En Voyage_Issue#14_Flickbook

Business
A PERFECT
STORM IN A
BREXIT TEACUP?
BY JASON MORGAN, PARTNER AND HEAD OF
PROPERTY AT CAREY OLSEN IN GUERNSEY
Whilst the trigger for the
improvement in the Local Market
in Guernsey has undoubtedly
been the consequence of
domestic conditions and the
downward correction of the
market having naturally run
its course, the recent increase
in Open Market interest and
transactions is unquestionably
due to external factors and,
most notably, the direct and
indirect effects of Brexit.
Such a contention, given how
difficult even the most wellinformed
appear to find predicting
the likely effects of Brexit on
Guernsey, warrants further
explanation. In particular, why
should the high-level negotiations
between the UK and EU around
future trade agreements and their
wider relationship, have a direct
influence on people making the
decision to up sticks in the UK
(although there is interest and
movement from elsewhere too)
and relocate to Guernsey?
The answer to that question
and the reason for the noticeable
increase in interest being
shown by people in moving to
Guernsey would appear to have
more to do with the ongoing
uncertainty surrounding Brexit
and the potential for a snap
general election in the UK that
could result in a win for the
Labour Party. Such a prospect,
given Labour's vastly different
approach to economic policy
and objectives, that includes
the introduction of swingeing
property and wealth taxes on the
better off, appears to be leading
many people to consider voting
with their feet (rather than risk
doing so at the ballot box) and
to make a move to the island.
Allied to and running in tandem
with the concerns regarding
Brexit, is the threat of a significant
decline in the growth of the UK
economy (predicted to be as
high as 15% in some quarters,
regardless of what Brexit deal
is concluded). If that should
be the case, then a move to
Guernsey is an increasingly
attractive proposition.
To add to Guernsey's appeal
new tax rules were introduced
at the start of 2018, designed to
encourage relocation to the island
by high net worth individuals
(HNWIs) and their families. The
changes have seen an income
tax break for new residents who
spend at least £1.5 million on an
Open Market property (giving
rise to a Document Duty take of
£50,000 or more). A new lower tax
cap of £50,000 will be available
to such HNWIs for the year of
charge in which the individual
takes up permanent residence
and will then apply for the
following three years. The States
proposed the initiative as part of
its 'Future Guernsey' manifesto
with a core objective to make the
island 'one of the healthiest and
happiest places in the world'.
On top of this, the island's
pragmatic, proactive and
efficient approach to assisting
new businesses and individuals,
coupled with the unique culture
and lifestyle people find once
they arrive here, make Guernsey
a very strong contender for those
looking to relocate from the UK.
It is to be hoped that the
noticeable increase in interest
and improvement in the good
fortunes of the Open Market that
has been seen in 2018 - with 49
Open Market sales in the first nine
months of the year compared
to 27 at the same point in 2017
- will continue into 2019 and
THE STATES PROPOSED
THE INITIATIVE AS
PART OF ITS 'FUTURE
GUERNSEY' MANIFESTO
WITH A CORE OBJECTIVE
TO MAKE THE ISLAND
'ONE OF THE HEALTHIEST
AND HAPPIEST PLACES
IN THE WORLD'
well beyond that. Certainly, if the
analysis of the likely cause and
effect of the renewed interest
in the Open Market provided by
this article is correct, it could
be said that Guernsey will not
only benefit from the storm
created by Brexit, but it will also
provide a safe haven from it.
If you are considering relocating
to Guernsey, you are advised
to talk to a member of our
team at the start of the process
in relation to your personal,
business and tax affairs.
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