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28 November 2023

A haven for the ultra-wealthy

The island, 23km off the French coast, has 90,000-plus residents (GETTY IMAGES)

By Sean Davidson

As one of the world's leading offshore financial centres, the British Channel Island of Jersey is tailor-made for the affluent business mogul.

Since an annual tax contribution of £100,000 (Dh519,075) or more will allow non-locals to reside there, those with mere millions may find the island outside their league – such is its exclusivity.

The island, about 23 kilometres from the French coast, is as idyllic as a business haven can get. Pristine beaches, unspoilt coastlines, lavish housing and a buoyant financial services industry bring a perfect blend of million-dollar businesses and sand-kissed lifestyles.

Like other offshore financial centres, 60 per cent of Jersey's nearly £4 billion comes from its financial services offering. With tourism pumping in the next largest chunk of its GDP, visitor-specific enterprise has brought residents an equally enticing life outside the office.

Though tied to the United Kingdom through a 900-year-old constitutional relationship, it is not part of the UK or the European Union.

Inclined towards the French, but with most systems increasingly British, the rather quaint Jersey enjoys staying away from the limelight. Jersey boasts no public debt and full employment. For its cash-rich 90,000-plus residents, its 20 per cent taxation offers little worry. No capital gains, estate or inheritance duties make living there all the more attractive. In Jersey, corporate taxation and personal tax are among the lowest in Europe. The 20 per cent rate is currently applicable to both individuals and corporate entities, as well as partnerships and branches of overseas companies.

Carolyn Marsh of Channel Island specialist estate agent Marsh and Company said Jersey was an attractive place to live for high net-worth individuals: "The exclusive nature of the Channel Islands will always be desirable to people at the higher end of the financial spectrum.

"But, that said, obtaining property is not always the easiest thing to do on the islands. Money will only take people so far.

"But, overall, Jersey and the other islands are very beautiful and unspoilt. And most people want to keep them that way," she said.

As part of its international commitments, Jersey will move to a 'zero/10' corporation tax regime in 2009, under which companies will generally be taxed at zero per cent and a special 10 per cent rate will apply to specific regulated financial businesses. Other attractions of the Jersey tax system include generous rules for the taxation of employee share ownership, lower social security payments and no stamp duty on equity transactions.

All this stems from the government's strong commitment to maintaining the attractiveness of the Jersey tax regime as part of its overall economic strategy.

Its immigration laws ape the UK, but when it comes to long-term residency the criteria is far more stringent or net-worth driven. A plush luxury home or potential to contribute high taxes guarantees you residency, as does investing in commercial property. For everything else the government would probably offer you guides to other countries.

Foreign-owned business will also find the going a lot tougher here since the government likes to protect its limited local resources. Only extremely diverse or top-end quality business offerings usually make the cut.

Severely limiting housing policies that put a brake on business activity led the Housing Committee to issue a much-debated and deferred strategic policy report in 2002, which called for sites with more than 1,100 new homes to be zoned in the first five years of the new Island Plan.

Today, the Island Plan includes provision for only 750 new homes, but the committee insists the number will allow for 500 rental and 600 first-time buyer homes. The island is slowly knocking away a shortfall of 1,000 homes but limited availability and relatively high house prices continue to be a deterrent for the island's business community.

Jersey residents are famed for opposing any development within kilometres of their back yards, and their resilience has turned a number of banks to the Isle of Man.

The authorities throw several roadblocks at "active" foreign investment like new businesses and permanent immigration but welcome "passive" investment like real estate investments or purchases of existing business assets.

In May 2002, Jersey, along with fellow UK-dependent territories Guernsey and the Isle of Man, joined EU's information-sharing regime – the Savings Tax Directive – which called financial institutions to pass details of income on investments by nationals of EU member states to their home tax administrations. The EU introduced the directive on July 1, 2005, although Jersey along with Guernsey, the Isle of Man, Austria, Belgium, Switzerland and others, opted for a withholding tax of 15 per cent on interest income.

A financial centre

Jersey is established as a global finance centre with about 50 international banks, and a plethora of sophisticated financial services companies.

The benefit of Jersey having its own parliament, with independent responsibility for its domestic and fiscal affairs, has led to its evolution as one of the world's premier financial services jurisdictions.

The island offers political and economic stability. It has a flexible, independently endorsed regulatory framework, a tax-neutral environment, a mature and respected legal system and, backed by a 40-year track record of product and service innovation, a skilled and responsive workforce.

These ingredients continue to be the basis for its global appeal as a jurisdiction of choice for international investors.

Jersey also has approximately 200 regulated trust and company administrators.

On the market

12 bedrooms, Dh33.18m

Nestled in 20 acres of Victorian gardens and fields, Oaklands is a walled country estate at its finest. Its long, tree-lined driveway leads to the grandeur of the main house. It was built in 1860 as a statement of wealth created from the cod fishing industry off the Newfoundland coast. The main house is well- proportioned and has three principal reception rooms, as well as a formal dining room, kitchen and an abundance of utility space and cellars. The first floor has nine bedrooms and five bathrooms.

The main house is connected to an annexe wing that offers more accommodation and a coach house. Also within the grounds is Oaklands Farm – a three-bedroom granite property measuring 1,500 sq ft. Located at the rear of the estate, the farm has an independent entrance offering complete privacy from the main house.

- Contact: Fine and Country 04 4270 202

Tesson House
Five bedrooms, Dh16.31m

Situated in Jersey's St Lawrence parish, Tesson House sits on the sunny side of a wooded valley offering spectacular views. Finished using high-quality modern and natural materials, it is designed to offer efficient levels of insulation and low maintenance costs. At its ground level there is a patio, lawn, spa pool and numerous landscaped areas. Accommoda- tion is spread over three floors and includes a hall, open-plan living area, open-plan kitchen and dining area with a balcony, five bedrooms and bathrooms (four en-suite), a media room and gym, cloakroom, utility room that serves as a second kitchen, and a huge garage.

- Contact: Fine and Country 04 427 0202