Commercial real estate transactions in Jersey
The Jersey Public Registry records property transactions, including commercial real estate transactions, and maintains contracts for public inspection. In contrast to the Land Registry of England and Wales, the Jersey Public Registry does not guarantee title to registered land.
In essence, the Jersey law firm acting for the purchaser effectively certifies title for commercial real estate transactions. As such, the due diligence process can be somewhat more involved than in other jurisdictions.
When are commercial real estate transactions passed in Jersey?
Conveyances of commercial real estate are only passed before the Royal Court of Jersey on a Friday afternoon.
The transfer of the entire issued share capital of a property holding company may take place at any time during the week, not just on Fridays.
Once passed by the Royal Court, the freehold commercial real estate contract is recorded at the Public Registry. However, the registry plays a much less significant role than the Land Registry in England and Wales. It simply records details of property documents, and does not provide a state guarantee of title.
Commercial real estate transactions and security over freehold land will not take effect in law until the contract has been passed before the Royal Court.
In relation to conveyancing of freehold property, the parties to the transaction are required to attend the Royal Court. This must be either personally or via an attorney or authorised representative to appear on behalf of themselves or their company.
Mortgages secured over immovable property must be registered in the Royal Court of Jersey on a Friday. Clients should bear these points in mind when timing the completion of any related transactions.
Security over shares can be registered any day of the week in the security interest register held at the Jersey Financial Services Commission.
Transfer of commercial immovable property may require governmental consent.
In relation to the transfer of shares, there may also be other consents required, such as control of borrowing regulations.
Conveyances of commercial freehold property attract Stamp Duty. It should be noted that stamp duty is also payable on related loans.
Transfers of shares relating to commercial property do not generally attract land transaction tax, nor Jersey Goods and Services Tax (GST), but bear in mind if there is an associated borrowing which is to be secured as a charge against the company’s property, tax will be payable on that element of the transaction.
Income derived from Jersey property is taxed at 20%, but this is subject to deductions and relief for normal outgoings. In addition, as in England and Wales, capital allowances may be claimed for plant and machinery. Jersey does not have capital gains tax liability on property, nor inheritance tax.