Box 2 allows someone who lives in the same household as a forfait payer to elect to pay only the minimum personal capital tax, regardless of their own income, assets or wider financial circumstances. Until now there has been no limit on how many people in a single household could claim the relief, meaning one forfait payment could support several minimum-tax elections.
The approved amendment keeps Box 2 but prevents a single forfait payment from being used to give an ‘uncapped tax advantage’ to multiple members of the same household. Where more than one person would otherwise claim it, the household will decide which individual makes the election – if more than one still does, the tax assessor will ask them to choose, and failing that will treat the first declaration received as valid.
Policy & Finance Committee member Conseiller Carol Cragoe said the measure was ‘a limited and targeted change for the 2027 tax year’.
‘It responds to the need for fairness and revenue protection while respecting the consultation feedback that wider tax reform should be developed more carefully for 2028,’ she said. ‘It keeps Box 2 in place, preserves a simple option for one eligible member of a forfait-paying household, and introduces a proportionate safeguard against multiple minimum personal capital tax elections.’
The committee said an unrestricted Box 2 had allowed people ‘who may have the capacity to make a substantially greater contribution’ to limit their liability to the minimum simply because of their household circumstances, shifting the burden onto other taxpayers.
It said it was not possible to estimate precisely how much extra revenue the change would raise, because Box 2 eligibility does not depend on disclosing a person’s assets, but that the measure was not expected to cause any loss of revenue.
The wider future of Box 2, including whether it should be scrapped altogether, will be considered as part of the comprehensive tax reforms planned for 2028.
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