The States is being asked to endorse the Policy & Resources Committee’s plan for an ‘entrepreneur tax cap’, designed to encourage entrepreneurial talent to relocate to the Bailiwick and sharpen the island’s competitiveness against rival jurisdictions. The detail of the scheme would be worked up jointly by the Policy & Resources and Economic Development committees.
P&R’s treasury lead, Charles Parkinson, said the concept was completely different to existing tax caps already in place to incentivise wealthy people to relocate to the island.
‘All of these tax caps are elections by the taxpayer. In other words, the taxpayer elects to benefit from the tax cap, if they are eligible to do so. Guernsey does not choose the individual concerned,’ he said.
‘Now, for the first time, Guernsey proposes to introduce a tax cap which targets a certain kind of individual.
‘Generally, this would target serial entrepreneurs with a proven track record of launching new businesses. We would expect the qualifying individuals to be typically of a younger age than the people who traditionally move to Guernsey.’
While the details of the new scheme were yet to be worked up, Deputy Parkinson expected it to contain several features, including requiring an applicant to produce a credible plan to launch a new business which would ideally help to diversify the island’s economy and employ a certain number of people within an agreed period.
He also thought the cap would be time-limited, applying for the first few years after the entrepreneur had moved to live in the island.
The proposal comes as the committee also moves to raise several of the island’s existing tax caps – arrangements that let wealthy residents limit their annual income tax bill to a fixed sum rather than paying in full on all their income.
A ‘discreet consultation’ on the caps found that one of Guernsey’s biggest strengths was the ‘simplicity and certainty’ of the regime, and that there was a strong case for keeping it. But with most of the caps last raised for 2024, P&R is proposing to increase them.
The cap on non-Guernsey source income and Guernsey bank interest would rise from £160,000 to £171,000 in 2027, and the cap on worldwide income from £320,000 to £342,000. Both would then rise annually in line with inflation.
The biggest changes are to the open market tax cap, which applies for four years to people who move to the island and buy a qualifying open market property. The cap, unchanged since 2018, would rise from £60,000 to £65,000 in 2027, then climb in stages to £75,000 in 2028, £85,000 in 2029 and £95,000 in 2030 – set out in advance, the committee said, to give incomers certainty. The amount of document duty a buyer must pay to qualify would also increase, from £50,000 to £70,000, for properties bought from January 2027.
The equivalent Alderney Property cap, introduced only in 2025, would be left unchanged at £60,000, reflecting lower house prices in Alderney.
The committee is not proposing any change to the standard charge – the minimum tax bill for those resident in Guernsey for tax purposes only – saying the £50,000 charge had ‘more than kept pace with inflation’ since it was introduced in 2009.
The measures sit within a Budget with a focus on attracting investment and talent to help close the island’s structural funding gap, estimated at £47m. next year.
In 2024 Locate Guernsey, the government arm which seeks to attract and assist high-net-worth individuals to move to the island, said it facilitated 21 relocations – six personal and 15 for businesses.
The agency has also said that it advised nearly 800 people looking to move to the island in 2025, and that relocation inquiries have nearly quadrupled since the Covid pandemic.
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