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27 November 2014

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You are in: Jersey > Inside the States > Other Business > GST on your inheritance?

Derek Whatmoor

GST on your inheritance?

The much debated, heavily criticised GST launches in May so we鈥檝e taken a look at Grandfather Clocks.

It鈥檚 very nearly here 鈥 the Goods and Services Tax comes into force on Tuesday 6 May and 3% will be added to almost everything you buy or do.

Senator Terry le Sueur

But the tax is applied to more than just your weekly shop. You鈥檒l also have to pay GST on any item you bring into the island worth more than 拢400 鈥 unless you鈥檙e moving to the island, in which case GST doesn鈥檛 apply.

One area you might not have thought about though is items you inherit or goods you鈥檝e been given by friends and family.

Let鈥檚 take a hypothetical situation.

Let鈥檚 say you have a Great Aunt with houses around the world who is also an avid collector of Grandfather Clocks.

Clock Face

This Great Aunt has decided to leave all of her clocks to you in her will - but they are scattered around the world and won鈥檛 arrive in Jersey until after 6 May.

My first instinct in this scenario is that you wouldn鈥檛 have to pay GST as you haven鈥檛 spent any money on the clocks 鈥 they were given to you 鈥 but I would be wrong.

So let鈥檚 carry on with our scenario. Each of the clocks your Great Aunt has left you had to be valued for shipping and insurance purposes and is each worth 拢1000.

One of the clocks is coming from your Great Aunt鈥檚 house in Iran; she brought the house before the war.

However, getting a large, wrapped and ticking object through customs from the Middle East isn鈥檛 exactly going to be easy 鈥 so you can just sell that one through an agent and have the 拢900 minus agents fee paid into your bank account.

It would have cost you over 拢200 to have it delivered to Jersey anyway.

But you still want to have some of the clocks in your house 鈥 after all you鈥檝e already registered the domain name granddaddyclocks.je ahead of the launch of your Grandfather Clocks of the world museum.

Grandfather Clock

Fortunately the next clock is coming in from her house in Kensington, London. If it was due to arrive on the 3 May 2008 the only cost would be delivery to your door.

However, as it won鈥檛 arrive until the Tuesday (GST Day) you will have to go to the Customs website and pay 拢30 before it can be released to you.

OK so you have to pay GST on the clock coming in from London but what about the clock due to arrive here from her little flat overlooking the Bois de Boulogne in Paris?听 Will that be treated the same?

A spokesman for Jersey Customs explained to us that: 鈥淭here is no specific relief on GST being levied on inherited goods that are imported into Jersey, no matter from which destination.鈥

OK so you have to pay 拢30 for the clock coming from the UK, another 拢30 for the clock coming from Europe but are there any differences for other parts of Europe not in the E U? What about the clock coming in from Russia or even China?

Let鈥檚 go back to the Customs spokesman. He explained that 鈥渢he origin, be it European, or outside the European Union is of no relevance as this is a local tax.听

Doing your taxes

鈥淭herefore your great aunts clock will be treated in the same way whether it is from St Petersburg, Boston Massachusetts, London, Paris or even Guernsey.鈥

So whatever the situation, in this instance, you will have to pay 拢30 pounds GST on every clock you want to bring to the island.

But is there hope on the horizon or is this a steadfast rule? Following a complaint from a member of the public about what he saw as a repulsive tax, Treasury Minister, Senator Terry Le Sueur said 鈥淚 understand and sympathise with your predicament. I will discuss with the GST Tax Office whether there is any scope within the Law for us to assist you.鈥

If they can assist him they can assist anyone in that predicament, but will they? Watch this space!

last updated: 28/04/2008 at 14:25
created: 28/04/2008

Have Your Say

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Jersey Pedant
It seems odd that, while the various personal reliefs from GST seem to be based on EU rules, that inherited goods, which are exempt from any tax in our twenty-seven neighbours, should not be similarly exempt in Jersey.

Dr.Money
VAT (nicely named GST so you don't think it's actually VAT) in a tax haven!!!!!!!!!!!!!!!!!!!!!!! i've heard it all now!!!! so what the going to do with all the extra revenue? Another serious note, say i buy a tv worth 拢500, will there be any way of recouping the local tax (a desk at the airport perhaps) when i leave the island? this is available at most major airports in uk and around the world. I'm guessing the answer will be NO, as no one has challenged to politicians about this. Highly unfair.

You are in: Jersey > Inside the States > Other Business > GST on your inheritance?

GST Exemptions

The main goods and services that will not attract GST are:

  • Employees鈥 salaries
  • Insurance and banking services
  • Postal services
  • Medical charges and prescription medicines
  • Supplies made by charities
  • Purchase, lease or rent of a home
  • School fees and registered child care
  • Exports and international services to non-residents
  • Air and sea fares to and from Jersey

A full list of exemptions is available in the booklet GST and the Consumer (see link above).

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