Jersey first introduced a special tax regime for High Value Residents in 1970 to ensure that wealthy incomers to the island brought with them economic or social benefit.
Since then the scheme has been amended a number times, most recently in 2011. The aim then was to try to attract people who would move their businesses here as well as pay the required amount of tax. We wanted people who would provide employment and social value as well as revenue.
The Taxes office has just completed a review of this most recent incarnation of the tax regime, and it has found that the post-2011 scheme has been successful in attracting more people to relocate here.
We have seen increased tax revenue, and also the added economic benefit of more people bringing their assets with them and establishing new businesses here.
We have seen a more diverse range of people moving here who have not just brought their wealth to Jersey but their equally rich expertise and entrepreneurship. Everyone who has come to Jersey under the new regime has been able to meet their commitment to pay at least £125,000 yearly in tax.
In 2014 thirty-four High Value Residents contributed approximately £4 million of Jersey’s personal income tax revenue. That’s 1% of all the personal income tax paid. This is a significant contribution to the funds that help us provide public services for all islanders. An external review of the tax regime also estimated the wider economic benefits of this tax regime as at least £50-£70 million in 2010.
Our most active wealthy immigrants employ islanders in their enterprises and contribute to our charities, churches, societies and sporting associations. They are associated with new-business set-ups and they continue to give time, expertise and money to Island life. I am also pleased to see High Value families investing in properties and the redevelopment of our larger houses as this provides both employment and income.
The review has recommended improvements to this tax regime.
We plan to create a Minimum Annual Tax Charge to replace the current expected annual minimum income tax contribution. This would apply to new HVRs who relocate to Jersey in, or after, 2018.
We propose to set the Minimum Annual Tax Charge at £145,000 for 2018 and then maintain its value through regular uprating, probably every five years.
I have asked the Taxes Office to develop those ideas over the coming year for consideration by Ministers in the run up to the next Budget.
Most importantly, we continue to welcome people to our island if they can provide economic and social benefit for all islanders.