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Is there an enhanced AML risk with wealthy Jersey immigrants spending between £2.5 and £8.0 rather than over £10m!!!!

16/09/2022

An article in the JEP [14 Sept 2022] reminded me that Jersey estate agents and lawyers might sometimes forget that when considering Jersey AML risk, a sector must attract additional attention through an enhanced risk approach.

According to the JEP article, some Jersey estate agents are seeing YOUNG super-wealthy immigrants changing the face of high-net-worth migration in Jersey but still wishing to spend between £2.5 and £8.0

The article provides the following information:-

As of December last year, 184 people were living in Jersey who had arrived under

  • The 2(1)e licence scheme, or its previous iterations, gives wealthy immigrants unique residency and housing rights, plus preferential tax status.

There were

  • 2021 = 23 applications approved during 2021, while from
  • From 2018 to 2020, an average of 19 applications were accepted.

Properties for sale for £10mill and over

  • 2022 - As of 14 Sept 2022, there were 28 properties listed online with asking prices over £10 million.
  • One high-price property which remains on the market is a mansion in Trinity called Maison de la Valette, and it was put up for sale in September 2021 with a £39.95m price tag.
    • If the property achieves its asking price, it will regain the title of the most expensive home on the Island.
    • Maison de la Valette was previously known as the priciest mansion in Jersey after it sold for £25m in September 2016.
    • But it was overtaken by Eden House, in St Brelade, which was bought for £31m in April last year.

Harry Trower, a director at Broadlands, said that

  • The demographic of prospective high-net-worth individuals coming to the Island had become younger – bringing a shift in housing needs, with less interest in properties worth over £10 million.
  • ‘People don’t want to spend that kind of money over here. “High net-worths” that come to the Island tend to spend a minimum of £2.5m and go up to about £8m.
  • ‘Some reasons for that are that they don’t know how long they’re going to spend in Jersey, and they don’t want to pay the stamp duty on properties over the £10m mark, as the jump is considerably higher than properties below that point.
  • ‘There is a new demographic of high-networths in their 40s, 30s and even 20s. They don’t want to spend huge amounts in Jersey; they are younger people who want to enjoy their family life.’
  • Not everyone wanted to pay for a big estate, which cost a lot to maintain.
  • ‘Some high-net-worths will have come from large estates in the UK, and they don’t want to be constantly surrounded by gardeners and cleaners.
  • ‘They want a simple life and to enjoy their wealth,’
  • ‘Covid has taught us all a lesson; more people are working remotely, and some realise they can move to Jersey, while we have easy access to other markets such as London.’
  • it was common for big properties to be on the market for a considerable amount of time, but every now and then, there would be the ‘odd glitch’ when a large property would sell very quickly.

Estate agent Clifford Wilson [@Wilson Knight Frank] said that demand for such properties ‘remains at a dribble’.

  1. Discussing Maison de la Valette, he added:
    1. ‘Inevitably, the possible clientele for such a property is small, but there are buyers out there nonetheless.
    2. There has been a declared strong interest from a particular party, but the property remains fully available.’
  2. Mr Wilson said that there was a modest level of new high-net-worth people appearing regularly and that the ‘bulk percentage’ of buyers tended to make property purchases ranging from £5m to £10m.
    1. ‘If anything, the tendency is that they appear younger and younger, although the demographic remains fairly widespread.
    2. ‘Younger people can now work from home, and they often tend to look for a family-sized office or something in the style of a boardroom rather than a small study,’ he said.
    3. ‘Jersey remains an attractive destination for high-net-worth individuals, and the balance of quality of life and attractive taxation is appealing for people.’

Read the article here

https://edition.pagesuite.com/infinity/article_popover_share.aspx?guid=37f93c41-3e6e-4ce3-9294-c513ab888e84

JERSEY