In their May update on independent Jersey personal taxation, Kasia Marszalik and Phil Crosby commented on the treatment of suspended 2019 tax liabilities, at which time residents were required to inform Revenue Jersey by 30 September 2026 of their chosen settlement method.

In this article, Kasia and Phil provide an update on suspended 2019 tax liabilities, starting with the news that the deadline for decision making has been extended to 31 October 2026.

Jersey Prior Year Basis: What you need to know before 31 October 2026

For many Jersey residents who previously paid their Jersey income tax under the Prior Year Basis, there may still be an outstanding tax liability relating to 2019.

With the deadline to choose how to pay this balance approaching, it is important to understand what the suspended 2019 liability is, what the options are, and what happens if a choice is not made.

The deadline to choose an option is 31 October 2026.

What was the Prior Year Basis?

Before 2020, Jersey operated two mechanisms for individual taxpayers - the Prior Year Basis (PYB) and the Current Year Basis (CYB), with CYB having been introduced alongside ITIS.  Under the PYB, taxpayers paid their tax a year in arrears.

Stimulated by pressure to reform the tax system and the impact of the Covid Pandemic, from 2020 Jersey moved all taxpayers to the CYB under which Jersey residents are now generally taxed on their income arising in the same year tax is paid.

While this change was intended to simplify the tax Jersey system and removed a previous issue that residents can have a full year of tax to settle in the year after they cease working (eg through retirement), it also created a transitional issue.

Why do many residents still owe tax from 2019?

When Jersey moved to CYB, there was an outstanding year of unpaid tax resulting from the way the previous system worked (ie as payments in 2020 were applied against residents’ 2020 earnings, no payments were applied against the tax due on their 2019 earnings).

Rather than requiring taxpayers to settle this amount immediately alongside their new CYB liability and be faced with two years’ tax payments in 2020, the Government of Jersey allowed 2019 liabilities to be deferred.
This means that for many former PYB taxpayers their 2019 liability remains unpaid.

It is important to understand that this is not a new or additional tax. It is the 2019 tax liability that was deferred as part of the transition from CYB that has not been paid.

Who has a 2019 PYB liability?

For taxpayers previously taxed under the PYB, there may be an outstanding 2019 liability.

If unsure, taxpayers should check their tax records or contact Revenue Jersey.

What if the 2029 tax liability includes a spouse or civil partner?

Responsibility for a suspended 2019 liability is determined by the tax rules that applied for the 2019 year of assessment.

Where a couple was jointly assessed for 2019, the person who was the primary taxpayer for 2019 generally remains responsible for the outstanding liability until it has been paid in full.

However, different considerations can apply where a couple was separately assessed, has subsequently separated or divorced, or where there is a dispute regarding responsibility for the liability. In these circumstances, the position may need to be considered by Revenue Jersey based on the individual circumstances of the taxpayers concerned.

What are the payment options?

There are three main options available for dealing with a suspended 2019 liability.

Spread the payment over time

Taxpayers can choose to spread their payments over a period of up to 17 years.

Payments must start in 2027, and the full amount must be paid by 31 December 2043 at the latest.

A shorter repayment period can be requested.

The standard 17-year arrangement requires at least 1/17 of the outstanding amount to be paid annually.

Additional payments may be made if a taxpayer wants to reduce the outstanding balance and pay sooner.

Payment can also commence earlier, and it is not necessary to wait until 2027. 

If a taxpayer does not make a payment-option election by 31 October 2026, they will automatically be placed on the 17-year payment plan.

Pay the full amount now

For taxpayers with the funds and a desire to avoid an ongoing obligation, their entire 2019 liability can be settled now provided it is paid by 31 October 2026.

Alternatively, the balance of a liability can be settled in full later where a taxpayer initially chooses another payment option.

Pay when reaching pension age

Taxpayers who have not yet reached Jersey pension age may be eligible to choose to pay when reaching pension age.

To be granted this option, taxpayers must have a suitable financial product or asset that will provide sufficient cash to pay the liability in full within 12 months of reaching pension age.

For example, this could be a pension arrangement that provides a lump sum on retirement. Other financial products or assets may also qualify.

Taxpayers must confirm to Revenue Jersey they have such an arrangement, and may be asked to provide evidence.

This election is not available for those who have already reached pension age.

What happens if taxpayers do nothing?

The most important date to remember is 31 October 2026.  This is the deadline for choosing a payment option.

If no election is made by this date, Revenue Jersey will automatically place the taxpayer onto the 17-year payment plan.

Payments will start in 2027, with the full amount due by 31 December 2043.

Doing nothing does not mean the liability disappears. It simply means that the default payment arrangement will apply.

Can taxpayers take a payment holiday?

Yes. Under the payment-plan arrangements, taxpayers may apply for a payment holiday of up to one year without having to provide a reason.

If a longer payment holiday is required, or if a second payment holiday is requested, taxpayers will need to provide supporting evidence explaining the circumstances of their request.

A payment holiday does not reduce the amount owed nor move the final deadline beyond 31 December 2043. Instalments may therefore need to increase after a payment holiday.

What about the financial burden of meeting these obligations?

For taxpayers experiencing financial difficulties or who are concerned about being meeting their obligations, it is important to contact Revenue Jersey as soon as possible who can consider circumstances and may consider alternative repayment arrangements.

Do not simply stop making payments if unable to keep up with an agreed arrangement. Contact Revenue Jersey and explain the situation.

Are there circumstances where early repayment may be required?

Yes.  A suspended 2019 tax liability becomes fully due and payable on the date a taxpayer leaves Jersey permanently or otherwise become non-resident.

Any outstanding tax payable (for all tax years, not just 2019) will form a liability on the Estate of a deceased Jersey taxpayer.

Which option is best?

There is no single option that will be right for everyone and it will depend on current and future personal circumstances.

Before deciding, taxpayers should consider how the different options could affect their finances both now and in the future.

If unsure, consider seeking independent financial advice.

What should taxpayers be doing now?

For taxpayers with a suspended 2019 liability, there are three simple steps to take:

  • Check your liability and make sure you know how much is owed.
  • Consider the payment options and decide which is most appropriate for your circumstances.
  • Make your election by 31 October 2026.

Finding out more

For many Jersey residents, their 2019 situation may feel confusing because it relates to a tax system that Jersey stopped using several years ago.  And for many it may not be relevant; not everyone who was a taxpayer in 2019 still has a liability and those who have become Jersey tax resident since 2019 and have only paid their tax on the CYB are unlikely to have a suspended liability.

The important thing to remember for those who do have a balance payable is that the liability is a deferred 2019 tax amount, not a new tax.

Taking the time now to understand the options can help taxpayers select an arrangement that works best for their circumstances.

Detailed information about suspended 2019 liabilities, payment options and the election process is available from the Government of Jersey.

Revenue Jersey’s PYB payment calculator can be used to help understand the potential cost of different payment periods.

For the latest information, visit the Government of Jersey official website or contact Revenue Jersey directly.

Disclaimer

This summary has been prepared for general awareness of Revenue Jersey’s approach to suspended 2019 tax liabilities.  It does not constitute tax advice and should not be relied upon as such.  RSM Channel Islands accepts no liability for the content of this summary.  Specific advice should be sought from the RSM Channel Islands tax team.