Jersey Industry Leaders Defend High-Value Residency Scheme Amid Tax Criticism

More than 260 professionals from the sectors of business, finance, and law convened at a Chamber of Commerce event on Thursday to advocate for the economic importance of Jersey’s high-value residency programme. The scheme grants residential status to highly skilled individuals with significant net worth, with approximately 260 families currently benefiting from it.

Mary O’Keeffe, who operates a relocation firm assisting wealthy newcomers in settling on the island, described the participants in the room—comprising private bankers, tax accountants, and lawyers—as evidence of the sector’s scale. She argued that these residents make substantial contributions to both the economy and philanthropic causes.

Under the current regulations, high-value residents pay a flat tax rate of 20% on the first £1.25 million of their worldwide income. Any income exceeding that threshold is taxed at just 1%. While some critics argue this rate is too low, O’Keeffe defended the structure by highlighting the mandatory minimum payment.

“The basic pay that they pay is £250,000,” O’Keeffe stated. “And the 1% often equates to many millions and that’s what people don’t understand.” She emphasized that high-net-worth individuals are highly mobile and seek jurisdictions that offer safety and security for their wealth, noting that competitive taxation is essential to retain them.

Garry Bell, a tax advisor specializing in this demographic, warned that raising the tax rate on income above £1.25 million to 20% could severely impact recruitment numbers. He predicted that instead of gaining 18 or 19 new residents annually, the island might see only one or two.

Bell cautioned that losing these residents would result in a broader economic loss, including reduced income tax revenue, stamp duty, employment opportunities, and goods and services tax (GST). He pointed out that Jersey competes directly with zero-tax jurisdictions such as Dubai and Monaco, while already being one of the more expensive places to live.

However, the programme faces sharp criticism from former government economic advisor John Christensen. Christensen, who served in the 1980s and 1990s, dismissed the tax contributions as “piffling” and described the scheme as divisive within an already unequal community.

Christensen argued that the programme does not benefit younger Jersey residents and instead drives up housing costs and the general price of goods. He alleged that the primary economic contribution outside of minimal taxes is limited to construction work, resulting in “ugly and inappropriately sized houses.”