Guernsey operates a flat 20% income tax rate for all individuals resident in Guernsey or deriving Guernsey-source income.
The 2019 Guernsey Budget introduced a number of changes in the field of personal taxation.
The personal allowance has been increased from 10,500 British pounds sterling (GBP) to GBP 11,000, and earners of more than GBP 100,000 will have their allowance reduced by GBP 1 for every GBP 5 exceeding this limit. This withdrawal of allowances has been extended beyond the personal allowance (see the Deductions section).
Following the introduction of ‘tie-breaker’ clauses to certain Double Taxation Agreements (including those with Jersey and the United Kingdom [UK]), the ‘flow through’ provisions in respect of distributions have been amended with retrospective effect from1 November 2015. This will ensure that relief for underlying tax incurred by a company will flow through to the beneficial member on distribution if the company is either incorporated or controlled in Guernsey.
There has been an increase of the tax cap to GBP 130,000 for non-Guernsey source income and GBP 260,000 for worldwide income.
Benefits in kind charges are being increased by a fixed 3%, compounded annually, until 2019 on cars, accommodation, and food.