With the dawn of the 50 percent tax rate now here, more and more Brits are said to be investigating the prospect of residing offshore, with the aim of preserving wealth. Jersey, just an hour away from Heathrow and home to a discreet and secure offshore banking regime, is increasingly becoming to THE destination for British expatriates.
Becoming an expatriate in Jersey is not without its red tape. The island, found near the coast of Normandy, is viewed as the most exclusive private members club you’ll ever try to join. Your experience as a new member of this ‘club’ will depend on your bank balance, travel to Jersey with less than a £500,000 income and you will have to prove your worth by living on the island for at least 11 years before you are allowed to buy a home. Of course if you are in possession of such sums then you’ll be welcomed into the VIP room as soon as you touch down on Jersey shores.
Keeping in line with the exclusive angle there are only around 10 of these power-wallet individuals who join the ranks of Jersey’s elite every year. The legal definition for these people is the 1 (1) K entrant. The other category of entrance to Jersey is the “J Category” of which skilled workers fall into. These workers will have skills that cannot be found amongst the indigenous population. The bulk of these “skilled workers” are allowed into the country to work mainly in the financial sector. In some cases people are allowed in to Jersey with the intention of creating more employment.
Jersey is hoping to reap the benefits of Alistair Darling’s 50p tax rate, which came into effect in April of this year, by luring disgruntled city workers who are jaded by the tax increase. However, while there has been an increase in inquiries, not that many people have actually gone ahead and uprooted.
A prime player in Jersey’s finance sector, Geoff Cook, told The Telegraph: “We have had an uptake in inquiries but we have not yet had a sudden surge of relocations on the back of the 50p tax rate. People are not just chatting, they are investigating properly all that is involved in leaving the UK.”
Mr Cook, who runs Jersey Finance, added: “Jersey is, in effect, an offshoot of the City and we’ve no interest in trying to persuade people to leave London. But if they are considering moving to overseas jurisdictions, we would prefer them to come here. Because there is so much interest, we have put on a couple of private dinners in London to tell people what Jersey has to offer.”
Some of the people who are already expatriated to Jersey have spoken about their thoughts regarding the potential influx, and their own experiences. Peter Edwards, the head of a local estate agent, said: We have seen about a 15 percent increase in interest” he said. “But while many people were researching moving, they are then deciding not to take the plunge. There have been a few transactions on the back of the tax hike, but not quite to the extent that everybody’s talking about. Prices are comparable to those of higher-value properties in the Home Counties.”
Gabriele Schiessl is the joint-founder of Ashore, an agency that assists wealthy individuals with making the transition to Jersey. They also give handy advice regarding day-to-day necessities such as finding the right school, how to spend your leisure time and even the best supermarkets. She said: “We have had a lot of inquiries recently from people from the UK saying that they can’t afford a really expensive education for their children if they have to pay the 50p rate. They don’t want to send them to state school.” With regards to the pros of Jersey she added: “When people come here they tend to come for the long-term. For families, it would be hard to think of a better place: safe, beautiful countryside, the beach within easy reach at weekends. My husband goes running along the beach in his lunch break. You can’t do that in London.”
However, not everyone thinks Jersey is a dream location destined to steal London’s heavy-hitters. Richard Murphy, a finance blogger, mused: “Are there many people who are really going? Some hedgies will go, but hedgies are pretty sad people – they have a pretty distorted view of what is important in life – it’s only cash. But neither private equity nor hedgies are paying tax in the UK anyway, so their loss is immaterial.” He also questioned the business impact: “Are we going to see major banks leaving the UK? Not on your nelly, because you can’t run a major bank anywhere except in a location in which there are other major banks. It’s called cluster theory. And nowhere has more major banks than London.”
If you want to learn more about offshore options vist our offshore banking section or consult an IFA.