On 18 May 2021, the Jersey Government put forward draft legislation which proposes to bring certain partnerships in the scope of economic substance requirements.
The reason behind these changes lies behind a review by the EU Code of Conduct Group to ECOFIN in November 2020, which singled out several jurisdictions, including Jersey, with the need to extend their economic substance requirements to include relevant partnerships.
The Jersey authorities proposed exclusions from the inclusion in scope of partnerships. These are proposed and it remains to be seen whether they will be included in the final regulations.
o are not for the purpose of securitisation or repackaging of assets, and
o would be collective investment funds except that the fund is prescribed not to constitute a collective investment fund in an Order made for the purposes of Article 3(7) of the Collective Investment Funds (Jersey) Law 1988.
 Anguilla, Barbados, Bermuda, British Virgin Islands, Cayman Islands, Guernsey, Isle of Man and Jersey
It is important to note that the disclosure requirements, if applicable, would apply to partnerships rather than underlying Limited Partners.”
Only those that undertook “relevant activities”, which are listed below, during the reporting year and which received an income from the relevant activity during that reporting period:
A partnership will meet the economic substance test in relation to a relevant activity if:
The draft legislation contains two types of penalties:
Final legislation expected in the coming weeks.Corporate Services