Jersey has very specific residential laws, which regulate those wishing to live and work in an island just 45 square miles.
As a trust professional advising individuals how best to protect their wealth for future generations, quite often the subject of Residential Status arises.
This is mainly due to there being a myriad of personal circumstances all of which must be taken into consideration before one of the four residential statuses is granted.
Here I take a look at an example to illustrate the scenario faced by one of our clients.
CASE STUDY - ENTITLED or 'PERMANENTLY ENTITLED'?
A professional businessman finds himself in a position where he could lose his right to live in his own Jersey property should he leave the Island for too long, despite the fact he has earned ENTITLED status.
This is a precarious situation for any individual, who perhaps plans for a second home outside of the Island or who wishes to travel after taking early retirement, but before achieving the 'PERMANENTLY ENTITLED' status, awarded after 30 years continuous residence.
Born in the UK he arrived in Jersey in 1985. He worked for four years before leaving to travel and build his career working in other countries. He returned to Jersey in 1992 and has lived here continuously ever since i.e. 28 years.
Successful in his career, he now holds the residential status 'ENTITLED' and resides in his own home with his wife, while his grown-up children (all Jersey-born) live and work away.
At this juncture in his life he has the option to take an early retirement to travel the world. However, should he leave the Island for more than six weeks in any calendar year, over the next two years he may lose the ability to apply for PERMANENTLY ENTITLED status.
What does that mean?
Control of Housing and Work (Residential and Employment Status) (Jersey) Regulations 2013 state that: "In order to be 'PERMANENTLY ENTITLED' in Jersey, you need to have been resident in Jersey for a continuous period of 30 years with no breaks. Being permanently entitled means you have residential qualifications for life, you can leave the Island and return a few years later without having lost your qualifications."
This means that our client is required to remain resident for a further two years before he gains the coveted PERMANENTLY ENTITLED status under which he will be able to leave the Island, and return to his own home, as he wishes.
He is not considered to be 'ordinarily resident' in any year, if he is away for more than six weeks in that year, even if he owns his own property or business.
It is important to note at this point that there are circumstances where travelling away from the Island for longer than six weeks may be deemed essential and the Government of Jersey would take into consideration each individual's reasons.
For example, an ENTITLED person who leaves the Island for longer than six weeks whilst on an agreed secondment for work shall not be deemed to have broken their residence for the purposes of the Permanently Entitled status, although the period spent on secondment must be made up.
In addition, there are some other scenarios whereby a break from the Island is permitted and will not jeopardise the eventual claim to Permanently Entitled status and the Population Office are sympathetic, if discussed prior to leaving the Island for longer than six weeks.
What does he decide to do?
With just two years left before he achieves the PERMANENTLY ENTITLED status, he has decided to remain 'ordinarily resident' and enjoy up to six weeks of absence for holidays in any one year.
After two years, he will gain PERMANENTLY ENTITLED status and is then free to travel the world uninterrupted and return to his home when he wishes.
Does this scenario sound familiar?
Our directors have an understanding of residential regulations having worked with clients in this area for many years. We would be pleased to offer you a complimentary review of your circumstances and address any 'tax residency' queries that may also arise.
To find out more about the Jersey Residential Statuses please CLICK HERE
Please contact Derek Rhodes on 01534 753777 to arrange a meeting or email firstname.lastname@example.org