Gibraltar has long offered high net worth individuals who are considering a change of country a compelling reason to take up residency on the rock.

The reasons for such a move are plentiful; for retirement, estate planning, tax planning or for a new lifestyle in the sunshine. Whatever the reason, considering residency in Gibraltar can offer additional benefits that many people are unaware of.

Category 2 Gibraltar Residency

A Category 2, or Cat 2 as it is known locally, resident can protect their trading, earned or retirement income from the higher rates of taxation applicable in their original country of residence or the countries where the income is declared.

If successfully granted the certificate, a Cat 2 High Net Worth Individual has their tax liability on worldwide income capped at £80,000 income with a minimum tax of £22,000 and a maximum of £27,560. They also benefit from other tax benefits such as no Inheritance Tax or Capital Gains Tax.

There is no latent tax on gifting to family and no annual wealth tax on their assets. There will be no income tax applied to their interest savings and no taxation on dividends arising from companies quoted on the stock exchange. They also benefit from a flat rate of 2.5% if they wish to take a pension drawdown from a recognised QROPS or QNUPS.

To benefit from Category 2 status, there are a few key conditions which must be fulfilled before application. Namely:

  • A Category 2 individual must be of substantial and sound financial standing
  • A Category 2 individual must be able to illustrate a minimum net worth of £2 million.
  • A Category 2 resident must own or rent approved qualifying residential accommodation in Gibraltar, to be used directly by the individual and his family
  • A Category 2 individual cannot have been resident in Gibraltar during the five years proceeding application
  • A Category 2 individual cannot engage in a business or employment in Gibraltar that is in direct competition with a local business
  • A Category 2 individual must have qualifying medical insurance

Knightsbridge Incorporations has extensive experience with the application for Category 2 residency and have assisted our clients with both fulfilling the requirements of application and understanding how far-reaching the benefits can be for their finances and family through ongoing residency planning.

A Category 2 resident does not have a minimum physical residence requirement in Gibraltar.

For information on other types of Gibraltar Residency, click here.

Knightsbridge Incorporations Limited is licensed by the Financial Services Commission in Gibraltar under licence number: FSC24049