Double Tax Agreement Uk Guernsey

Double Tax Agreement Uk Guernsey

Double Tax Agreement UK Guernsey: What You Need to Know

As a UK business or individual looking to do business in Guernsey, it`s essential to understand the tax implications of any financial transactions you undertake. Fortunately, the UK and Guernsey have entered into a double tax agreement (DTA) designed to prevent double taxation on income and capital gains.

What is a Double Tax Agreement?

A DTA is a treaty between two countries designed to protect taxpayers from being taxed twice on the same income. Under a DTA, the two countries agree on how to allocate taxing rights to each other, so taxpayers only pay tax in one country.

In the case of the UK and Guernsey, the DTA allocates taxing rights on different types of income. For example, business profits are taxed in the country where the business operates, while dividends are taxed in the country of residence of the recipient.

What Does the Double Tax Agreement Cover?

The UK-Guernsey DTA covers a wide range of taxes, including income tax, corporation tax, capital gains tax, and inheritance tax. It also includes provisions on the exchange of information between the taxing authorities of both countries, so they can ensure compliance with the agreement.

Some of the key provisions include:

1. Personal income tax

Under the DTA, individuals who are tax residents of one country but receive income from the other country will only pay tax in their country of residence.

2. Corporation tax

Companies that operate in both countries will only be taxed on their profits in the country where they live. This ensures that they are not taxed twice on the same income.

3. Capital gains tax

The DTA ensures that capital gains on assets, such as property, are only taxed in the country where the asset is located.

4. Inheritance tax

The DTA ensures that inheritance tax is only payable in the country of residence of the deceased person, rather than in both countries.

What are the Benefits of the Double Tax Agreement?

The UK-Guernsey DTA provides businesses and individuals with certainty and clarity on their tax obligations when doing business in both countries. The agreement helps to prevent double taxation, which can be costly and time-consuming for taxpayers.

It also encourages cross-border investment and trade, as businesses can operate with greater certainty and predictability when it comes to tax liabilities.


The UK-Guernsey Double Tax Agreement is an important tool for businesses and individuals who operate in both countries. It provides certainty and clarity on tax obligations and helps to prevent double taxation.

If you are doing business in Guernsey or are a Guernsey resident doing business in the UK, it`s important to understand the provisions of the DTA and ensure that you comply with its requirements. A tax advisor can help you navigate the complexities of the agreement and ensure that you are meeting your tax obligations in both countries.