CATEGORY 2 INDIVIDUALS (PREVIOUSLY KNOWN AS HIGH NET WORTH INDIVIDUALS) AND RESIDENCY
There has been a continuous increase in the demand for the status of High Net Worth Individual (HNWI) residency in Gibraltar. The status of HNWI was introduced in February 1992 by the Government of Gibraltar through the introduction of new low tax limits for HNWI’s in order to encourage wealthy individuals to establish a residence in Gibraltar. These rules, forming part of the Income Tax Ordinance, have been reviewed and promulgated several times resulting in the current Qualifying (Category 2) Individuals Rules 2004. Although these rules revoke and replace the earlier Rules and provide amongst other changes, higher rates of tax, endorsements of certificates and an increase in fees, they do not however significantly alter the original concept of HNWI as contained in the Qualifying (High Net Worth) Individuals Rules 1992. |
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This letter considers the implications of the Rules and establishes the criteria that will be implemented in applying for the status. Initially referred to, under the 1992 Rules, as HNWIs, these have been recognised, since 1999, as Category 2 Individuals.
The benefits of the Category 2 status and residency in Gibraltar are attractive for individuals of countries where levels of personal income tax can be particularly high, such as British, German, Canadian, Swiss and French nationals. In essence a Category 2 Individual will only pay tax on the first £60,000 of assessable income with a minimum tax payable per annum of £18,000. In the first year of assessment the minimum tax payable under the new Rules shall be £1,500.00 for each complete or part month for which the certificate is in force in that year...
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