It is possible to cap exposure to income tax in Guernsey as an alternative to paying a flat rate of 20%, after personal allowances and deductions.
The maximum tax liability for any individual who does not have Guernsey source income is £160,000 per annum.
For those who have both Guernsey and non-Guernsey source income, (Guernsey bank interest does not count as Guernsey source income) the maximum tax liability is £320,000 per annum, although tax is payable on income arising from Guernsey land or buildings in addition to the cap amount.
It is also possible to cap the non-Guernsey source income at £160,000 and pay 20% on any Guernsey source income if this is beneficial.
Foreign and worldwide tax caps are not limited in duration and are applicable no matter how many years the individual has been solely or principally resident in Guernsey.
Additionally, Guernsey also offers an “Open Market Tax Cap”, available for up to the first four years of Guernsey residence. The Open Market Tax Cap is currently set at £60,000* per annum, and is subject to the conditions listed below:
An individual must:
- Be resident in Guernsey
- Pay £50,000 or more in document duty for the purchase of an Open Market property. At the current rates this equates to duty payable on a property purchase of £1.4 million or more.
- Make the purchase either 12 months before or after the date of taking up residence in Guernsey.
The £60,000* cap covers the tax due on both overseas and Guernsey income, except for income from Guernsey land and buildings, which remains taxable at 20%, in addition to the tax cap paid.
*The Open Market Tax Cap was £50,000 from 2018 to 2023, and increased to £60,000 in 2024. Anyone who qualified for this cap up to and including 2023, will pay the amount of £50,000, for all 4 years.
The information on this web page is provided as a general guide and does not constitute professional tax advice. Further detailed information can also be found on the website of the Guernsey Revenue Service.