--- title: Lending money in Jersey? Check your JFSC and tax position first date: 2026-09-29T09:34:00+01:00 author: "jonny@ipopdigital.com" canonical_url: "https://www.bestwickrussell.je/insights/lending-money-in-jersey-check-your-jfsc-and-tax-position-first" section: Insights --- [← Insights](/insights)Most people think of anti-money laundering rules as something for banks, trust companies and big financial firms. So it often comes as a surprise that a local holding company, a family investment vehicle or even an individual who lends money could fall within Jersey's anti-money laundering regime and may need to register with the Jersey Financial Services Commission (JFSC). If you or your company lends money, or is thinking about it, here's what you need to know. ### **Lending is a regulated activity** Jersey's Proceeds of Crime (Jersey) Law 1999 sets out a list of activities that count as "financial services business". Lending is on that list. It covers ordinary loans as well as mortgages, consumer credit, factoring and financing commercial deals. If you carry on one of these activities as a business in or from Jersey, you must register with the JFSC. You then become subject to Jersey's anti-money laundering rules. These include carrying out checks on the people you lend to, keeping records, having proper procedures in place and reporting anything suspicious. The law doesn't make an exception for loans to family, friends or companies you're connected with. What matters is whether the lending is carried on as a business. ## **Lending to family can still count as a business.** ### **When is lending "a business"?** There's no simple definition. The JFSC's guidance treats it as a matter of judgement, looking at the overall picture. Factors that point towards lending being a business include: - Telling people, or advertising, that you lend money - Lending to more than one person - Lending regularly, rather than making a one-off loan - Earning interest or fees that are significant, either on their own or compared with your other income - Having staff, systems or processes set up for lending - Carrying on other regulated financial activities No single factor decides it. A company that makes one private loan to a friend at a modest rate of interest is likely to be in a very different position from one that regularly lends to several people. But the line isn't always obvious, and the answer depends on the facts. ### **Why it matters** Registration brings real obligations, and carrying on a regulated activity without registering can have serious consequences. It's much easier to consider the position before a loan is made than to put things right afterwards. ## **Could one loan put your whole company in the 10% tax bracket?** ### **There may be tax consequences too** Most Jersey companies pay income tax at 0%. However, under Article 123D of the Income Tax (Jersey) Law 1961, a "financial services company" is taxed at 10%. This includes a company that trades in providing credit to customers, by making loans or granting credit. The 10% rate applies to the company as a whole, not just to its lending. So if a holding company that also owns shares or an investment portfolio is treated as a financial services company, its other profits could be taxed at 10% as well. For many people, that undoes the tax planning behind holding assets in a company. The tax test is separate from the JFSC registration test, and the two don't always give the same answer. Loans to connected people don't count, and neither do credit facilities that aren't offered to Jersey residents, to businesses operating in Jersey, or to finance Jersey property. But a company that lends to unconnected people in Jersey on a trading basis could find itself in scope, so consider both questions together. ### **The rules may tighten in future** The JFSC recently consulted on changes to its guidance on who needs to register, some of which could have brought more people into scope. Those plans have been put on hold for now, but the JFSC has said it will consult again, so the rules may well change. If you lend money, or plan to, it's worth keeping your position under review rather than assuming it won't change. ### **What should you do?** If you or your company has made, or is thinking of making, take these steps: - Think about how the loan fits into your wider activities, including any other loans you've made or plan to make. - Consider the factors above honestly, especially if you charge interest or have lent to more than one person. - Keep a record of why you've concluded that registration is or isn't needed. - Review the position whenever something changes, such as a new loan, a new borrower or new JFSC guidance. ## **How we can help** At BestwickRussell, we help Jersey individuals and businesses understand their obligations and stay on the right side of the rules. If you're unsure whether your lending could require registration, we can help you work through the position and, where needed, point you towards specialist legal advice. **Talk to us to get a clear view of your lending position, for both registration and tax.** [Talk to us ](/contact) [Back to insights](/insights)