![]() |
An increasing number of High Net Worth Individuals are taking advantage of the fiscal and lifestyle advantages attainable by establishing residency in Gibraltar.
These include a capped tax liability under the "Category 2" rules coupled with the benefits of living in a mild Mediterranean climate and the wide range of activities that can be enjoyed from Gibraltar's geographical position. Gibraltar is a dynamic international financial centre situated within the EU, enjoying an excellent infrastructure and attracting more than 7 million visitors a year.
Key Tax Benefits
- Capped tax liability based on income of £60,000.
- Maximum tax payable £20,000.
- Minimum tax payable of £18,000.
- No requirement to disclose worldwide income.
- Spouse and family income may be included.
- No minimum physical presence requirement in order to retain residency.
- No capital taxation including wealth tax, inheritance tax and gifts tax.
- Under the "Category 2" rules individuals are subject to a cap on their tax liability with income tax
- payable only on first £60,000 of taxable income which arises in or is remitted to Gibraltar. This gives rise to a maximum annual tax liability of less than £20,000.
As taxable income does not include, for example, capital gains, gifts or income from savings it is possible to lower the tax liability further. However, a minimum annual tax liability of £18,000 is applied which is pro-rated in year of arrival. The Gibraltar tax year runs from 1 July to 30 June.
Main Requirements
In order to become a Category 2 resident in Gibraltar the following conditions must be taken into account:
- The applicant must have a minimum net wealth of £2 million.
- The applicant must also have exclusive use of the approved property in Gibraltar. The property must be of a certain standard and appropriate to sustain the lifestyle of the individual and family. The property may either be bought or rented.
- Unlike other jurisdictions, there is no minimum physical presence requirement in order to be tax resident.
- There are restrictions applying where the applicant has previously been resident or working in Gibraltar within the preceding 5 years.
- The individual must not undertake any business activities that compete with local entities that derive their income from within Gibraltar.
- Category 2 status is awarded on the decision of the Finance Centre Director.
Property in Gibraltar
The Gibraltar property market is buoyant. Current projects under construction or in the planning stage (of which there are over a dozen projects), have a combined market value of approximately £1.8 billion. In recent years, there has been a substantial increase in the number of projects, and in particular, the number of prestigious developments such as the Ocean Village development. Property purchases attract a Stamp Duty charge, but there is no Capital Gains Tax regime and hence no Capital Gains Tax on sale.
As a guideline, Category 2 approved property will cost a purchaser from @ £350,000, or a tenant from @ £2,500 p/m.
Accessibility
Gibraltar services flights from the UK only. British Airways fly to/from Heathrow and Gatwick and Monarch fly to/from Luton.
Malaga airport is 1½ hours drive east from the Spanish border and services most main countries. Jerez airport is a similarly timed drive west from the border and is beginning to service most main countries.
The Economy in Gibraltar
In addition to the successful tourist, shipping and construction trades, the Financial Services sector is a key pillar of Gibraltar's economy. Gibraltar, as an International Financial Services centre, has seen this sector of the economy grow rapidly in recent years. With the Government's commitment to making Gibraltar an attractive base from which to do business internationally, it is anticipated that this sector will continue to flourish. In addition, the Government's encouragement of e-business has been reflected in growth in the technology sector, with a number of large betting and gaming companies taking advantage of the favorable fiscal environment and high quality telecommunications infrastructure.
How We Can Help
P&O Homes is pleased to recommend top accountants and company administrators, companies who can assist with all matters relating to obtaining of Category 2 residency in Gibraltar.
Companies that have access to a worldwide team of private client tax experts who can be called upon to provide an integral solution.
They can assist with all matters relating to the obtaining of Category 2 Residency in Gibraltar and maximizing its benefits including, but not limited to, the following:
The Application Process
- Introductions to banks and lawyers.
- Preparation and submission of application.
- Liaison with the Finance Centre.
- Obtaining of Gibraltar civil registration card.
- Preparation of Gibraltar income tax return and other compliance matters.
Asset and Wealth Management
- Review of income and assets for tax efficiency.
- Restructuring of wealth to take into account preferential tax status.
- Creation and management of offshore trusts and companies.
- Transferring of pension rights accrued overseas to Gibraltar.
Administration
- Payment of utility bills and other local expenses.
- Dealing with any day to day office administration required.
Summary of the benefits
- No capital taxes including wealth tax, inheritance tax and gifts tax.
- No sales taxes.
- Lump sum £20,000 annual tax payment for Category 2 residents.
- No minimum presence required.
- Good economy and infrastructure.
- Warm climate.
- Well positioned to the Costa del Sol.
- Vibrant housing market.
Data supplied by PO Homes - Gibraltar
|
![]() |
