High Net Worth Individuals
Gibraltar offers special tax concessions to High Net Worth Individuals who want to establish residence in Gibraltar.
These individuals are able to register as Category 2 Individuals under Gibraltar's Qualifying (Category 2) Individual Rules 2004.
Category 2 Individuals
Category 2 Individuals are only taxed on the first £80,000 of income remitted to Gibraltar, with a minimum tax payable of £22,000. The maximum tax payable if the full £80,000 is remitted to Gibraltar would currently be £29,080. Only income actually received in Gibraltar is subject to tax, although an individual may elect for all their worldwide income to be taxable in Gibraltar.
As well as paying a capped amount of tax on all their worldwide income, or remitted income, the Category 2 Individual can also benefit from electing that the income of his or her spouse or any child under the age of 18 or in full time education to be deemed as their own income for the purposes of taxation.
In order to qualify for this unique tax status the prospective applicant must satisfy the Finance Centre in Gibraltar that he or she has net assets in excess of £2 million. It is also a requirement that the applicant has not been present in Gibraltar for an extended period of time during the last five years or has engaged in any trade, business or employment in Gibraltar within the aforementioned period.
The successful applicant will also have to find what is deemed by the Category 2 Rules as "Approved Residential Accommodation". This must be of high standard and available to the applicant exclusively, throughout the year, therefore the property can be rented or purchased. To the Category 2 Individual's advantage, there is no requirement dictating the number of days that the applicant need to spend in Gibraltar.
The Category 2 status can be an attractive option to individuals who are looking to relocate; who are mobile and are not resident anywhere; those who carry out their business regardless of location; those who are expecting a large windfall and individuals who need a "stepping stone" whilst reorganizing themselves for a move to a different location. In a nutshell a Category 2 can perform most activities provided they are not in direct competition with a Gibraltar resident.
The High Executive Possessing Specialist Skills ("HEPSS") status is available for individuals with specialist skills of exceptional economic value to Gibraltar. A HEPSS certificate will be granted to a company for individuals who will occupy a high executive or senior management position, earn in excess of £100,000 per annum and satisfy the Government that they possess skills which are important for the economic development of Gibraltar and are skills that are not available in Gibraltar.
Apart from the above conditions, the company must also satisfy the Gibraltar Government that the individual for which they are requesting a HEPSS status has not been a resident in Gibraltar for any part of the period of three years immediately preceding the year in which the application is made. The individual obtaining the HPSS status is required to buy or rent accommodation of a high standard which is available to him for his exclusive use, all year round.
Irrespective of the HEPSS' annual income, tax will be capped to the first £120,000 and taxed under the Gross Income Based system. Currently this results in an annual tax liability of £29,940.