Guernsey Hotels | Guernsey information Any distribution by trustees of a discretionary trust

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

51. Any distribution by trustees of a discretionary trust or under any trust arrangement where the beneficiary has no absolute entitlement to such income is out of scope of the Agreements and therefore does not incur any liability to retention tax. Distributions so made are not interest payments; they are payments from a trust the source of which is the trustees exercising their power of appointment. Therefore, a trustee of a discretionary trust will not be a paying agent as that term is defined for the purposes of the Agreements. When a payment of interest is made by a financial institution to a trustee of a discretionary trust that financial institution will not be considered a paying agent for the purposes of the Agreements in respect of those payments.

52. In the absence of any evidence to the contrary, an individual trustee resident in an EU Member State may be considered to be a professional trustee for the purposes of paragraph 50, and their paying agents’ obligations, if any, can be left to be determined by their Member State of residence; and where there are a number of trustees some of whom are and some of whom are not resident in an EU Member State the body of trustees can be considered out of scope for the purposes of the Agreements.

53. The following are further examples of circumstances in which a person would not be a paying agent, although this list is not exhaustive – • a bank which passively makes a payment, for example, by processing a cheque or arranging for the electronic transfer of funds on behalf of one of its customers, or receives payments credited to a customer’s account; • a person who only makes payments other than interest payments, for example, pension, annuity and rental income payments; • a person not in business who makes interest payments, for example on a personal loan to an individual resident in an EU Member State (i.e. the individual is not borrowing the money for a business purpose); • a person who does not make interest payments in the course of a business or profession; • the payments made are not interest payments; • the person to whom the payments are made is not a person subject to the retention tax facility; that is, the person is not an individual resident in an EU Member State.

54. A paying agent is someone who makes an interest payment for the immediate and absolute benefit of an eligible beneficial owner. This means that, if a payment is made through an intermediary or a number of intermediaries the paying agent with responsibility for retaining the tax will be whoever is the last person who makes the interest payment to the beneficial owner. A person is not a paying agent, therefore, if the interest payment liable to the retention tax is made to another person who is a paying agent. The relevant paying agent is always the one that is the "last link in the payment chain" before the individual resident in the EU Member State who is in receipt of an interest payment. Where the last link in the payment chain is outside the Island no retention tax need be deducted within the Island. Whether any retention tax will be levied will then depend on whether the last link in the payment chain is within the scope of the EU Directive or the supporting agreements with the named third countries and thedependent and associated territories of an EU Member State.

55. The Agreements state that "Any entity established in a contracting party to which interest is paid or for which interest is secured for the benefit of a beneficial owner shall also be considered a paying agent upon such payment or securing of such payment". However this provision does not apply to the following entities which are specifically excluded from the definition of paying agent in this instance - (a) it is a legal person; (b) its profits are taxed under the general arrangements for business taxation; or (c) it is a UCITS recognised in accordance with Directive 85/611/EEC of the Council or an equivalent undertaking for collective investment established in the Island. All partnerships operating in the Island are considered to be covered by (b) – see paragraph 33. For the definition of an equivalent undertaking for collective investment, see paragraph 87. Other investment vehicles can be assumed to be covered by either (a) or (b).

56. The Agreements also provide that "An economic operator paying interest to, or securing interest for, such an entity established in the other contracting party which is considered a paying agent under the above paragraph shall communicate the name and address of the entity and the total amount of interest paid to, or secured for, the entity to the competent authority of its contracting party of establishment, which will pass this information on to the competent authority of the contracting party where the entity is established". However, the implementation of this provision will not be insisted upon where the administrative burdenthat this would impose would be disproportionate to the value of the information to be provided. How is the identity and residence of a beneficial owner to be established?

57. The identification rules to be applied should mirror the "know your customer" ("KYC") rules that already are required to be complied with under the Island’s anti-money laundering legislation ("AML"). Paying agents therefore should be able to cater for the retention tax requirements through their existing KYC systems.

58. The Agreements provide for the application of different requirements depending on whether the contractual relations between the paying agent and the individual commenced before or on and after the 1st January 2004. However, in both cases the requirements will not exceed what is already necessary under AML rules. In most cases it should be clear whether contractual relations exist, and if so when they began. However there will be occasions when it is less clear. It will be for the paying agent to exercise reasonable judgement but, as guidance, pre-1st January 2004 contractual relations can be considered to continue to apply after that date where – • the underlying contractual basis for the pre-1st January 2004 relationship continues; • the pre-1st January 2004 customer takes advantage of a new product or service from the same paying agent; • a business is acquired or merged with another business; • a pre-1st January 2004 relationship is transferred from one group entity to another.

59. For contractual relations entered into before 1st January 2004 a paying agent can establish the identity of the beneficial owner, consisting of his name and address, by using the information already at his disposal and in accordance with the KYC requirements for anti-money laundering.

60. For contractual relations entered into, or transactions carried out in the absence of contractual relations, on or after 1st January 2004, the paying agent must establish the identity of the beneficial owner by obtaining his name and address (and as in pre-1st January 2004 contractual relations this can be achieved using information held under existing KYC requirements for AML) and also, if there is one, a tax identification number ("TIN") allocated by the EU Member State of residence for tax purposes. The TIN should be established from the passport or the official identity card presented by the beneficial owner. If the TIN is not mentioned on the passport, on the official identity card or any other documentary proof of identity presented by the beneficial owner, the identity can be supplemented by obtaining their date and place of birth from their passport or official identification card.

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