Guernsey Hotels | Guernsey information The transitional period does not have a fixed end date

La Pointe Farm, Rue du Lorier, St Pierre du Bois, Guernsey. GY7 9JU
Tel 07781 434752 Fax 01481 268217 Email res@lelorier.com

The one and only establishment in Guernsey offering nightly terms on five star accommodation
Why settle for a hotel room when you can have a whole suite for your stay in Guernsey

	Hotel Apartments 'Le Lorier' & 'La Hougette' have been awarded the coveted 'five star' grade which is a guarantee of 1st class accommodation, and we are the only establishment in Guernsey that will offer five star accommodation on a nightly basis
Apartment 'Le Lorier' is on the first floor, please click here for a full description Apartment 'La Hougette' is on the ground floor, please click here for a full description	The hotel apartments are situated in the countryside parish of St Pierre du Bois, offering pleasant walks through country lanes that surround us, yet within five minutes drive you will find restaurants, bars, cinema etc. etc. And only twenty minutes drive to St Peter Port, the islands main town and financial district.
Our aim is to offer the visiting business executive an alternative to the normal hotel room/suite, more a home from home, with all the facilities one would be used too - Guernsey Hotels

21. The transitional period does not have a fixed end date. It will only come to an end when the terms set out in Article 10 of the Directive are met. To quote from the Directive – "The transitional period shall end at the end of the first full fiscal year following the later of the following dates:- • The date of entry into force of an agreement between the European Community, following a unanimous decision of the Council, and the last of the Swiss Confederation, the Principality of Liechtenstein, the Republic of San Marino, the Principality of Monaco and the Principality of Andorra, providing for the exchange of information upon request as defined in the OECD Model Agreement on Exchange of Information on Tax Matters released on 18th April, 2002 (hereinafter the "OECD Model Agreement") with respect to interest payments, as defined in this Directive, made by paying agents established within their respective territories to beneficial owners resident in the territory to which the Directive applies, in addition to the simultaneous application by those same countries of a withholding tax on such payments at the rate defined for the corresponding periods referred to in Article 11(1) of the Directive; • The date on which the Council agrees by unanimity that the United States of America is committed to exchange of information upon request as defined in the OECD Model Agreement in respect of interest payments, as defined in this Directive, made by paying agents established within its territory to beneficial owners resident in the territory to which the Directive applies."

22. Although the Island can take full advantage of these transitional arrangements, it is also open to the Island at any time to elect to apply the automatic exchange of information provisions in the same manner as is provided for in Chapter II of the Directive. If the Island so elects it shall no longer apply the retention tax and revenue sharing provided for in Article 9 of the Agreements. A decision to so elect however would not be made without extensive prior consultation with the finance industry and other interested parties. What will be the rate of retention tax applied?

23. During the transitional period, as defined above, which is due to commence on 1st July 2005, the retention tax shall be levied at the rate of 15% during the first three years of that period, 20% for the subsequent three years and 35% thereafter. Who will benefit from the proceeds of the retention tax?

24. Of the retention tax to be levied 25% will be retained by the Island authorities and 75% will be transferred by the Income Tax Office to the EU Member State of residence of the beneficial owner of the interest. That transfer is to take place at the latest six months following the end of the Island’s tax year. It is emphasised that the money to be transferred will be a total amount per country and the identity of the individuals from whose savings income the retention tax will have been deducted will remain confidential to the paying agent concerned.How will the requirements be enforced?

25. The island legislation (see paragraph 5) provides for the retention tax to be applied to those who are to be subject to the tax. Provision is also made for the exchange of information where those subject to the retention tax decide to take advantage of the voluntary disclosure arrangements (see paragraphs 37-44). Who is to be liable to the retention tax?

26. An individual beneficial owner resident in an EU Member State who receives a savings income payment (hereinafter referred to as an "interest payment" but see paragraph 77 for a definition of the savings income that is subject to retention tax) made by a paying agent established in the Island, will potentially be liable to the retention tax.

27. An individual will not be deemed to be the beneficial owner when he or she (a) acts as a paying agent (see paragraphs 48-56); (b) acts on behalf of – • a legal person; • an entity which is taxed on its profits under the general arrangements for business taxation; • a UCITS authorised in accordance with Directive 85/611/EEC or an equivalent undertaking for collective investment established in the Island (see paragraphs 84 - 100); • an entity to which reference is made in Article 7(2) of the Agreements. (c) acts on behalf of another individual who is the beneficial owner and discloses to the paying agent the identity of that beneficial owner. If a paying agent holds information which gives him reason to believe that the individual he pays interest to does not receive the interest payment for his own benefit, because he is acting on behalf of another individual, the agent should take the same reasonable steps to establish who the beneficial owner of the payment is as would be the practice in complying with anti-money laundering and terrorist financing requirements.

28. The retention tax will not apply to payments to residents outside the EU, residents of the dependent or associated territories of the Member States, which will include residents of the Bailiwick of Guernsey, the Isle of Man and Jersey and residents of Switzerland and the other named third countries (Andorra, Liechtenstein, Monaco and San Marino).

29. Where an interest payment is credited to a joint account and where one of the joint account holders is a resident of an EU Member State the latter will normally be liable to the retention tax. The retention tax may be applied on the basis that interest is allocated equally among the members of the joint account. However, alternative arrangements at the discretion of the paying agent may well be appropriate. What should be kept in mind is the extent to which a joint account holder who is resident in an EU Member State has the benefit of the interest payments credited to the account.

30. There may be other such complications. Another example is where an individual receives an interest payment for a period of which part is spent as resident outside the EU and part is spent as resident inside the EU. If it is possible to separately allocate a portion of the interest received for that part of the year during which the person was resident outside the EU, that portion of the interest payment need not be subject to the retention tax. This apportionment, which is at the paying agent’s discretion, can also be adopted where the voluntary disclosure option is chosen.

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