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Jersey is a 45-square-mile island located in the English Channel, off the coast of France. It is a British Crown Dependency, which means that although it is not part of the United Kingdom, it is a possession of the British Crown. Jersey maintains full political and financial autonomy, allowing it to operate independently of the UK.
Known for its low taxes, Jersey has long been considered a tax haven, particularly for wealthy individuals and corporations looking to reduce their tax liabilities.
Key Takeaways
- Jersey has been considered a tax haven since the 1920s.
- The island has a maximum 20% personal income tax rate, with no wealth, inheritance, or capital gains taxes.
- Jersey’s corporate tax rate is zero for most businesses, except for financial services (10%) and certain utilities, rentals, and development projects (20%).
- Jersey’s tax structure has made it an attractive destination for international financial services and high-net-worth individuals.
Jersey Tax History
Jersey first gained a reputation as a tax haven in the 1920s, when wealthy British citizens began moving to the island, or, in many cases, simply transferring their wealth there, in order to benefit from the absence of wealth and inheritance taxes.
In 1928, Jersey introduced a 2.5% income tax, which was later raised to 20% during the German Occupation of the Channel Islands in World War II. Since then, the island has maintained a 20% income tax rate, and it still does not impose inheritance, wealth, or capital gains taxes.
As deposits from wealthy individuals filled the nation’s coffers, the revelation that almost any tax could be avoided in Jersey brought the banking business to roost on the island. That gave birth to one of the most popular offshore destinations for U.S. dollars, rubles, yen, and other global currencies.
Jersey became a location for international smuggling in the 17th century. In the early 18th century, the merchant Jean Martel, whose Cognac brandy is prized to this day, smuggled Jersey knitted stockings to France as his brandy was smuggled to England.
Financial Regulation
No registration of offshore trust accounts is required by the companies that administer individual financial accounts on the island.
While the Jersey Financial Services Commission (JFSC) insists that trusts face strict regulation of fund sources, ownership, beneficiaries, and anti-money laundering provisions, large degrees of privacy surround the accounts.
JFSC officials who entered into cooperative agreements fostering disclosure with the United States and the United Kingdom contend that the confidentiality associated with the trusts equates with standards afforded to any other financial accounts.
To combat tax fraud or money laundering, banks require significant documentation regarding the source and nature of deposits, such as sales contracts from real estate or business transactions and proof of income from employers.
Individual Income Taxes
A maximum income tax rate of 20% applies to people who establish residency in Jersey. Those prospective residents who are high-net-worth individuals must meet and sustain a minimum income of £1,250,000, or about $1,617,875 as of March 2025. Income that exceeds the minimum is subject to an additional 1% tax.
Corporate Tax Structure
In 2008, Jersey introduced a landmark tax policy by eliminating corporate taxes for most companies operating on the island. The only exceptions to this are financial services firms, which are taxed at 10%, and businesses in the utilities, rental, and development sectors, which face a 20% tax rate.
As of 2025, there were 20 banks, with deposits of over $160 billion, licensed to operate in Jersey. Among the banks that conduct business in Jersey are Citibank, the U.S. consumer division of Citigroup Inc., and UBS AG.
Other Taxes
While no taxes are levied against capital gains or capital transfers, a 5% tax on goods and services was implemented in June 2011.
Additionally, a stamp duty of up to 0.75% applies to the transfer of immovable property within the nation’s borders, and its individual parishes collect property taxes.
What Makes Jersey’s Taxes Attractive?
What makes Jersey’s taxes attractive is the fact that they’re low for individuals (20% maximum tax rate) and nonexistent for many corporations or relatively low for the exceptions, such as financial services firms (10%).
Which Taxes Does Jersey Not Levy?
Jersey does not charge taxes on wealth, inheritance, or capital gains. This makes it an attractive place for individuals and corporations seeking to minimize their tax liabilities.
When Did Jersey’s Income Tax Rate Go to 20%?
During the Second World War and the German Occupation of Jersey, the rate was raised from 2.5% to 20%, where it has stayed to this day.
The Bottom Line
The largest Channel Island, Jersey is home to a tax structure that for years has attracted new financial accounts, residents, and corporations.
Known as a tax haven, its 20% income tax rate has been in place since the 1940s. And, with some exceptions (e.g., banks and other financial services companies), it eliminated corporate taxes in 2008.
