Category 2 Individuals (Previously Known As High Net Worth Individuals) And Residency

There has been a continuous increase in the demand for Category 2 status, as a result of the Government of Gibraltar’s low tax limits offered to encourage high net worth individuals to establish a residence in Gibraltar.

BENEFITS

The benefits of the Category 2 status and residency in Gibraltar are attractive for individuals from countries where levels of personal income tax are particularly high, such as Britain, Germany, Canada, Switzerland and France.

A Category 2 Individual will have their Gibraltar tax capped to the maximum calculated on the first £80,000 of assessable income, with a minimum tax payable per annum of £22,000 and a maximum of £27,560.

REQUIREMENTS FOR APPLICATION

ISOLAS will guide you through the requirements for Category 2 status, one of which approved residential accommodation in Gibraltar for the whole of the tax year of assessment (1st July to 30th June). There are particular property developments within Gibraltar which have been identified by the Finance Centre Director as being suitable for these purposes.

RATES OF TAX ON ASSESSABLE INCOME

The maximum amount of Category 2 tax payable for the tax year 01.07.2015 to 30.06.2016 is £27,560 as set out below:

Category 2 tax rates in Gibraltar

There are no allowances or deductions. Tax is payable only up to the maximum assessable income of £80,000. Any assessable income in excess of £80,000 is not subject to tax in Gibraltar.

OTHER FINANCIAL INCOME

The Category 2 individual pays a minimum annual tax of £22,000 which equates to the tax on income of £65,744 in the financial year 2015/2016 after which only further amounts remitted to Gibraltar suffer further taxation but the maximum tax payable in the year is capped at £27,560.

ADVANTAGES OF BECOMING A RESIDENT IN GIBRALTAR

• Income tax is only payable on earned or remitted income such as employment income (including benefits in kind), trading income (rental income, consultancy) and dividends from private companies;

• Rental income from a foreign source is not taxable in Gibraltar;

• No Inheritance Tax;

• No Wealth Tax;

• No Capital Gains Tax;

• No Gift Tax;

• No VAT;

• No taxation on savings interest/ investment income (paid by banks & building societies);

• No taxation on dividend income arising from companies quoted on a recognised stock exchange; and

• No taxation on pension income from an approved occupational scheme for individuals aged 60 or over.

PROPERTY AND CONVEYANCING IN GIBRALTAR

ISOLAS boasts a wealth of experience in dealing with residential properties as a result of representing numerous clients in purchasing and selling properties throughout Gibraltar, ranging from low-cost housing projects through to high-end luxury accommodation.

Clients are provided with a professional and efficient service which will ensure that their transaction proceeds as smoothly as possible from the initial stages until completion.

For further information on Gibraltar residency or property matters, contact Sarah Miles on sarah.miles@isolas.gi.