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WRITTEN QUESTION TO THE MINISTER FOR TREASURY AND RESOURCES BY DEPUTY G.P. SOUTHERN OF ST. HELIER
ANSWER TO BE TABLED ON MONDAY 16th JULY 2007
Question
- W i llthe Minister inform members,in respect of a private equity companyoperatingin Jersey and subject to Jersey tax -
(i ) w hether the profits accruing to the company from the onward sale of any acquired business would be
tax-free in Jersey?
(i i) the motivation for the usual three to five year gap between acquisition and sale of businesses by
private equity to minimise Capital Gains Tax in the United Kingdom would not exist in Jersey and could produce shorter term turnarounds?
- W i llthe Minister outline to memberswhatpowers, if any, he,orother Minister, hasto control thelevel of gearing' used to minimise tax onoperating profits by private equity companies?
Answer
- (i ) Y e s . It would be a capital gain. Jersey income tax is only levied onrevenueprofits.
(i i) It could, though the period between acquisition and sale is most likely to be determined by o t her
factors.
- I h ave nopowerstocontrol the levelof gearing ofanycompanywhich is currently not owned bythe States. TheJCRA can exercise powers to control the gearing of regulated companies.