Jersey-bound? Why your financial strategy can help you make a successful move

By Philip Legrand, Private Banker at Nedbank Private Wealth, and Hannah Roynon-Jones, Director at Alex Picot Trust.

Relocating to a new country, such as Jersey, is a significant life event. The Channel Island of Jersey, well known for its stunning coastal landscapes and business-friendly environment, offers a unique blend of personal and professional opportunities. This move, however, needs careful planning to ensure that the transition is as trouble free as possible, both for your family and your finances.

In this article we combine our expert knowledge of wealth planning with Alex Picot Trust’s expertise in tax advice to highlight the value of financial planning when relocating to Jersey.

Why Jersey? A perfect blend of career prospects and quality of life

Jersey has become an increasingly attractive destination for people seeking both a thriving career and a high quality of life. Its proximity to London secures access to international business opportunities, yet the island offers a far more relaxed pace of life, with scenic beauty that mirrors the Cornish coastline. For wealthy individuals, Jersey is particularly appealing because of its favourable tax environment, which balances personal wellbeing with financial advantages.

Key steps to take before you relocate

Before embarking on your move to Jersey, there are several considerations to bear in mind. At the heart of this process is obtaining professional advice and planning. Understanding the implications of your move from both a UK or international tax perspective and a Jersey tax perspective is crucial.

1. Tax considerations: A comprehensive review of your tax status in both your home country and Jersey is vital. If you are planning to cease tax residency in your current country, it is important to understand any exit costs and the process of establishing tax residency in Jersey.

2. High Value Residency Programme: Jersey offers an attractive High Value Residency (HVR) programme, which provides substantial tax benefits for individuals meeting specific criteria. These include high earnings and a commitment to making a social or economic contribution to the island. If you qualify for this programme, it’s essential to engage with local government agencies, such as Locate Jersey, and consider working with experienced advisers in order to navigate this programme smoothly.

3. Wealth planning: Before relocating, it is helpful to meet with your wealth planner. A detailed wealth plan will ensure your investments are structured in a tax-efficient manner, taking into account the local and international implications of your move. With the right wealth advice, you can optimise your financial arrangements to suit your new residency, ensuring your wealth strategy aligns with your changing long-term objectives.

The role of wealth structuring in a Jersey relocation

Once you become a Jersey tax resident, it’s important to consider your estate planning and structuring options. Trusts and companies can offer valuable solutions for wealth protection and legacy planning.

Jersey trusts and companies

A Jersey Trust may be used for many purposes and serves as an effective structure for succession planning in a tax efficient way. It provides significant tax advantages, specifically from a UK inheritance tax (IHT) perspective for you and future generations. A trust simplifies the wealth transfer across generations and supports long-term preservation of family assets.

As well as the benefits detailed above, a Jersey company can provide flexibility and control. By acting as directors, you can retain control while still benefiting for the structural advantages.

Both Jersey trusts and companies ensure privacy, as Jersey does not maintain public registers of trusts or ultimate beneficial owners.

Example

A Jersey resident holds an investment portfolio directly in their own name. Any UK situs assets held within that portfolio exposes that Jersey resident individual’s estate to UK inheritance tax. In addition, the individual is subject to Jersey income tax on the portfolio income as it arises.

Is there a possible solution to both problems?

Yes, the solution is to place the portfolio into a Jersey company. This provides instant UK IHT protection and income is taxed at 0% at the company level – only income taken out of the company is taxed.

A further consideration is to place the company into a Jersey trust. If the individual has UK resident children and grandchildren, the trust will protect against UK IHT arising on the passing of assets at each generation. A trust can become active on death – a Will trust – so the running costs of a trust can be delayed until the trust is required but the individual has the peace of mind that the structuring is in place.

Relocating to Jersey represents more than just a change of address – it’s a significant life decision that requires comprehensive financial planning and expert guidance. By carefully considering the tax implications, exploring residency options, and leveraging wealth planning, individuals can enjoy a seamless relocation while ensuring they are optimising their financial options.

For more information, please get in touch.

Alex Picot Trust is a registered business name of Alex Picot Trust Company Ltd and is regulated by the Jersey Financial Services Commission to conduct trust and company business.

Nedbank Private Wealth does not give tax or legal advice, and clients should consult their independent advisers for specific advice, before making any investment or financial decision.