Guernsey Finance

When England's unpopular King John lost Normandy to King Philip Augustus of France, in 1204, the English withdrawal left the island dangerously exposed, presenting islanders with a stark choice: to maintain their allegiance to the Continent, or to side with England. They chose the latter, which was has proven to be the most significant event in the Island's history

The Island of Guernsey had been part of the Duchy of Normandy, extending over the Channel Islands and part of the mainland of France, before the conquest of England in 1066 when Duke William II of Normandy became King William I of England. However, in 1204, when King John of England lost Continental Normandy, Guernsey became, and has remained, a dependency of the British Crown.

As a dependency of the British Crown, the Island has evolved a separate legislature, and, by convention, Guernsey has the right to legislate without the involvement of the United Kingdom in domestic matters, including taxation - there has been a flat rate of personal income tax, at 20 per cent, for several decades. Whilst the UK has assumed responsibility for the Island's foreign affairs, it acts only with the consent of the Guernsey authorities, who moreover frequently legislate independently to implement international agreements.

The old language, a distinctive Norman-French patois, is not commonly spoken today but French place and street names abound to remind visitors that this is not technically part of the UK or even the European Union and that the Loyal Toast in Guernsey is still drunk to 'The Queen, our Duke'.