Tax in Guernsey

Income tax is a flat 20% on net income after allowances. There is no capital gains tax, no inheritance tax, no stamp duty, and at present no VAT or goods and services tax.

The personal allowance for 2026 is £15,200, raised from £14,600. Above £85,000 of income it is withdrawn at £1 for every £5, so higher earners lose it entirely.

Unused allowances transfer between spouses and civil partners. Couples are now taxed independently, each responsible for their own return and payments.

This is the cost that never appears when somebody says "twenty per cent flat".

For 2026 the rates are 7.5% for employees, 7.1% for employers, 12.4% for the self-employed and 11.8% for the non-employed, reduced to 3.8% above pension age. The annual upper earnings limit is £196,560.

Guernsey offers statutory caps that any qualifying resident can elect for, without negotiating with anybody. For 2026, unchanged since 2024:

£160,000 on tax on non-Guernsey-source income.

£320,000 on tax on worldwide income.

£60,000 for new arrivals, claimable in the year of arrival and the following three years, provided you pay £50,000 or more in document duty and buy the property within twelve months of arriving.

Two things to understand. If you elect for a cap you receive no personal allowances. And income from Guernsey land and property sits outside the cap and is taxed separately in addition to it.

Individuals who are "resident only" rather than solely or principally resident can elect to pay a standard charge instead. This rose to £50,000 for 2026, from £40,000. It exempts worldwide income from Guernsey income tax but Guernsey-source income remains taxable.

Mortgage interest relief is being phased out: capped at £2,500 for 2026, £1,500 in 2027, £750 in 2028 and nothing from 2029.

Tax on Real Property domestic rates rose 8.3% in 2026.

And the significant one. On 8 June 2026 the Policy and Resources Committee published a Tax Reform 2026 package proposing a 3% goods and services tax from 1 January 2028, alongside an International Service Entities scheme, together estimated to raise around £55 million a year.

It has not been decided. A consumption tax has been rejected by the States repeatedly, most recently in 2024, and a number of recently elected deputies oppose it. If the absence of GST is material to your decision, follow the debate rather than the current position.

The headline is genuinely attractive and it is not the whole picture. Social security is real money. Tax on Real Property and document duty are real money. GST may well arrive. And keeping more of your income means less than you think once you have read the cost of living page.

More to the point, I have never met anyone who moved here purely for the tax and was still happy about it five years later. The people who last are the ones who wanted the life and found the tax a pleasant addition.