Non-resident landlord tax
Non-resident landlords of Gibraltar property are individuals who reside outside of Gibraltar and rent out a property in Gibraltar. Tax is charged on income of all individuals in respect of rents, premiums and any other interest in property located in Gibraltar.
The individual must register at the Income Tax Office using Form S4 and receive a taxpayer identification number. A tax return must be submitted together with an income and expenditure account for the tax year ended 30th June by 30th November latest in the same year.
Initially, the landlord should pay any taxes by the first filing deadline of 30th November. Thereafter, payments on account are due by the following 31st January and 30th June based on 50% of the previous year’s tax liability. Penalties are charged for late filing and late payments.
For non-resident individuals, the first £16,000 of taxable income is charged at 17% with the remaining balance at 39%.
Deductions for expenses are only allowed if they are wholly and exclusively expended for the purpose of the property rental and are revenue rather than capital expenses. Capital expenditure generally relates to buying, improving or selling the property and is not normally allowable, although expenditure on painting, decorating, repairing or enhancing the appearance of the property can be an allowable expense if certified by the Town Planner.
Common types of revenue expenses paid by the landlord that can generally be deducted are:
1. Rates and service charges;
2. General maintenance and repairs to the property;
3. Interest on a mortgage to buy the property; and
4. Letting agent and management fees.
Yes, equipment, fittings and furniture used inside a residential property do qualify for capital allowances in Gibraltar. This can provide a significant deduction against income. The assets which may be eligible for capital allowances include all the furniture used in the property as well as non fixed soft furnishings and white goods. Generally, this means that 100% of the cost of such purchases can be deducted in the year of purchase up to a limit of £30,000 and for any excess a 20% annual writing down allowance.
Yes, our property management systems are fully endorsed by the Institute of Chartered Accountants in England & Wales. Our landlord statements provide a full summary of income and expenditure between any two dates. We maintain these records for you at no extra cost where you choose to rent your Gibraltar property with us.
Then, should you wish to use the services of our joint venture company Buckingham Corporate Services, they can manage the Gibraltar tax affairs for Gibraltar’s resident and non-resident landlords alike.
Buckingham Corporate Services (BCS) manages the Gibraltar tax affairs for many of Gibraltar’s resident and non-resident landlords. Specifically, BCS manages all the necessary tax compliance paperwork for you.
1. Registration for income tax and obtaining Taxpayer Identification Numbers;
2. Annual tax return preparation & filing;
3. Agreement of the tax assessment with Income Tax Office based on the tax return, including appealing the assessment if necessary;
4. Routine correspondences with the Income Tax Office as and when required;
5. Advising you of the tax payments required and provision of the remittance advice form for submission to the authorities when you make a tax payment. We can also facilitate tax payments via our client account where payment receipts will be emailed to you.
There is a one-time fixed fee of £125 for dealing with the tax office registration matters for all clients. The annual fees thereafter per tax year are:
|Taxpayer Type||Annual Fee (from)||Chestertons' Clients (from)||Payable|
|Individual||£500 per tax year||£400||On completion of tax return preparation|
|Joint (x2 individuals)||£625 per tax year||£500||On completion of tax return preparation|
|Client Account use||£35 per account||£35||At time of payment|
Gibraltar tax advisory services can also be provided and subject to separate fee agreement.
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