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Gibraltar Residency

Gibraltar is fast becoming a favoured jurisdiction for high net worth individuals and businesses that are looking for a legitimate way to lower their tax bill in a properly regulated financial environment. Having signed more than 20 TIEAS and been white listed by the OECD, Gibraltar has completed a fourteen year transition from offshore tax haven to a mainstream leading European financial services centre.

Gibraltar offers compelling tax planning advantages for businesses and high net worth individuals considering a new country of residence. Whether this is for personal tax restructuring, estate planning or simply for a change of lifestyle there are significant benefits to being tax resident in Gibraltar.

Businesses pay a flat rate of corporation tax which is set at 10% whilst being able to operate in a country that is within the EU, with English as its official language and modelled on the English legal system. Despite being an integral part of the EU Gibraltar has the added advantage of being outside of the VAT (value added tax) zone.

For high net worth individuals there are two distinct options available for Gibraltar tax residency “category 2” and “self-sufficiency” and both offer tremendous tax advantages.

CATEGORY 2

Who should consider applying for “Cat 2” Gibraltar residency?


Individuals who are looking to protect either their trading or earned income from higher rates of taxation in their country of residence or where they declare their income.

The key conditions which must be fulfilled to obtain Category 2 Gibraltar residency status are as follows:

  • The Category 2 individual must be of substantial and sound financial standing and have a minimum net worth of £2 million.


  • The Category 2 resident must preferably own or rent approved residential accommodation in Gibraltar. The property must be approved by the Gibraltar Finance Centre and be used exclusively by the Category 2 individual and large enough to house direct family.


  • The Category 2 individual cannot have been resident in Gibraltar during the five years immediately proceeding the year of assessment.


  • The Category 2 individual is not allowed to engage in a trade, business or employment in Gibraltar unless it is in a sector or activity which is not in direct competition with a local business.


  • Category 2 status is granted on an indefinite basis, but the Category 2 residency certificates need to be sent to the Gibraltar Finance Centre for renewal every three years.


  • The Category 2 individual must have private medical insurance to cover them and their family in the event of illness in Gibraltar.


  • There is no minimum physical residence requirement in Gibraltar for a Category 2 resident.



How much tax will be paid?

Tax liability capped at £80,000 income with a minimum tax of £22,000 and a maximum of £28,440.


What are the benefits?

  • No Inheritance Tax

  • No Wealth Tax

  • No Capital Gains Tax

  • No Gift Tax

  • No taxation on interest savings

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

  • Flat rate of tax of 2.5% applied to pension drawdowns from a QROPS or QNUPS


SELF SUFFICIENCY


Who should consider Gibraltar tax residency on “Self Sufficiency” grounds?


Individuals who are in receipt of passive income.

The key conditions which must be fulfilled to obtain self-sufficiency residency status are as follows:

  • The self-sufficient individual must provide two references from a banker, lawyer or accountant confirming number of years known and of a good standing and repute.


  • The self-sufficient resident must provide a letter from the bank showing receipt of pension payments or a 3 month bank statement confirming income into Gibraltar in amounts that demonstrate the individual is able to support himself financially.


  • The self-sufficient individual (EU Nationals save for UK pensioners) who resides but does not work in Gibraltar whether by choice or necessity regardless of whether they are of pensionable age or not, will require private medical insurance for themselves and any dependants. More recently the waiver afforded to UK nationals to hold private medical insurance, we are told, is being assessed on a case by case basis.


  • The self-sufficient individual must provide evidence of having accommodation in Gibraltar i.e a property rental contract or title deed to a property.


How much tax will be paid?

There is no tax to be paid save for any earned income.


What are the benefits?

  • No Income Tax save for earned income.

  • No Inheritance Tax

  • No Wealth Tax

  • No Capital Gains Tax

  • No Gift Tax

  • No taxation on interest savings

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

  • Flat rate of tax of 2.5% applied to pension drawdowns from a QROPS or QNUPS.


HEPSS

The acronym HEPSS stands for “High Executive Possessing Specialist Skills.” The Gibraltar Government introduced HEPSS as an alternative Gibraltar residency tax status to attract executives with specialist skills to Gibraltar.


Who should consider becoming tax resident in Gibraltar as a HEPSS?

Executives or individuals who are looking to relocate to Gibraltar who possess specialist skills.

The key conditions which must be fulfilled to obtain HEPSS Gibraltar residency status are as follows:

  • Individuals must possess relevant skills not already present in Gibraltar which are deemed to be of exceptional economic value to Gibraltar.


  • Individuals must earn more than £120,000.


  • Individuals cannot have been resident in Gibraltar during the proceeding three years immediately after application.


  • Individuals must live in a Gibraltar qualifying property not too dissimilar to Gibraltar Category 2 residents.



How much tax will be paid?

Tax is capped at £120,000 of worldwide income under the Gross Income Based System (GIB)

What are the benefits?

Tax is capped at £29,940

At a time when governments around the world are increasing personal and indirect taxes to increase revenues, Gibraltar offers a refreshing and significantly less painful alternative.

At Fiduciary Wealth we provide a complete tax planning service to individuals and businesses looking to relocate to Gibraltar. With our in depth experience in cross border and expat financial planning issues and our ability to harness the skills of other professionals needed to complete the Gibraltar residency process ours is a true Gibraltar “one-stop shop” encompassing registration, property search, finance and insurance.

If you are looking for a new place of residency then Gibraltar could well be the right “address” for you or for your business.

Our residency division offers a complete service for those wishing to be considered for Gibraltar Residency in any category. Our advisers will handle the whole process from preparing the application to presenting the residency certificates.

For full information about Gibraltar residency options please visit www.gibraltarresidency.co.uk.

To discuss your Gibraltar residency options with a relocation specialist or for further information Tel: +350 200 50982 or email wealth@fiduciarywealth.eu.