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Category 2 Tax Residency - Introduction

Gibraltar has its own Government and is therefore able to raise its own taxes, (with the UK responsible for foreign affairs, security and defense). It became a British overseas territory in 2002 under the British Overseas Territory Act 2002.

Gibraltar is a modern International Financial Centre which (through the UK) is within the EU and benefits from EU directives making it an attractive location for cross border investment. Gibraltar also benefits from being able to passport services into other EU states making it a popular location for businesses to have their headquarters. In addition, Gibraltar is deemed a "white" listed territory by the OECD as it has signed sufficient tax information exchange agreements.

Category 2 Gibraltar Tax Residency–The Attraction For High Net Worth Individuals

Category 2 tax residents have their tax capped at a maximum of approximately £ 30,000 per annum. This capped amount is calculated based on a total income of £ 80,000.

An application is made to the Finance Centre Director for the issue of a certificate under the Qualifying (Category 2) Individual Rules under the Income Tax Ordinance. A £ 1000.00 non-refundable application fee is payable and the application must be supported by two character references from recognised and established professionals (one must be from a bank and the other from a law or accountancy firm) a copy of his or her passport and a curriculum vitae.


 

In order for an individual to qualify for Category 2 status approved residential accommodation must be made available for their exclusive use in Gibraltar throughout the year.

The Category 2 individual is not allowed to engage in a trade, business or employment in Gibraltar. There is no minimum stay in Gibraltar for a Category 2 resident individual; therefore as long as the individual fulfills all of the above conditions he will retain his Gibraltar residency without the need to spend any time in Gibraltar.

A form describing the property must be submitted for approval to the Finance Centre Director within two months of the issue of the certificate. Century 21 Gibraltar will undertake this service for all of our clients at no cost and will always ensure that the said property has been approved for the relevant status prior to them entering into any agreement to purchase or rental contract.

 

Higher Executive Possessing Special Skills status ("HEPSS")

This is a new status, which is aimed at relocating executives with specialist skills earning in excess of £ 100,000 per annum. HEPSS individuals will pay tax only on the first £ 120,000 of earnings and they can choose between the Allowance Based or Gross Income Based system.

The applicant is required to either rent or purchase a property, similar to those of Category 2 residents, in Gibraltar which is to be made available for his or her exclusive use throughout the year.

A form describing the property must be submitted for approval to the Finance Centre Director within two months of the issue of the certificate. Century 21 Gibraltar will undertake this service for all of our clients at no cost and will always ensure that the said property has been approved for the relevant status prior to them entering into any agreement to purchase or rental contract.



Tax liability of Gibraltar tax resident companies

"Ordinarily resident " companies are liable to tax at a flat rate of 10%.

VAT - INHERITANCE TAX - DEATH DUTIES - WEALTH TAX & CAPITAL GAINS TAX

There is no VAT or sales tax in Gibraltar. Furthermore, there is no Inheritance Tax, Death Duties, Wealth Tax or Capital Gains Tax payable in Gibraltar.

 


Stamp Duty

Property Purchase Price

Stamp Duty Rate

upto £200,000

Zero

from £200,001 to £350,000

2% on first £250,000
5.5 % on the balance

Over £350,000

3.0% on first £350,000
3.5% on balance

 

 

 

 

 

 

 

 

 



 

 
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