Guernsey Tax Deductions

1. Corporate Tax Deductions

• Business Expenses: Companies can deduct expenses that are incurred wholly and exclusively for the purposes of the business, such as operational costs, employee salaries, and professional fees.
• Depreciation: While Guernsey does not have a traditional capital allowance system, companies can deduct depreciation as part of their accounting profit calculations.
• Interest Payments: Interest on loans used for business purposes may be deductible, provided they meet the necessary conditions.

2. Personal Tax Deductions

• Mortgage Interest Relief:> Individuals may claim tax relief on mortgage interest for their principal private residence, subject to limits.
• Pension Contributions: Contributions to Guernsey-approved pension schemes are deductible within set thresholds.
• Charitable Donations: Donations to registered Guernsey charities may be eligible for tax relief.

3. Tax Cap for High-Net-Worth Individuals

• Standard Tax Cap: Guernsey residents can elect for a tax cap, meaning they pay a maximum amount of tax regardless of total income. For 2024, this is £150,000 on Guernsey-sourced income or £300,000 on worldwide income.
• Foreign Investors Becoming Residents: Individuals relocating to Guernsey can benefit from the tax cap, limiting their overall liability.

4. Exempt Company Status

• Foreign-Owned Companies: Certain investment vehicles, such as collective investment schemes, may apply for exempt company status, meaning they pay no Guernsey tax but must pay an annual fee.

5. No Capital Gains or Inheritance Tax

• Capital Gains Tax (CGT): Guernsey does not impose CGT, allowing foreign investors to realise gains tax-free.
• Inheritance Tax (IHT): There is no IHT, making Guernsey attractive for estate planning.