Charity - A Jersey Focus

Jersey has long been a jurisdiction of choice for charities and philanthropy. The flexibility of trusts, foundations and companies means clients are able to establish structures tailored to their specific requirements whether these be wholly charitable or quasi-charitable.

Whilst the legal concept of a charity is well established in Jersey, the introduction of the main provisions of the Charities (Jersey) Law 2014 (the Law) on 1 May 2018 has finally allowed entities which are exclusively charitable to formally register as Jersey charities under the Law.

Although registration is voluntary, it may be necessary to ensure entitlement to certain Jersey tax reliefs and to the use of the word "charity".

The Law

• Introduced a register of recognised charities with general, restricted and historic sections which provide distinct levels of public access to data on the register;
• Created the office of the Commissioner who will oversee all charities and ensure enforcement of the Law;
• Provides a legal framework by which charities in Jersey will be regulated.

Five things you need to know...

• The Law restricts the use of the expressions "charity" and "Jersey charity" so that from 2019 only registered charities in Jersey may refer to themselves as a "Jersey charity". An exemption applies for charities registered in the UK and elsewhere, who may continue to refer to themselves as a "charity" provided confirmation is provided to the Commissioner that all local anti-discrimination laws are complied with. The Commissioner has also requested that such exempt charities, who are active in Jersey, provide details of their activities in Jersey.
• Individuals or corporate bodies who administer and run charities in Jersey are known as Governors and have a new statutory duty under the Law in addition to any existing duties as trustee of a trust or council members of a foundation.
• The charity register is divided into two sections - the general (public) section and the restricted section. The general (public) section of the register is for entities wishing to identify as a Jersey charity, to raise funds from the public, to have full access to Jersey tax reliefs and to use the term "charity". Whereas the restricted section is likely to be for those not wishing to raise funds from the public but still wanting Jersey tax reliefs and the right to use the term "charity" and also looking to preserve client confidentiality.
• From 2019 entities must be registered as a charity under the Law to obtain the relevant charitable exemptions from Jersey taxation albeit subject to limited exceptions. Registered UK charities who are exempt from registration in Jersey will continue to benefit from the current tax exemptions and allowances save for the generous "lump sum donation" rules which will only then apply to registered "Jersey charities".
• The "lump sum donation" rules work in a similar manner to Gift Aid in the UK so that a registered Jersey charity who receives a donation from a Jersey resident tax payer in excess of £50 up to a maximum amount of £500,000 may be able to claim from the Jersey tax office an additional 25% on the amount donated. This is a generous benefit for charities which are registered in Jersey and, one which we understand, will not be available for those UK charities who operate in Jersey but choose not to register, relying on the exemption.

Five things you need to do…

• Review the charitable entities you administer which operate in Jersey and consider whether to register in Jersey, and if the decision is made to register, whether the registration application should be made under the general or restricted sections.
• Check the names of the companies, trusts and foundations you administer to ascertain if they have the word "charity" in the title and consider, specifically for those entities who will not be registering and are not exempt, whether the entity name needs amending.
• If registering, you will need to draft registered charitable purposes and a registered public benefit statement for each entity and collate the documents required for registration.
• Discuss with donors who may be interested in having a registered philanthropic structure in Jersey - a major, politically-stable, internationally looking and tax neutral financial centre, with strong professional services and legal foundations.
• Get in touch with our specialist team to learn more about the opportunities created by the Law

Simon Lofthouse (Associate, Ogier)

Simon is a member of the Jersey Private Client and Trusts team specialising in cross-border estate planning. He also provides advice on creating and administering trust settlements and foundations.