Category 2 status in Gibraltar

• 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 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 £44,740.
• 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.

• In order to qualify as a Category 2 Individual, potential applicants must have at least an estimated total net worth in excess of £2million. Potential applicants will then need to produce evidence of this during their application.

• 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 him/herself and his/her 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.

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 £1000, 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 £2million
• 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.

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