Understanding Guernsey's tax regime
Guernsey is renowned for its attractive and transparent tax system, offering a range of financial advantages for both individuals and businesses.
Whether you're considering relocating to Guernsey or setting up a company, the island’s tax structure provides simplicity, stability, and competitive rates that set it apart from the UK and many other jurisdictions.
1. Flat rate of Income Tax at 20%
As of the 2025 tax year, Guernsey applies a flat personal income tax rate of 20% for all residents, regardless of income level. This rate applies to all residents, regardless of income level, making the system straightforward and predictable. As of 2025, Guernsey residents also benefit from a personal allowance of £14,600.
2. No capital gains tax, inheritance tax, or wealth taxes
A key benefit of the Guernsey tax system is the absence of several common taxes:
- No Capital Gains Tax (CGT)
- No Inheritance Tax (IHT)
- No wealth or estate taxes
This makes Guernsey especially appealing for individuals focused on wealth preservation and succession planning.
3. Tax caps for HNW individuals
Guernsey offers tax caps to for qualifying residents:
- Non-Guernsey source income cap: Fixed liability for those taxed only on Guernsey-source income
- Full tax cap: Available for individuals taxed on worldwide income
- Open Market tax cap: for new Open Market residents purchasing a property within 12 months of relocating and paying over £50,000 in document duty
- Resident only tax cap: for individuals spending 91+ days in Guernsey and another jurisdiction during the same year
4. Favourable dividend taxation
Guernsey’s approach to dividend taxation is particularly beneficial for those relocating from the UK:
- If you are a Guernsey resident and a shareholder in a UK-registered company, you can receive dividends from pre-arrival reserves tax-free in Guernsey.
- This exemption applies if the dividend is paid within two full calendar years of becoming a Guernsey resident.
- These dividends are also typically outside the scope of UK tax for non-UK residents
5. Corporate tax: A simple three-tier system
Guernsey’s corporate tax regime is designed to encourage business growth and investment:
- 0% Standard rate: Applies to most companies, including general trading and investment
- 10% Intermediate rate: Applies to specific sectors such as:
- Banking
- Insurance
- Fiduciary services
- Fund administration
- 20% Higher rate: Applies to:
- Utilities
- Large retail businesses
- Certain property development activities
This structure makes Guernsey an attractive base for international businesses and financial services.
If you are considering relocating to the island, the team at Locate Guernsey are on hand to provide confidential guidance throughout your relocation journey free of charge. If you would like to understand how Guernsey could work for you, please get in touch:
