After much lobbying of government in the past few years, we can report that on 5 December 2012 our States legislature voted to re-introduce the cap on the level of probate duty payable in respect of a deceased person's movable estate in Jersey. Until 2005, there had been such a cap on the maximum amount of probate duty payable on an estate. Probate duty of 0.75% had been payable on the majority of the value of an estate up to £13,360,000. The effect of this was that the maximum amount of probate duty payable on an estate was capped at £100,000. After 2005, the rules were changed such that probate duty was payable on the entire value of an estate.
This put the Island at a competitive disadvantage and encouraged intermediaries to advise clients to adopt non-Jersey based structures in order to avoid the potential liability to probate duty. The potential loss of business was primarily in relation to the establishment and administration or management of companies owned by individuals rather than by trustees or corporations.
It also had the effect of reducing the amount of cash deposited in Jersey banks. Evidence was produced to government that significant sums were not coming to Jersey because of the potential probate duty costs.
The re-introduction of the cap to the same level as before 2005 (ie. £100,000), is to take effect from 1 January 2013, and will enhance Jersey's competitiveness and remove a barrier to investment in the Island by non-residents.