With high personal allowances, a flat income tax rate of 20%, no capital gains, gift or inheritance ...
With high personal allowances, a flat income tax rate of 20%, no capital gains, gift or inheritance tax, Guernsey is a low-tax jurisdiction.
Overall, the net asset value of Guernsey-domiciled funds increased by £5.5bn during the quarter ending 30 June 2001 to reach a total of £32bn. Open-ended funds under management increased by £1.6bn to a total of £16bn and closed-end funds under management increased by £3.9bn to a total of £16bn.
Increased activity in the open-ended sector was signalled with the authorisation of a further eight open-ended funds in the quarter ending 30 June 2001. By contrast, the number of closed-ended funds authorised during the same period (seven funds) showed a slower rate of growth compared with the two previous quarters; but some of those funds were extremely large and this is the main reason for the substantial growth in net assets of closed-ended funds over the quarter.
Although markets have not generally been positive over the quarter, some contributors to the statistics noted improved conditions in specific markets as factors contributing to growth in net assets; sterling weakness against the US dollar also affected reported values in sterling.
The value of open-ended non-Guernsey schemes under administration in the bailiwick increased by £532m, up 6.7% to £8.5bn.
The year 2001 has been marked with changes in legislation for Guernsey with the passage of Guernsey's All Crimes legislation. Exercising such legislation means that if a professional business suspects that one of its clients is involved in tax evasion or any other serious crime, it will be able to disclose this to the police without risking prosecution for breach of confidence.
On 1 April 2001, the Fiduciary Law 2001 came in effect. The law is deemed to provide for comprehensive regulation and supervision of trust companies and trustee company administrators. Trustees will only be issued a license by the Guernsey Financial Services Commission upon proof of being 'fit and proper'. The new law makes sure to exclude all judiciary businesses that cannot meet specified professional standards.
As a result of the new trust laws, there has been consolidation of trust companies in the industry. Smaller companies are merging with larger companies so as to comply with the new licensing laws. The consolidation in the industry has been largely due to the thought that larger companies are able to offer improved service and products.
Guernsey hopes the trust laws will give investors greater confidence in the jurisdiction. The laws give investors greater protection against trust companies and hopefully more confidence in the products they buy.
One of the legislative changes in the pipeline is the reform of the company law. A new law has been drafted which both consolidates existing law and ordinances and introduces new aspects. It will be available for consultation in 2001 or early 2002. The proposed additions include provisions for no par value shares, limited duration companies, an increase in the maximum disqualification period for persons acting as directors to 15 years, the ability for any person with a full fiduciary licence to be able to apply directly for the incorporation of a Guernsey company and detailed administration and receivership procedures.
Under the collective investment scheme rules, there are three types of authorised open-ended funds in operation:
• Class A: Ucits-equivalent schemes that closely follow the rules which apply to UK-authorised collective investment schemes.
• Class B: Funds ranging from the retail product aimed at the public via institutional schemes to the strictly private fund.
• Class Q: Funds targeted at qualifying professional investors which can include a government or municipal authority, a trustee of a trust with net assets in excess of £2m, a body corporate or limited partnership if it has net assets of £2m, or an individual who has, together with a spouse, a minimum net worth of £500,000.
Location: Guernsey is one of the two Bailiwicks, the other being Jersey, situated in the English Channel between Great Britain and France. The Channel Islands include Guernsey, Jersey, Alderney and Sark
Regulatory contact: Guernsey Financial Services Commission, La Plaiderie Chambers, La Plaiderie, St Peter Port, Guernsey, Channel Islands, GY1 1WG
Telephone: +44 (0)1481 712 706/712 010
Facsimile: +44 (0)1481 712 010
E-mail: [email protected]
The increase in minimum AE contributions has had little impact on opt-out rates - with cessations after April increasing by less than two percentage points, data from The Pensions Regulator (TPR) shows.
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