CHANNEL HOPPING WITH TAX FRIENDLY RELOCATION

Boasting an idyllic way of life and a favourable tax regime - the Channel Islands are proving an enticing prospect in the current climate for investors looking to shelter their fortunes. Serena Templeton reports

The home of twinkle-eyed BBC TV detective Bergerac, first-time visitors to the Channel Islands often comment on the archipelago’s vintage charms, a quaintly old-fashioned destination yet with much to offer despite its diminutive dimensions. Back in the 60s the destination thrived as a quintessential bucket and spade gateway, but the islands have since evolved to embrace a genteel café culture with no shortage of HNW residents putting down roots thanks to a tax-friendly regime.

“The Channel Islands are internationally recognised as highly reputable jurisdictions and well-respected business centres, ideally positioned for investment,” reflects property analyst Derek Stephenson. “The combination of an established, tax efficient structure, proximity to the UK, more sunshine and the same time zone and language is also prompting many high net worths to consider the benefits of relocating here both for work and for retirement.

“The islands are a great environment too to bring up children. And whilst historically, we have seen more retired people moving over, that trend is now starting to change where younger families with their own businesses are looking to relocate.”

GDP per capita (£45,913 in 2016), is amongst the ten highest in the world. In light of this, Jersey, the largest of the islands, has seen the number of relocation enquiries from high net worth individuals soar from 119 in 2016 to 151 in 2017, with 34 approved for residency in 2017, a historic record.

Last year Jersey also welcomed 20 new High Value Residents who purchased a total of £95 million worth of property.

“Historically, the largest influx of new applicants used to originate from the Home Counties and the south west of England,” explains Ross le Marquand, director of Cooper Brouard. “More recently however we’ve seen increasing interest from wider afield, often overseas financial centres in Switzerland, Hong Kong, Singapore and other European cities.”

One key draw – is property prices. The inland regions are still a relative steal compared to London. A substantial home with garden can be picked up for around £600 per square foot, compared to £900 - £1,500 per square foot in London.

“Those who are granted a High Value Residency license may only buy property worth in excess of £1.75 million,” explains Bradley Vowden, partner at Gaudin & Co. “While this sum wouldn’t even get you a two-bedroom flat in certain parts of London; in Jersey, you can expect a lot more for your money – perhaps a luxury penthouse with sea views, or a country house with garden and pool.”

Despite property value incentives - relocating is costly. To secure ‘High Value Residency’ status – individuals must prove sufficient income as well as making a major contribution to the Island’s tax revenues; in the region of £125,000. This means that the majority of property sales are on the higher side of the price spectrum.

Explains Robin Sappe, director of Le Gallais: “During 2017 there were over 110 properties sold between £1million and £2million and more than 20 between £2million and £25million.”

According to Deborah Pira, director of Beach & Country Estate Agents, there is a caveat to this tale, with a likely surge in the sale of medium size homes, as the number of expensive relocations puts pressure on luxury housing stock. “There’s a shortage of homes on the market compared to the number of willing and able buyers,” she explains. “Jersey is essentially a place where people tend to live in their homes longer, and due to the size and popularity of the Island, people invariably have to make compromises in their property purchases.”