Jersey HVR dividends from 20%-taxed profits taxed at 20%

Dividend income declared out of the profits or gains of a company or other body of persons that has suffered Jersey tax at 20% is taxable on the high value resident at 20%GOV. The rule expressly includes dividend income from a company that earns income from Jersey land and property. Such income usually comes with a tax credit, so the resident should have no additional tax to pay on it.

The test is now whether the profits or gains behind the dividend bore Jersey tax at 20%GOV, not whether the payer is a land and property company. The earlier 20% description covered dividend income from a company earning income from Jersey land and property together with land and property held in the resident's own name. Jersey land and property income itself remains taxable at 20%.

The dividend charge sits inside the high value resident computation. Other income up to the first £1.25 million is taxable at 20% and amounts above that at 1%. Where combined Jersey land and property income and other income is below £1.25 million, the resident is deemed to receive sufficient additional income to secure a minimum tax liability of £250,000. For the calculation of Schedule D income towards the excess over the limit, dividends declared out of profits or gains charged to tax at the standard rate on a body of persons are disregarded.

Where a dividend is declared out of profits charged on the body at the standard rate, the body is entitled to deduct tax at that rate on payment, and the person chargeable on the dividend is entitled to a credit equal to the deduction that reduces the tax payable. That mechanism carries the credit described alongside the 20% dividend charge.

The £250,000 minimum applies to applicants for high value resident status from 14 July 2023, on the applicant's own taxable income. Individuals who secured status before 14 July 2023 remain subject to the rules in force when their application was approved and they moved to the Island, unless they have elected for a more recent regime to apply. New arrivals from 2022 onwards fall under independent taxation, as do couples who separate from 2022, with mandatory independent taxation for all married couples and civil partners, including high value residents, from year of assessment 2026.

High value residents with housing consent granted before January 2018 may apply to the Comptroller in writing for the tax treatment introduced in January 2018 to apply, showing why the transfer would benefit the Island in accordance with the Income Tax legislation. The applicant must meet minimum annual tax contribution, economic benefit and financial history criteria; for this route the committed minimum was £145,000, increased to £170,000 from 2023, and the applicant's existing total contribution must not fall as a result of the move. The application must be made by 31 October in the tax year from which the 2018 rules are to apply, the Comptroller responds within 30 days of a full application and may attach conditions, and breach of a condition reverts the individual's treatment to its original status for that tax year onwards.

The legal basis is Article 135A and Article 88 of the Income Tax (Jersey) Law 1961, the Income Tax (High Value Residents – Amendment) (Jersey) Law 2023 and the Income Tax (Prescribed Limit and Rate) (Jersey) Regulations 2013.