About Guernsey

Geographical

Guernsey is an island of approximately 27 square miles situate off the North West Coast of France. It is part of as the Channel Islands and has a population of around 60,000. St Peter Port is he main harbour town and houses most of the financial institutions on the island.

Constitutional Position

Guernsey occupies an unusual constitutional position as it is not under the rule of the United Kingdom (UK) nor is it a sovereign state or colony.
Guernsey's independence is such that it has its own parliament known as the 'States of Deliberation' and the island has sole responsibility for its own finances and taxation. The freedom of Guernsey from taxation and fiscal control by the UK is well established. A series of royal charters effectively exempted citizens of Guernsey from UK taxes, and local goods and services are exempt from the customs duties and VAT.

Guernsey is neither a member state nor an associate member of the European Union (EU). It has a special relationship with the EU which is set out in Protocol 3 to the Treaty of Accession of the UK to the European Economic Community. The Island's constitutional position is laid down by Protocol 3 and cannot be changed unless that Protocol is changed by a unanimous decision of all member states of the EU. Under the Protocol, Guernsey is within the Common Customs Area and Common External Tariff of the EU, allowing exports to EU Countries without tariff barriers.

The currency in Guernsey is the Pound Sterling. The Islands internal fiscal administration is governed by the States of Deliberation and the Guernsey Financial Services Commission, which regulates financial business.

Taxation

Guernsey generally has no taxes chargeable upon capital or wealth. There is no capital gains tax, inheritance tax, gift tax and death does not give rise to any taxes.

Non-residents are not subject to Guernsey income tax on overseas earnings or bank deposit interest.

Similarly a company which is beneficially owned by non-residents is also not subject to income tax.

Provided all of the beneficiaries of a trust are resident outside Guernsey, foreign income and Guernsey bank interest is exempt from income tax even if the trustees are resident in Guernsey. There is no fee payable by a trust for exemption.