How does Guernsey tax compare to the UK?

## Guernsey vs UK Tax Comparison 2026

The tax comparison between Guernsey and the UK is striking across almost every category.

## Side-by-Side Comparison

| Tax Type | Guernsey | United Kingdom | |----------|----------|----------------| | Corporate income tax | 0% (standard) / 10% (financial services) | 25% (main rate) / 19% (small profits) | | Personal income tax | 20% flat (all income levels) | 20% / 40% / 45% (three bands) | | Personal allowance | £15,000 | £12,570 | | VAT / GST | None | 20% standard / 5% / 0% | | Capital gains tax | None | Up to 24% (residential property 24%, other assets 24% higher rate) | | Inheritance tax | None | 40% above nil-rate band (£325,000) | | Stamp duty on shares | None | 0.5% | | Stamp duty on property | Document Duty 0-2.5% | SDLT 0-12% (plus surcharges) | | Dividend tax (personal) | 20% (as ordinary income) | 8.75% / 33.75% / 39.35% | | National Insurance / SI | SI: 7% employee, 6.5% employer | NI: 8% employee, 13.8% employer | | Pension contribution relief | Yes (up to 25% earnings) | Yes (annual allowance £60,000) | | Tax cap / standard charge | £50,000 flat option | None |

## Corporate Tax: 0% vs 25%

This is the headline difference. A UK company making £1m profit pays £250,000 corporation tax. A Guernsey company making £1m profit pays zero.

However, this only works cleanly if: - The Guernsey company is genuinely managed and controlled in Guernsey (not UK-resident by management and control) - The UK owner does not trigger UK CFC (Controlled Foreign Company) rules that tax the Guernsey profits in the UK anyway - The Guernsey company meets economic substance requirements if it earns relevant activity income

## Personal Tax: 20% Flat vs Up to 45%

For high earners, the personal tax saving from Guernsey residency is very significant:

| Income | Guernsey (20%) | UK (effectively up to 45%) | Saving | |--------|---------------|---------------------------|--------| | £100,000 | £17,000 | £27,432* | £10,432 | | £250,000 | £47,000 | £92,432* | £45,432 | | £500,000 | £97,000 | £210,932* | £113,932 |

*UK figures are illustrative using 2025/26 rates including the tapered allowance.

## Capital Gains: 0% vs Up to 24%

Guernsey has no capital gains tax. Selling a business, shares, or investment property in Guernsey creates no Guernsey tax on the gain.

In the UK, the CGT rate on business assets sold after the Investors' Relief or Business Asset Disposal Relief limits is up to 24%. On residential property, the rate is 24% for higher-rate taxpayers.

This makes Guernsey particularly attractive for entrepreneurs who anticipate a significant exit or property disposal.

## Inheritance Tax: 0% vs 40%

Guernsey has no inheritance tax. Assets can pass between generations without a 40% charge. Estates of any size are not taxed at death in Guernsey.

The UK's 40% IHT (above the £325,000 nil-rate band, or £500,000 including the residence nil-rate band) is one of the highest wealth transfer taxes in the world.

## VAT: None vs 20%

The absence of VAT in Guernsey simplifies business significantly. A Guernsey business quotes and invoices at net prices with no consumption tax. UK businesses face 20% VAT on most goods and services, with quarterly returns and complex input/output tax accounting.

## When the UK Tax Position Still Applies

Moving to Guernsey does not automatically eliminate all UK taxes: