better.
‘The current system still taxes people at grant value.
‘So if you get shares and the value of the company then goes down, you’ll be paying taxes on the value it was when the share was granted. If the value goes up, that works out in your favour. But you might end up owing taxes on money you never received.’
And there was another matter involving shares which he took issue with – the taxation of shares not yet received.
He said he had been approached by a tech start-up which has secured billions of dollars of funding and was prepared for Mr Hunt to work remotely from Guernsey.
However, if he took up an offer of a percentage of shares over the first few years of employment, if he left he would be expected to pay tax on all of the shares he had been promised, even those he had not received.
‘It’s a punitive exit tax, and what’s bizarre is it only applies to employees,’ he said.
‘Guernsey is a great place to be an investor, but if you don’t have the money and you’re going to get your shares by working hard, it’s a horrible place. That just seems unfair, particularly to younger people.’
He had tried taking the matter up with deputies, he said, but none had met him to discuss it.
The situation with shares, plus dissatisfaction with being compelled to set up a secondary pension scheme in the island, led to his decision to accept the job in California.
Economic Development president Sasha Kazantseva-Miller said she was disappointed to hear Mr Hunt and his family were leaving and she wished them the very best in their new life in California.
She said that the committee had engaged ‘constructively’ with him and others over several years to address the issues raised. Changes were due to come in on 1 January, she said.
‘These changes were developed in close collaboration with the technical sub-committee of the Guernsey Society of Chartered and Certified Accountants, the Revenue Service, and through industry consultation,’ she said.
No technical analysis had been provided to support Mr Hunt’s view that the changes would worsen the situation, she said.
‘No other concerns have been raised, and the Budget proposition received near-unanimous support from States Members.’
She understood that Employment & Social Security was reviewing the points he had made in regard to the secondary pension scheme.
Economic migration was part of the natural ebb and flow of modern economies, she added, and in recent years many new entrepreneurs and re-locators who had come to the island had been complimentary about the island’s openness to business.
‘The Committee for Economic Development remains fully committed to removing barriers for entrepreneurs,’ said Deputy Kazantseva-Miller.
‘We have demonstrated this through multiple initiatives, including changes to share-incentive taxation, and the launch of the Guernsey Enterprise Investment Scheme.’