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Residence

Introduction

In practice, one of the most-effective tax-planning strategies is to move to a low-tax jurisdiction like Gibraltar. In Gibraltar you can enjoy a Mediterranean life-style in a British jurisdiction with thriving business and financial services sector coupled with low taxes. We can apply for residence for you and your family under our low tax regimes.

Category 2 Status is a low tax regime for High Net Worth Individuals and their families.

HEPSS (Higher Executives Possessing Specialist Skills) is designed to cap the taxes paid by a person with special skills in order to attract talent to Gibraltar.

This page provides information on:

  • Gibraltar Lifestyle & Immigration;
  • Low Tax Residence (Category 2 Status);
  • Low Tax Residence (HEPSS); and
  • Ordinary Residence.

Gibraltar Lifestyle & Immigration

Lifestyle

Gibraltar has a thriving and diverse economy. It is built on four distinct sectors: financial services, shipping, tourism and e-gaming. Gibraltar’s prosperous economy has proven to be strong and robust with our gross domestic product steadily growing year on year.

Gibraltar offers a vibrant property market with an excellent choice of high-quality housing. Gibraltar provides diverse marina facilities capable of berthing large luxury yachts. It is a Mediterranean territory and as such enjoys excellent weather and lifestyle.

Gibraltarians are enterprising and hardworking and have perfected a happy balance between industrious activity and leisurely enjoyment of life. Highest quality accommodation is available both for purchase and rental. All the commercial and business facilities and high-quality professional services which may be required also exist.

Gibraltar is a pleasant and safe place to live. Within a couple of hours’ drive in Spain, there are many attractive places to visit and spend time such as Marbella, Seville, the Sierra Nevada ski resort (next Granada) and the beautiful white sandy beaches of the Tarifa area and the south-west coast of the province of Cadiz.

An excellent quality of life can be enjoyed in Gibraltar which makes it an ideal place for families to relocate to. We have an English education system with our students all being entitled to attend UK universities.

Immigration

Gibraltar is a self-governing British Overseas Territory. We have our own Parliament and pass all of our own laws. Under our constitutional arrangements with the UK, they remain responsible for our foreign affairs and defence.

We fully control our own immigration policy and do not follow criteria set by the UK.

UK, EU and EEA nationals are all permitted to enter Gibraltar upon production of a valid national identity card or passport issued by such a State. A family member is also admitted into Gibraltar on the same basis. Such nationals are also permitted to reside in Gibraltar and cross the land frontier into Spain.

US, Canadian, Australian and several South American nationals do not require a visa to enter Gibraltar. Other nationals can check visa entry requirement on the website of the Borders and Coast Guard Agency: http://www.gibraltarborder.gi.

We were a part of the EU but left with the UK following Brexit. The UK are in the process of negotiating a Brexit treaty with the EU in respect of Gibraltar. This is expected to be finalised within the next weeks or months.

The principal aim of the Treaty is to allow Gibraltar residents free access to the Schengen zone via the land frontier with Spain. The frontier would, in effect, disappear and it is expected that Gibraltar residents, regardless of nationality, would have free movement throughout the whole of the Schengen zone. The details in this regard are expected to emerge in the next few weeks and months.

Low Tax Residence in Gibraltar – Category 2 Status

In Gibraltar this form of tax residence is popularly known as Category 2 Status.

Upon being granted Category 2 tax status, applicants will be issued with a tax ID number and they will pay a relatively low amount of tax on their worldwide income in Gibraltar. This can assist persons who have left, or are leaving, a higher tax jurisdiction in proving that they are tax resident in Gibraltar and are paying their taxes here.

To qualify for Category 2 Status applicants must establish two main things: (1) ownership of assets, which can include property and shares, worth in excess of £2 Million and (2) having approved residential accommodation in Gibraltar for their exclusive use.

Taxation ranges between a minimum of £37,000 and a maximum of £44,740 per annum.

Category 2 Application Procedure

The following documents must be produced:

  1. Documentation showing net wealth in excess of £2 Million.
  2. A character reference from a bank and a second one from a lawyer, accountant or from another bank.
  3. A CV documenting the applicant’s source of wealth.
  4. An application form, which we will provide, together with payment of a non-refundable application fee of £1,100 payable to the Gibraltar Government.

Upon making the application, a start date for the Category 2 Status can be chosen. This can be as from the date of the application or later.

The applicant will also need to confirm whether they will be carrying on business from Gibraltar. This is permitted provided that it will not be in competition with other local businesses conducting similar activities. Approval to carry on business from Gibraltar is required from the Finance Centre Director.

Proof of Wealth

Bank statements or letters from a bank manager or accountant are acceptable as proof of wealth. Non-monetary assets such as shares and property are acceptable upon production of suitable documentary evidence such as an accountant’s valuation or surveyor’s report.

Most applicants either produce a bank statement/portfolio valuation or a letter from their accountants which details their net wealth.

Approved Property

A residential property approved by the Finance Centre Director must be purchased or rented within two months of being granted Category 2 Status.

Spouses & Children

There is provision in the law to allow spouses and children (under 18 or in full time education) to be granted Category 2 Status under the same certificate as the principal applicant.

A spouse can also elect for their income to be considered a part of the applicant’s and this can be declared in the same tax return.

Taxation

The amount of tax payable to the Gibraltar Government currently ranges between a minimum of £37,000 and a maximum of £44,740 per annum. The precise amount of tax will depend upon: (a) how much money is remitted to the applicant in Gibraltar and (b) the amount of taxable income earned by the applicant within Gibraltar in each financial year. Payment of the tax is due on 1st November in each year.

Upon being approved, applicants must pay a deposit of £44,740 as a guarantee for future payments of tax. Upon relinquishing Category 2 Status (and provided that no tax is outstanding), the Gibraltar Government will return this sum.

The tax year runs from 1st July to 30th June. A return needs to be filed annually with the local Income Tax Authorities.

Application for Gibraltar Civilian Registration Card

A Gibraltar Civilian Registration Card (the “CRD”) can be issued to persons holding Category 2 Status and their families. This is useful as it provides evidence of residence in Gibraltar. Residency permits are also issued in tandem with the CRD.

Once the applicant has rented or purchased a suitable property in Gibraltar, they can apply for their CRD. A copy of the rental agreement or title deeds together with private medical insurance will be required.

The private medical insurance must cover the applicant (as well as any other members of their family moving to Gibraltar) for all risks in Gibraltar and the neighbouring Spanish hinterland.

Low Tax Residence – HEPSS

HEPSS (Higher Executives Possessing Specialist Skills) is designed to cap the taxes paid by a person with special skills in order to attract talent to Gibraltar.

HEPPS status allows specialist skilled workers who earn more than £160,000 per annum to have an attractive fiscal status in Gibraltar. The company which employs the individual needs to make the application and, upon it being successful, the individual will be able to limit their tax liability to the first £160,000 only. In practice this currently amounts to just over £43,000 per annum. The HEPSS individual will not pay tax on any remuneration over and above the £160,000 paid by the employer.

The requirements are somewhat similar to applying for Category 2 Status and we can advise on and guide applicants through the process.

Ordinary Residence

Application for residency

In order for a person to attain residency they must satisfy the Gibraltar authorities that they are of good character and that granting them residence is in the interests of Gibraltar. The application should be directed to the Civil Status and Registration Office. The vast majority of applications for residence by EEA nationals are accepted.

Residency requirements

The Immigration, Asylum and Refugee Act provides details on the fundamental requirements which need to be fulfilled for the issue of such a residency permit. In addition, the Government of Gibraltar has issued guidelines highlighting factors which are of most importance in considering applications for residency. These can be summarised as follows:

  • Suitable accommodation is held. This can be achieved by the purchase or rental of a property sufficient in size to accommodate the applicant and all their family for residential purposes;
  • The applicant must establish that they are in good health;
  • The applicant must establish that they have adequate financial resources to maintain themselves and their family without recourse to Gibraltar public funds.

In order for the applicant to prove the latter requirement, applicants need to provide evidence that their status falls under any of the following categories:

  • jobseeker;
  • worker;
  • self-employed; or
  • self-sufficient (which includes Category 2 Individuals)
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Any questions?

We have an approachable team who will be happy to help you.