Global Daily Tax News, Guernsey Implementing Budget 2024 Tax Changes, (Dec 28, 2023)
Guernsey is set to implement a number of tax regime changes, as announced in the territory's 2024 Budget.
From January 1, 2024, first registration duty charges for vehicles will be increased in line with inflation. In addition, two new bands will be introduced for the most polluting vehicles with the highest emissions.
The income threshold at which tax allowances and withdrawable deductions will be withdrawn will be lowered to GBP80,000 with effect from January 1, 2024, alongside an increase to the level of pension contributions protected from withdrawal to GBP2,500. Personal and other supplementary tax allowances have been increased in line with inflation.
The withdrawal of tax relief on mortgage interest for a principal private residence has been paused. Therefore, the maximum relief available will remain at GBP3,500 in 2024, for an individual. However, only 50 percent of interest paid will be eligible for relief from 2024 for buy to let properties.
The Budget also provided for an increase to the Alderney Tax Cap to GBP65,000; the Tax Cap on qualifying income to GBP160,000; and the Worldwide Tax Cap to GBP320,000. In addition, the open market tax cap is being raised to GBP60,000, together with extending eligibility to those buying open market properties through a 100 percent shareholding in a company where the individual pays at least GBP50,000 in Document Duty Anti-Avoidance Duty.
Social security contribution rates will be raised as follows:
Class 1 Employer - 6.9 percent;
Class 1 Employee – 7.2 percent;
Class 2 Self-Employed – 11.9 percent;
Class 3 Non-Employed (under pension age) - 11.3 percent; and
Class 3 Non-Employed (over pension age) - 3.7 percent.
The Budget also featured a hike to the exempt companies fee to GBP1,600, and an announcement that, for returns for 2024 onwards, the individual tax return deadline will be November 30 going forward. The deadline is January 31, 2025, in respect of the 2023 year of assessment.