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Guernsey: Domestic Corporate Taxion

Taxation of Insurance

In Guernsey there are various special regimes for taxation of insurance companies.

A life insurance company, or the life insurance business of a composite insurer, is taxed according to the decision of the Administrator, either

  1. as a normal business, with investment gains and losses being counted in (other than profits reserved or expended for policy-holders or annuitants); or
  2. on the basis of gross investment income adjusted for various types of expense and income, as long as the final taxable amount is not less than it would be under 1., with any excess being carried forward as a loss to future years.

(NB: This is a highly simplified version of a set of complex rules).

Depending on their circumstances, other types of insurer can choose between a number of different taxation regimes:

  1. to be taxed as normal businesses;
  2. to be taxed on a sliding scale - the rules are complex, but broadly this results in no tax on underwriting profits, 20% income tax on Guernsey income and on the first £250,000 of other (investment) income, and a nominal rate of tax on the balance;
  3. to be an Exempt Company; or
  4. (an irrevocable choice) to be an International Body.

It is impossible here to set out the bases on which a choice might be made, since so much depends on the nature and circumstances of individual companies.



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