Personal income tax
Individuals are taxed under one of two systems, whichever is most advantageous. No tax is payable where assessable income is £11,000 or less.
(i) Gross Income Based System (GIB)
Tax is calculated on gross assessable income:
First £17,000* 16%
£17,001 to £25,000* 19%
£25,001 to £40,000 25%
£40,001 to £105,000 28%
£105,001 to £500,000 25%
£500,001 to £700,000 18%
* Individuals with gross assessable income not exceeding £25,000 pay at 6% on the first £10,000, 20% on the next £7,000 and the balance at 28%.
*Deductions are available for medical insurance, pensions and home purchase.
(ii) Allowances Based System (ABS)
Tax is calculated on net taxable income*:
First £4,000 14%
Next £12,000 17%
Over £16,000 39%
* Tapering relief is available for income between £11,001 to £19,500.
* A tax credit of £300, or 2% of the resultant tax liability (whichever is greater) is then applied.
Special tax status for individuals
Available for applicants satisfying eligibility criteria. Includes rental or purchase of an approved residential property.
(i) High Net Worth Individuals (Category 2)
Persons with net wealth of £2M+ can apply to pay tax only on their first £80,000 of taxable income, equivalent to an annual liability of £27,000, but subject to a minimum of £22,000.
Notice: This note provides general information on the Gibraltar tax system which may be of interest. It is not intended to be comprehensive and should not be construed as professional advice.
(ii) High Executive Possessing Specialist Skills status (“HEPSS”)
Relocating executives with relevant skills pay tax only on the first £120,000 of their assessable income (maximum tax £29,940). A minimum salary of £100,000 is required.
It is possible to transfer a UK pension to Gibraltar under QROPS rules. A tax free pension commencement lump sum of up to 30% is available. Income drawdowns are taxed at 2.5%.
As well as a favourable income tax regime, Gibraltar has no taxes on:
Savings income (dividends and interest).
Royalties and capital gains.
Wealth, gifts, estates and inheritance.
Sales (e.g. VAT).
Stamp duty on real estate
Purchase Price Rate
To £200,000 Nil
From £200,001 2.0% on first £250,000
to £350,000 5.5% on balance
Over £350,000 3.0% on first £350,000
3.5% on balance
No stamp duty is payable by first and second time buyers on the first £260,000 of the purchase cost.
Company income tax
Charged at 10% on income which is “accrued in or derived from” Gibraltar.
There are no withholding taxes on the payment of dividends. Interest paid between connected companies is taxable where the recipient is a Gibraltar company and the amount is £100,000 or more per annum. Royalty income received by a Gibraltar company is subject to tax.
Information provided by: Almanac Limited, 30/2 Cornwall’s Lane, Gibraltar T: +350 200 42250 E: firstname.lastname@example.org www.almanac.gi