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Press Release - Double Taxation Agreement - Signed by Guernsey with the UK

For immediate release: 15th November 2018

On 2nd July 2018 a new double tax agreement was signed by Guernsey with the UK.
It has an important impact on those with second homes in Alderney who are UK tax resident. If they spend more than 90 days in Alderney (during which time the UK remains the centre of their vital interests) then with effect from 1st January 2019 they will only be subject to Guernsey tax on Guernsey source employment, business and property income.

The background here is that people who currently spend longer that 90 days in the Bailiwick become Guernsey tax resident as well as being resident in their home country: they are what is called dual resident. This means that their UK and other income is liable to Guernsey tax. They are therefore taxed twice on the same income. There has been some relief for double taxation but it has been complicated to obtain and has only been available for some types of income.

The new treaty replaces this with a complete exemption on all forms of income. The only exceptions are Guernsey employment, business and property income. Most UK second homers will not have a job or a business in Guernsey. Some will be receiving rent from a property here; this income will continue to be taxed in Guernsey.

For the new exemption to apply the UK has to remain the person's 'centre of vital interests.' This will be the case with UK second homers as their main home will be in the UK.
The exemption has to be claimed and the States will be discussing with Guernsey how the claims procedure can be made as simple and straightforward as possible.
Unfortunately second home owners who are not UK taxpayers cannot benefit from the new treaty. So their position in regard to the 90 day rule remains the same as before.

Notes to Editors: For further information, please contact Andrew Muter: