Although two of the measures introduced in the Chancellor's report - namely, changes to the tax treatment of Employee Benefits Trusts (EBTs), and to the treatement of Controlled Foreign Companies (CFCs)- are likely to affect the Island, the rule changes are not as stringent as was feared.

Speaking to the Evening Post on Thursday with regard to the deferral of corporate tax relief on contributions made by employers to EBTs, KPMG tax partner, John Riva observed that: 'It will make things more difficult, but it's not a monumental change.'

The CFC changes - which will make the exempt activities test for offshore banks and insurance companies more stringent- were also a great relief to the finance centre, according to the JEP.

During the height of the Savings Tax Directive and Code of Business Condust disputes with the Channel Island jurisdictions this year, the UK government put in place enabling legislation which would have allowed it to completely deny tax exemptions for CFCs operating in jurisdictions considered by it to have 'harmful' tax measures in place.