Update on Land Tax on Share Transfer

The Corporate Services Scrutiny Panel (the "Panel") has raised various issues with the draft Taxation (Land Transactions) Jersey Law 200- which were presented to the States on 10 March 2008. These issues are as follows:

1. Does the tax cover all the transactions that it should, and if not can it be extended without causing major problems?
   
2. In particular, would there be a practical way to tax commercial property transactions and property investors without damaging Jersey’s international standing?
   
3. Does the tax catch unintended situations, or charge more tax than it should? (For example, the draft Law does not have provisions to deal with properties jointly occupied by more than two people.)
   
4. How much tax is this likley to raise, against the probable administrative costs for the States?
   
5. Will the tax cause any administrative problems for taxpayers? In particular, will the fact that share transfers cannot be registered until the LTT is paid make the process of buying shares slower or more risky?
   
6. Are the enforcement mechanisms appropriate for this type of tax?

It therefore appears likely that the implementation of LTT will be delayed whlst the above issues are considered in further detail. It is of particular interest to note that the Panel is now looking to tax commercial property transactions which were not caught by the original draft law.

Please click here to read our original article on LTT.