CAT 2 Guide

Cat 2 Guide

As if its warm climate and unique Mediterranean lifestyle wasn’t enough to attract expatriates to the Rock, Gibraltar offers a favourable tax system. There is no VAT, no inheritance tax, no withholding tax, no capital gains tax and a corporate tax rate of 10%. The benefits of this system are also extended to high net worth individuals who want to become Gibraltar resident and who qualify under one of the available tax regimes. There are two special tax statuses, the Category 2 (Cat 2) and the High Executive Possessing Specialist Skills (HEPSS) status both designed to mitigate a person’s tax liability for wealthy individuals relocating to Gibraltar.

THE CATEGORY 2 STATUS

As a Category 2 Individual, you will have your Gibraltar income tax capped to the maximum, calculated on the first £80,000 of assessable income, irrespective of how much is actually earned throughout the year. The annual tax liability ranges from a minimum of £22,000 to a maximum of £29,800, depending on your individual circumstances. Tax is only paid on income remitted to Gibraltar. As a Category 2 resident in Gibraltar, you can take full advantage of Gibraltar’s status as a reputable offshore finance centre. Children are eligible to attend local school in Gibraltar and benefit from a high-level education that follows the UK National Curriculum. There is no minimum number of days that have to be spent in Gibraltar in any year of assessment. In general terms, as a Category 2 Gibraltar resident, you should not engage in any trade, business or employment in Gibraltar, although there are certain permissible activities.

There are certain requirements that should be met to qualify for Category 2 status:

The purchase or rental of approved residential accommodation in Gibraltar that is suitable to meet the needs of your family circumstances. This must be available for your and your family’s exclusive use for the whole of the year of assessment.
Minimum of £2m net assets. The Government of Gibraltar will wish to ensure that the applicant has the financial means to be self-sufficient.
The applicant must not have been Gibraltar resident for the five years preceding the application.
A curriculum vitae listing qualifications and work experience, and two references to confirm your good financial standing. One must be from a recognised Banking institution.
Private medical insurance for all family members relocating to Gibraltar.