Jersey: Personal Taxation
Residence and Liability for Taxation
For taxation purposes, an individual may be resident, ordinarily resident, or non-resident. These terms are not statutorily defined. An individual is considered resident in Jersey for income tax purposes if they:
- are physically present in Jersey for more than six months in any one tax year, or
- are present in Jersey for an average of least three months per year over a four year period, or
- are maintaining an abode in Jersey and visit Jersey at some time during the tax year, even for only one day.
Ordinary residence suggests a greater degree of continuity than residence; non-residence is what it says.
Individuals resident and ordinarily resident in Jersey are subject to tax on their world-wide income.
Individuals who are resident but not ordinarily resident are subject to tax on their Jersey income and on any foreign income remitted to Jersey.
Non-resident individuals are taxed on Jersey income only, excluding Jersey bank interest (by concession).
It became clear in May 2002 however that Jersey, along with its fellow UK dependent territories Guernsey and the Isle of Man, would agree to be part of the EU's information-sharing regime, the Savings Tax Directive, whereby financial institutions will be obliged to pass details of income on investments by nationals of EU member states to their home tax administrations.
The EU introduced this information-sharing on July 1, 2005, although Jersey along with Guernsey, the Isle of Man, Austria, Belgium, and a host of 'third countries' including Switzerland, decided instead to opt for a withholding tax on interest income. The withholding tax regime will change to automatic information exchange from January 1, 2015. Initially this withholding tax was 15%, but it rose to 20% on July 1, 2008, and to 35%, on July 1, 2011.