Income Tax in Guernsey

Personal Income Tax Rate:

• Guernsey residents are indeed subject to a flat personal income tax rate of 20% on their worldwide income ¹.
• This rate applies to various forms of personal income, including employment, pensions, rental income, and investment income ¹.

Tax Allowances:

• Guernsey residents are entitled to personal allowances that reduce their taxable income. These include standard allowances for individuals and married couples, as well as allowances for children and other dependents ¹.
• There is also an age-related allowance for individuals over a certain age ¹.

Tax Cap:

• Guernsey offers a tax cap for residents, which limits the maximum amount of income tax an individual can pay. The cap varies depending on the source of income ¹.
• For example, a cap is applied to income derived from Guernsey sources, and a different cap applies to worldwide income ¹. This helps high-net-worth individuals manage their tax liabilities ¹.

Corporate Income Tax

• The standard corporate tax rate is 0% for most types of income ². However, specific types of income, such as profits from regulated financial services businesses, are taxed at higher rates (10% or 20%) ².

Capital Gains Tax in Guernsey

Capital Gains Tax:

• Guernsey does not levy a capital gains tax ¹. This means that individuals and companies are not taxed on the profits made from the sale of assets such as property, shares, or other investments ¹.
• The absence of capital gains tax is indeed a significant advantage for investors and businesses operating in or relocating to Guernsey ¹.

Key Points to Remember

• No Capital Gains Tax: Guernsey does not tax capital gains, making it an attractive jurisdiction for those who derive significant income from investments ¹.
• Flat Income Tax Rate: The flat 20% income tax rate, combined with personal allowances and tax caps, offers a straightforward and potentially favorable tax environment for residents ¹.

This tax structure, particularly the lack of capital gains tax and the capped income tax system, contributes to Guernsey’s reputation as a tax-efficient jurisdiction ¹.

If you have any more questions or need further details, feel free to ask!

¹: PwC - Guernsey, Channel Islands - Individual - Taxes on personal income  ²: PwC - Guernsey, Channel Islands - Overview