Category 2 status in Gibraltar

Update – June 2026

The criteria anticipated in this article have now been published. Read our full analysis of the new residence rules: New Gibraltar Residence Criteria (2026).

—

Gibraltar is conveniently located at the southern tip of the Iberian Peninsula and combines the Mediterranean climate and lifestyle with a leading international finance centre. This advanced, diverse economy, which at its core ensures legal and regulatory certainty, offers many benefits to businesses and high net worth individuals alike, alongside the following headline fiscal advantages:

corporate tax is levied at a flat rate of 15%

personal income tax is charged at a maximum effective rate of 25% on the first £500,000 of income

Gibraltar does not levy any capital gains tax, inheritance tax or tax on passive income, subject to conditions as regards non-Gibraltarian Gibraltar residents.

specific programmes designed to meet the needs of high net worth individuals and their families as well as high executives possessing specialist skills (HEPSS).

One such specific programme is “Category 2”. High net worth individuals from around the globe have access to a status which is achieved by fulfilling a series of requirements under the Qualifying (Category 2) Individual Rules 2004 and which we will summarise here.

Most key to note at the outset is that it is not a requirement for “Cat 2s” to physically reside in Gibraltar. Many do however choose to do so in order to benefit from the full range of fiscal benefits available to Gibraltar residents. This is especially so given that the UK and EU have recently reached agreement on the text of a treaty governing Gibraltar’s future relationship with the EU. Once this treaty is finalised and brought into force, Gibraltar is expected to enjoy seamless movement across the land border with Spain, with the territory forming part of a common travel area with the Schengen zone. In practice, this will give Gibraltar residents the ability to move freely throughout the Schengen Area without routine passport control at the frontier, greatly improving cross-border fluidity for work, leisure and business travel. This enhanced mobility will be one additional and significant lifestyle benefit for Category 2 residents, adding to Gibraltar’s appeal as a base in Southern Europe.

The criteria published in June 2026 for ordinary residence in Gibraltar, including the salary and age requirements that apply to employed applicants, are separate from Category 2 status and do not change the basis on which Category 2 individuals qualify. For how the two regimes interact, see our analysis of the new residence criteria: New Gibraltar Residence Criteria (2026).

What is a Category 2 individual?

A Category 2 Individual is an individual qualifying for a special tax status designed for high net worth individuals as a means of limiting their potential taxable liability.
As of 2025/2026, as a Category 2 Individual, you will only be taxed on the first £118,000 of your worldwide taxable income, irrespective of how much your income actually is. Maximum tax payable currenty is £42,380.
A Category 2 Individual’s minimum annual tax payable is £37,000, or £3,083.33 for each complete month or part month for which the certificate is in force.
Being in possession of a Category 2 Individual certificate does not shield any individual from becoming tax resident in a different country.
A refundable deposit of £42,380 is payable on application and refunded when the status is relinquished.

What are the requirements and/or restrictions to obtaining Category 2 status?

Following the changes announced by the Government on 18 June 2026, a new applicant must have an estimated total net worth in excess of £5 million, and will need to produce evidence of this during the application. Existing Category 2 individuals are fully grandfathered and are not affected by the increased net worth requirement.

Category 2 Individuals must not have been resident in Gibraltar during the five years immediately preceding the year of assessment. Previous residency includes 183 days in any tax year during the previous 5 years or an average of 90 days in any three of the previous 5 years.

Category 2 individuals must have, for the exclusive use of themselves/their family, approved residential accommodation in Gibraltar for the whole year of assessment (the accommodation can be either purchased or rented). “Exclusive use” includes family and friends and occasional non-paying guests. Individuals must not however rent or lease the property to any third party.

Details of the property acquired or rented must be forwarded to the Finance Centre Director within two months of the issue of the Qualifying Certificate. The Finance Centre Director may decide whether or not a property is an approved property. This usually consists of verifying that the size and type of property is consistent with the size and makeup of the Applicant’s family and the Applicant’s status as a Qualifying Individual.

There is no specific legal requirement as regards to the length of stay in any particular year and the spouse or child of a Category 2 Individual may elect to benefit from the terms of the same certificate. With this being said, tax residence is a complex matter and advice should be taken in all relevant jurisdictions.

Category 2 Individuals may engage in any trade, business or employment in Gibraltar where the Finance Centre Director is satisfied that the exercise of such trade, business of employment would be of benefit to the economic development of Gibraltar.

What does the process of obtaining Category 2 status consist of?

The process for obtaining residency differs depending on whether the CAT2 individual is an EU National or not. Applications, which carry a non-refundable fee of £5,000 following the changes announced on 18 June 2026, should be made, usually via your legal representative, to the Gibraltar Finance Centre Director and must include::

A copy of your CV
A certified copy of your passport
Evidence that you have an estimated total net worth in excess of £5 million (for new applicants, following the changes announced on 18 June 2026)
Evidence that you hold suitable private medical insurance cover
Two character references – one must be from a banker certifying your good character
Proof that you have (or are in the process of obtaining) “approved residential accommodation.

Applicants will usually be informed that the application has been successful within one or two weeks of the application being made.

Two further points follow from the changes announced on 18 June 2026. Category 2 status does not confer any entitlement to publicly funded schooling or healthcare in Gibraltar. A person who does not maintain their Category 2 status will not have a right to continue to be resident in Gibraltar.

Is there a wealth tax in Gibraltar?