Setting up a Family Office in Gibraltar

Setting up a family office is increasingly becoming a sine qua non for high net worth families, an indispensable component of the proper management of the family business and the family wealth.

As part of the proper planning of family governance structures, a family office provides the family with a focal point for all the activities of the family members. A family office provides services in relation to the structuring and management of family assets, the management and investment. Of the family’s wealth, coordinating legal advice and case management, managing day to day needs arising from what is invariably a significant and varied spread of assets and activities.

A family office will be a useful, and increasingly a key part of a high net worth family’s life for many practical, as well as structural reasons. From performing a central treasury function for family members to coordinating use of the family’s assets, including private cars, jets and yachts, it can be worth investing the time and effort to establish such an office at a relatively early stage. Having a central data and record keeping operation helps to make other aspects of managing a family’s wealth much more efficient.

Hassans have been assisting high net worth families with their family governance structuring for many years now and offer a more detailed insight into what family governance is on its decimated page: https://www.gibraltarlaw.com/expertise/private-client/family-governance/ .

As a full service, leading law firm, Hassans is able to offer the full range of relevant legal services to family offices. At Hassans, we understand and acknowledge that every family and its family business is unique, and we can assist in the establishment of a fully-resourced single family office specifically tailored to the needs of the family and it can provide services as required to established offices too.

Offering the full range of legal advice, company and trust structuring, HR, data and other regulatory compliance services, we are the best-placed one stop shop for family office services in Gibraltar. Our expertise extends to the establishment of the key family offices in Gibraltar for some of the most high profile clients the jurisdiction has seen and which are responsible for multi-million pound investments in Gibraltar.

The full range of relevant services we provide are:

Tax in Gibraltar

For a full and detailed insight into tax in Gibraltar, please visit our Gibraltar Tax Information page – the key headlines, however, are:

Is Gibraltar a Tax Haven?

No. Gibraltar is a specialist onshore finance centre which has, for many years now, complied with all its international obligations on compliance and tax information exchange. Gibraltar is an OECD white-listed jurisdiction which, in addition, was deemed ‘largely compliant’ by the OECD Global Forum in the latest Peer Review of tax information exchange carried out by a team of expert assessors from the Forum. This places Gibraltar on a par with the USA, Germany, the UK and Spain. The review included an on-site visit to Gibraltar by a Global Forum assessment team in 2019. Further information on this can be viewed here. In addition to the international obligations, Gibraltar was and will remain fully compliant with all relevant European Directives on financial services despite its departure from the EU. Gibraltar, its government and the professional fraternity, remains committed to the adoption and implementation of the highest standards of regulation in financial services, as it has always done, and will continue to do so post-Brexit.

Is Gibraltar tax free?

Gibraltar is not a ‘no-tax’ jurisdiction – it is a ‘low-tax’ jurisdiction. Gibraltar is a self-governing overseas territory with full constitutional power to levy taxes. Gibraltar offers a competitive tax environment in both the personal and the corporate context. Personal taxes are low across the board, with an effective rate of income tax of only 25% (26% for a period of one year from 1 July 2023 as a response to Covid expenditures) on all incomes up to £500,000. All companies in Gibraltar pay only 12.5% tax on profits. However, Gibraltar has no wealth tax, no inheritance tax, no capital gains tax and no tax is payable on what is deemed ‘passive income’ (subject to provisions relating to non-Gibraltarian residents not in posession of a CAT2/HEPSS certificate, or otherwise in ‘true third party’ employment), which includes pension income.

Do you pay tax if you work in Gibraltar?

Yes. If you work and you generate income in Gibraltar, that income is subject to tax calculated on rates relevant to the particular tax payer. Gibraltar levies tax based on where the income arises and not on the basis of residency. Where a cross-border worker works in Gibraltar and lives in Spain, for example, the Treaty between the U.K. and Spain in relation to tax in Gibraltar applies such that Spanish tax residents working in Gibraltar will be required to pay the difference between the tax payable in Gibraltar and the tax payable in Spain.

Does Gibraltar tax foreign income?

No and Yes. Gibraltar only taxes income that accrues in or derives from Gibraltar. Tax on non-Gibraltar source income is therefore not generally payable in Gibraltar, and that extends to non-residents who may generate some income in Gibraltar, as long as they do not trade in Gibraltar for more than 30 days a year.

Those deemed ordinarily resident in Gibraltar, pay tax in Gibraltar on their worldwide income.

How do I become a tax resident in Gibraltar?

As a general rule, for the purposes of income tax in Gibraltar, ‘ordinarily resident’ means an individual who, irrespective of whether such an individual is domiciled in Gibraltar or otherwise, in any year of assessment is present in Gibraltar for a period of at least 183 days in aggregate or is present in Gibraltar in excess of 300 days in three consecutive years. ‘Non-resident’ means any person other than a person ordinarily resident.

What is the rate of Corporate tax in Gibraltar

The corporate rate of tax in Gibraltar is 12.5%. Corporation tax in Gibraltar is charged on the income accruing in or derived from Gibraltar, on the profits or gains of a company or trust from any trade or business. The rate of 12.5% is subject to exceptions that apply in respect of utilities and/or companies enjoying a dominant position in the local market– these entities pay income tax at 20%.

What Capital Gains Tax is payable in Gibraltar?