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Jersey Assesses UK Stamp Duty Measures

Thursday, March 29, 2012

Jersey Finance, the agency responsible for the promoting the island's finance industry, has responded to measures in the UK budget which seek to prevent stamp duty tax avoidance on the purchase of high-value residential property in the UK via offshore company structures.

Jersey Finance's CEO Geoff Cook called for a "measured approach" to understanding the implications of the UK budget, suggesting that the change to tax rules around the use of offshore structures to purchase UK residential property will not have a major impact on the island's financial services industry.

In the latest budget, UK Chancellor George Osborne introduced a 7% stamp duty on purchases by non-resident individuals of residential property worth more than GBP2m (USD3.2m), and 15% for residential property purchased by offshore companies. He has also proposed an annual levy on legal entities that have previously purchased high-value properties in similar transactions, and is to launch a consultation on imposing capital gains tax on their sale. The use of offshore structures has historically allowed stamp duty as low as 0.5% to be paid on property purchases, and such structures have been used in the past as a means of avoiding the UK's 40% inheritance tax.

Responding to the measures, Cook said: "The changes proposed are fiscal measures designed to increase revenues to the UK Treasury through the collection of stamp duty on UK residential property worth GBP2m or more. While this is important business for the Channel Islands' finance sector, it is very much a single service within a broad and deep portfolio of services that the islands offer."

"The demand for such properties has been much in evidence from overseas buyers many of whom will still see the purchase of London-based residential property as an attractive proposition despite the imposition of the additional stamp duty charge. It is also important to note that, unlike the changes to Low Value Consignment Relief, these proposals do not relate to a specific sub-industry, but only to a particular and specific use of offshore companies. The changes apply to all offshore companies wherever they are located in the world, so the islands are not being singled out for specific attention," he added.

Responding to suggestions that the budget announcements might impact jobs in the finance industry, Cook again called for a measured examination of the facts. He said: "As with any budget announcement, a significant period of review of the detail is needed before all implications can be understood. There will now be a lengthy period of consultation regarding the proposed changes and this will allow Jersey Finance, working alongside industry and the government, to consider the detail of the changes and respond accordingly. It is important to point out that these measures affect neither of the two largest activities in our finance industry, namely the collection and administration of deposits and funds."

Cook stressed that the finance industry in Jersey has weathered the global financial crisis well, with recent statistics showing positive growth trends over the last four years since the height of the crisis. Jersey has a well-diversified finance industry offering services across banking, funds, private wealth and capital markets, Cook emphasized, adding that all of these have shown overall growth since 2008.

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The Report

Offshore Trusts Guide: Introduction

The History of Offshore Trusts
Development of Professional Competence in the Jurisdictions
What Future for the Trust?
The New Age of Transparency
The Swiss Association of Trust Companies
The Society of Trusts and Estates Practitioners

Offshore Trusts Guide: Jurisdictions

Bahamas

Bahamas: Legal Framework and Formation Rules and Fees
Bahamas: 2006 Private Trust Companies Legislation

Barbados

Barbados: Legal Framework and Formation Rules and Fees
Barbados: Supervisory and Licensing Regime and Fees

Bermuda

Bermuda: Legal Framework and Formation Rules and Fees
Bermuda: Supervisory and Licensing Regime and Fees

British Virgin Islands

British Virgin Islands: Legal Framework and Formation Rules and Fees
British Virgin Islands: Special Trusts Act 2003
British Virgin Islands: The Trustee Act 2003
British Virgin Islands: :Supervisory and Licensing Regime and Fees
British Virgin Islands: New Laws on Private Trust Companies
British Virgin Islands: New Private Trust Company Regulations

Cayman Islands

Cayman Islands: Legal Framework and Formation Rules and Fees
Cayman Islands: Supervisory and Licensing Regime and Fees

Cook Islands

Cook Islands: Legal Framework and Formation Rules and Fees
Cook Islands: Supervisory and Licensing Regime and Fees

Cyprus

Cyprus: Legal Framework and Formation Rules and Fees
Cyprus: Supervision, Licensing and Tax

Gibraltar

Gibraltar: Legal Framework and Formation Rules and Fees
Gibraltar: Legislation, Regulation and Supervision

Guernsey

Guernsey: Legal Framework and Formation Rules and Fees
Guernsey: Trusts Law 2007

Isle of Man

Isle of Man: Legal Framework and Formation Rules and Fees
Isle of Man: Supervisory and Licensing Regime
Isle of Man: Uses Clients and Tax Treatment

Jersey

Jersey: Legal Framework and Formation Rules and Fees
Jersey: Supervisory and Licensing Regime
Jersey: Trusts Amendment Act 2006
Jersey: Foundations

Liechtenstein

Liechtenstein: Legal Framework and Formation Rules and Fees
Liechtenstein: Regulation Supervision and Transparency
Liechtenstein: Characteristics of Liechtenstein Trusts
Liechtenstein: Foundations

Madeira

Madeira: Legal Framework and Formation Rules and Fees

Malta

Malta: Legal Framework and Formation Rules and Fees
Malta: The Trust and Trustees Act 2004

Mauritius

Mauritius: Legal Framework and Formation Rules and Fees
Mauritius: Characteristics of the 2001 Trusts Act
Mauritius: Additional Provisions of the 2001 Trusts Act
Mauritius: Tax Treatment

Monaco

Monaco: Legal Framework and Formation Rules and Fees

Nevis

Nevis: Legal Framework and Formation Rules and Fees

Panama

Panama: Legal Framework and Formation Rules and Fees
Panama: Requirements for Acting as Trust Company in Panama

Seychelles

Seychelles: Legal Framework and Formation Rules and Fees

Turks & Caicos

Turks & Caicos: Legal Framework and Formation Rules and Fees
Turks & Caicos: The Voidable Dispositions Ordinance

Vanuatu

Vanuatu Legal Framework and Formation Rules and Fees




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