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Economic substance: partnership guidance notes published


The governments of Guernsey, Jersey and the Isle of Man have published joint guidance notes on the scope and application of formal economic substance requirements to partnerships.

The relevant legislation for

  • Guernsey is the Income Tax (substance Requirements) (Implementation) Regulations, 2021 and,
  • Jersey, the Taxation (Partnerships – Economic Substance) (Jersey) Law 2021.

The economic substance test set out in the legislation

  • Must be met from 1 July 2021 for partnerships established before that date, and
  • From 1 January 2022 for all other partnerships.
  • Funds structured as partnerships are not required to meet the test.

The guidance notes cover, among other things,

  • Identifying the governing body and "place of effective management" of the partnership, and
  • The exemptions where partnerships carry on solely domestic activities or where all the partners are individuals subject to income tax in the respective island.

Please see MOURANTS briefings for more information.