Collas Crill

Budget 2012: Share Transfer Duty proposals to close loophole

Guernsey's proposed Share Transfer Duty legislation should include a number of exemptions, says a Guernsey property law expert.

The purpose of the proposed legislation is to tax transfers of shares in companies which own Guernsey real property. Currently such transfers do not attract duty, as opposed to a conveyance, which would attract up to 3% document duty.

Richard Ogier, a property partner at Channel Islands law firm Collas Crill, says the exemptions should cover the transfer of shares in entities that own real property in Guernsey but are quoted on a recognised stock exchange, and the transfer of interests in any entity whose principal activity is not the ownership of real property, but which happens to own Guernsey real property.

"Fairness has been a perennial issue in discussions over Share Transfer Duty," said Mr Ogier, one of the most experienced property lawyers in Guernsey.

He added that he anticipated a method of valuing the real property owned by an entity, which also owns other assets, would also be introduced, in order to calculate the duty payable.

Richard doesn't anticipate that the law change will have a drastic effect on Guernsey's property market since the duty will be set at just 3%. He believes it will increase tax receipts for the island's Treasury but predicts the number of open market dwellings owned by companies will reduce in future years.

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