Security Interests (Jersey) Law 2012: Share Transfer Property: Registration Fees

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A decision made 2 August 2013:

Decision Reference: MD-C-2013-0088

Decision Summary Title :

Share transfer property – Registration fees on the Security Interests Register

Date of Decision Summary:

30 July 2013

Decision Summary Author:

Officer,

Finance Industry Development

Decision Summary:

Public or Exempt?

(State clauses from Code of Practice booklet)

Public

Type of Report:

Oral or Written?

Written

Person Giving

Oral Report:

Written Report

Title :

Written Report to Share transfer property – Registration fees on the Security Interests Register

Date of Written Report:

30 July 2013

Written Report Author:

Officer,

Finance Industry Development

Written Report :

Public or Exempt?

(State clauses from Code of Practice booklet)

Public

Subject:

Share transfer property – Registration fees on the Security Interests Register (“SIR”)

Decision(s):

The Minister decided to support the proposed policy position put forward by the Jersey Financial Services Commission (“JFSC”) that security interests taken over share transfer properties purchased by first time buyers should not be charged a fee for registration on the SIR.

Reason(s) for Decision:

A priority for the Government is enabling first time buyers to purchase property. Under the new Security Interests (Jersey) Law 2012 (“the Law”) share transfer properties will be covered when lending is granted on those properties.

Under the Law, in order to achieve the best possible security, lenders will seek to register lending on the SIR. The JFSC propose to set the fee for registrations of 20 years or longer at a flat fee of £150. It is understood that in the majority of cases that fee will be passed on to the borrower.

It is not desirable, or within current Government policy, for a further fee of £150 to be, in reality, charged to a first time buyer of a share transfer property. It is also the case that the Government have stated that the SIR must cover its own running and on-going maintenance costs and provide for repayment of a Government grant for its construction through fees generated.

It is therefore proposed that the Chief Minister supports the policy position put forward by the JFSC that Security Interests taken over collateral that consists of shares representing a property purchased under the reduced first time buyer Land Transaction Tax scheme (pursuant to Article 5 of the Taxation (Land Transactions) (Jersey) Law 2009) should not be required to pay a registration fee on the SIR.

Resource Implications:

There are no direct resource implications for the States of Jersey as a result of this decision. The JFSC will potentially lose in the region of £15,000 per annum in fees from the SIR by excluding first time buyers of share transfer property from payment of a registration fee.

Action required:

That the JFSC are notified that the Minister has made a Ministerial Decision supporting the proposed policy position.

Signature:

Senator I. J. Gorst

Position:

Chief Minister

Date Signed:

2 August 2013

Date of Decision (If different from Date Signed):