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Tax information Introduction
The assessment and collection of income tax is currently governed by the Income Tax Act 2010, Rules and Regulations. That act was enacted in 2010 and came into effect on 1st January 2011. Tax is charged on income accruing in or derived from Gibraltar, on the profits or gains of a company or trust from any trade, business, profession or vocation. Tax is charged on the income accruing in, derived from or received in Gibraltar (or in any other place) by an individual ordinarily resident in Gibraltar from employment or the exercise of any self-employment activities in connection with a trade, business, profession or vocation. Dividends, pensions and emoluments of office accruing in, derived from or received in any place other than Gibraltar by an ordinarily resident individual are also taxable in Gibraltar. Generally, when taxed in the country of accrual and not received in Gibraltar such income is not taxable in Gibraltar. Tax is charged on income of all individuals and companies in respect of any rents, premiums and any other interest in real property located in Gibraltar. Income arising outside Gibraltar, which although not actually received or transferred, is obtained in Gibraltar by an individual in the form of an equivalent benefit, is treated as having been received in Gibraltar.
Life Assurance etc.
This deduction is given in respect of amounts payable by the taxpayer or his spouse or civil partner during the year of assessment for insurance premiums on his life or that of his spouse and for contributions to a pension scheme approved by the Commissioner of Income Tax. No deduction shall, for any year of assessment exceed; – one-seventh of the total assessable income in respect of life assurance premiums; – the lesser of 20% of the earned assessable income or £35,000, in respect of contributions to a Personal Pension Scheme or a Retirement Annuity Contract; – one-sixth of the total assessable income in respect of contributions to an Occupational Pension Scheme, and – 7% of the capital sum excluding bonuses, etc, in the case of a policy securing a capital sum on death.
Personal Income Tax
Individuals are taxed under one of two systems, whichever is most advantageous. No tax is payable where assessable income is £11,450 or less.
(i) Gross Income Based System (GIB)
Tax is calculated on gross assessable income*:
|£17,001 to £25,000*||21%|
|£25,001 to £40,000||27%|
|£40,001 to £105,000||30%|
*Individuals with gross assessable income not exceeding £25,000 pay at 8% on the first £10,000, 22% on the next £7,000 and the balance at 30%. Deductions are available for medical insurance, pension contributions and home purchase etc.
(ii) Allowances Based System (ABS)
Tax is calculated on net taxable income (subject to some tapering relief for income below £19,500):
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 £118,000 of taxable income, equivalent to an annual liability of approximately £44,740, but subject to a minimum of £37,000. The full year liability must be paid annually on 30 November in the tax year to 30 June.
(ii) High Executive Possessing Specialist Skills status (“HEPSS”)
Relocating executives with relevant skills pay tax only on the first £160,000 of their earned income (maximum tax £43,140).
Non-resident landlords who are individuals pay 19% tax on the first £16,000 of net rental income and 41% thereafter. Capital allowances are available.
Company Income Tax
Charged at 12.5% 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 also taxable.
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)
QROPS (UK Pension Transfer)
A tax-free pension commencement lump sum of up to 30%. Income drawdowns taxed at 2.5%.
Information provided by: Athena Ventures Limited, 30/1 Cornwall’s Lane, P.O. Box 1451, Gibraltar
T: 350 200 42250 Email: [email protected] www.athena.gi