Income Tax (Minimum Retirement Capital) (Jersey) Order 2017

Official Consolidated Version

This is an official version of consolidated legislation compiled and issued under the authority of the Legislation (Jersey) Law 2021.

Showing the law from 11 January 2024 to Current

Income Tax (Minimum Retirement Capital) (Jersey) Order 2017

Article

1             Interpretation. 3

2             Relevant capital threshold. 3

3             Relevant capital 4

4             Relevant capital factor. 6

5             Citation. 6

Table of Legislation History. 7

Table of Endnote References. 7

Income Tax (Minimum Retirement Capital) (Jersey) Order 2017

1        Interpretation

In this Order “Law” means the Income Tax (Jersey) Law 1961.

2        Relevant capital threshold

In accordance with Article 131FA of the Law, an individual is entitled to minimum retirement capital if, on the day for which the entitlement is to be determined, the individual is entitled to relevant capital in excess of such threshold determined using the following formula –

MRI x MRC Factor x Coefficient

Where –

MRI is the annual amount of minimum retirement income (within the meaning given by Article 130(1) of the Law);

Coefficient is 2.25;

MRC Factor is determined in accordance with the following table –

3        Relevant capital

(1)     For the purposes of Article 131FA of the Law, the amount and nature of relevant capital in respect of an individual shall be calculated as follows and in accordance with this Article –

Relevant capital = the open market value of assets directly owned by the individual that are not excluded assets less the value of the individual’s liabilities (using the values on the day for which the entitlement is to be determined).

(2)     In paragraph (1) “excluded assets” means –

(a)     any tangible movable property;

(b)     an individual’s only or main residence;

(c)     the capital value of any life assurance policies taken out on an individual’s life.

(3)     In paragraph (1), assets directly owned by the individual do not include assets held on trust for the benefit of the individual (other than a bare trust) except where the asset held on trust is the individual’s pension savings.

(4)     For the purposes of paragraph (3) “pension savings” means savings –

(a)     under an approved Jersey scheme (within the meaning given by Article 130(1) of the Law); or

(b)     under an overseas scheme (within the meaning given by Article 131OA of the Law).

(5)     Where an asset is jointly owned by an individual and another person, only the proportion of the asset owned by the individual shall be included when calculating relevant capital in respect of the individual under paragraph (1).

(6)     For the purposes of paragraph (1), liabilities include a loan, borrowing or similar obligation or, a part thereof, entered into by an individual, including, where the individual is a guarantor or equivalent for a loan, borrowing or similar obligation entered into by another person but does not include a loan, borrowing or similar obligation that is taken out for the purpose of –

(a)     acquiring a dwelling-house that is the individual’s only or main residence;

(b)     extending a dwelling-house described in sub-paragraph (a); or

(c)     paying off another loan, borrowing or similar obligation which would have been deductible under paragraph (1) if it had not been paid off.

(7)     For the purposes of paragraph (1) –

(a)     the open market value of an asset must be determined in sterling and where an asset is valued in foreign currency, the conversion into sterling shall be carried out in accordance with exchange rates published by His Majesty’s Revenue and Customs for VAT purposes;

(b)     where an asset is traded on a recognized stock exchange, the open market value of the asset is determined by reference to the closing bidding price on the trading day immediately before the day for which the entitlement is to be determined;

(c)     where an asset is not traded on a recognized stock exchange, the individual must obtain an independent professional valuation of the asset which must be made not more than 3 months prior to the day for which the entitlement is to be determined;

(d)     where the asset to be valued is pension savings, the fund value must be calculated in accordance with Article 130B of the Law and the open market value shall be the fund value less 20%.[1]

4        Relevant capital factor

For the purposes of Article 131FB of the Law, the relevant capital factor shall be such amount determined using the following formula –

Relevant capital ÷ MRC Factor ÷ Coefficient

Where –

Relevant capital is determined in accordance with Article 3;

MRC Factor is determined in accordance with the table in Article 2;

Coefficient is 2.25.

5        Citation

This Order may be cited as the Income Tax (Minimum Retirement Capital) (Jersey) Order 2017.

Endnotes

Table of Legislation History

Table of Endnote References