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Loading ...GIBRALTAR - TAX HAVEN
Posted by Roy
The purpose of this article is to provide an overview of Gibraltar’s tax policies. These are complex and we strongly recommend that you seek the advice, specific to your personal circumstances, from a financial advisor.
As regards Residency, Gibraltarians and UK citizens have the right to enter, live and work, as do EU citizens. The latter require an initial visa for 6 months, followed by a 5-year residence permit. Non-EU nationals are required to purchase or rent a property, have good health and be financially secure.
The good news is that there is no Capital Gains Tax, Inheritance Tax, Sales Tax or VAT. No tax is payable on business profits earned abroad and not remitted to Gibraltar The not so good news is, unlike other tax havens, one is liable for tax on one’s worldwide income (except for one category of taxpayer which I will mention later)
There are several tax systems and I intend to deal with only one in detail and mention one other which I feel are the most relevant. The “Allowance Based System” is probably the one most familiar to our readers. Income tax is payable on all income accruing in, derived from or received in Gibraltar. In addition all pensions and dividends received in another country are taxed in Gibraltar, unless tax is paid and they are not remitted to Gibraltar. Income tax is charged, by bands, as follows:
GBP 0-4000 17%
GBP 4001-12000 30%
GBP 12001+ 40%
These are 2007 figures but remember they are subject to change
Fear not!! There are generous allowances which are deductible and will determine your taxable income. These include:
Personal Allowance
Spouse Allowance
Personal Allowance Over 65
Married Couple Allowance Over 65
Disabled or Blind
First Child Allowance
Life Insurance
Health Insurance - limited to GBP 1060
Mortgage Interest Relief ( I can still remember when the UK allowed this)
The only other category I will mention is the one intended to attract wealthy individuals to establish residence in Gibraltar. This is known as Category 2 or HNWI (High Net Worth Individuals) and to obtain a permit requires:
No residence in Gibraltar for previous 5 years
Own or rent a property
Residence available in the territory for 7 months per year
Sufficient financial means (I have seen GBP 2,000,000 mentioned!)
Not to engage in business
Health Insurance.
With no income in Gibraltar, income tax would be capped at GBP 18000 per annum. This is based on an assessed, total income of GBP 60000 any income, worldwide, in excess of this figure is exempt tax
Well, perhaps not too applicable to most of us but we are talking about tax havens.
My own reaction to all this, is that Gibraltar is perhaps not in the top league of tax havens such as Panama and Costa Rica, unless you are very wealthy but it remains a very pleasant place to consider and I leave you to form your own opinion about Gibraltar
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