One of several Channel Islands, Guernsey is located just off the coast of Normandy in France. The island is a popular spot among wealthy individuals and organisations due to its extremely generous tax environment.
For example, there are no taxes on inheritance, capital gains or wealth in Guernsey. Businesses also do not have to pay VAT or sales tax.
In further good news for companies, the majority of Guernsey-based enterprises are not charged corporation tax. However, this is not universal; banking firms must pay 10 per cent and property rental and utility companies must set aside 20 per cent.
With minimal tax restrictions elsewhere, most of Guernsey's tax revenue comes through income streams.
However, even income tax is fairly low at a flat rate of 20 per cent. Deductions are also available for pensions and interest charges on a main residence.
There is also a tax cap in place for Guernsey residents, which offers individuals two choices on how they pay:
Anyone who resides in Guernsey, but not principally, has a choice between paying income tax on worldwide income or an annual £27,500 standard charge. This can be offset by tax paid on Guernsey income.
Living in Guernsey
Guernsey is a quiet, picturesque location that is just a stone's throw from France and England for those who miss city life.
However, the island's generous tax system comes at a price – the cost of living in Guernsey is noticeably higher than in most parts of the UK.
Despite this, education and health care are both excellent, while crime – as can be expected on a small island – is low.