You may recall that the Guernsey Tax authority and HMRC in the UK have come to an agreement amending the 1952 Arrangement. One of the effects of the amendment is that pensions and similar remunerations paid to someone who is resident of one of those territories are taxable only in the territory where the recipient resides. In other words, if someone lives in Guernsey and is in receipt of a UK pension, he or she may be able to arrange matters so that the pension is paid out gross (i.e. with no UK tax being deducted at source). The pension will then, however, be taxable in Guernsey in the usual way.
The information originally supplied to me suggested that this tax treatment was not available in respect of government service pensions. However, I have since been in contact with HMRC who have confirmed that, if a person is not resident or ordinarily resident in the
As the UK tax system works on Self Assessment it is incumbent on all people eligible under this agreement to apply using Form “DT/Individual” along with all other relevant information which are available by following the links below. If the form is not completed, UK tax will be deducted at source in the usual way. The form, once completed, has to be submitted to the Guernsey Income Tax Office, in accordance with note 4 to the form, so that they can certify that the person who has filled it in is resident in Guernsey for tax purposes.
Please note that this information is issued by way of general guidance only, and the Guernsey Chamber of Commerce does not accept liability for its contents. The Guernsey Chamber of Commerce is not qualified to give tax advice and any recipient of this note should obtain advice specific to his or her circumstances.
