Gibraltar tax year

The tax year in Gibraltar commences on the 1st July and ends on the following 30th June each year.

Liability to tax in Gibraltar

An individual (or company) is generally liable to Gibraltar taxation based on income "accrued, derived or received" in Gibraltar.

Gibraltar tax residency

The new Gibraltar Income Tax Act states that an individual is deemed to be "ordinarily resident" in Gibraltar if they are present in any year of assessment for either:

• 183 days; or
• 300 days over a three year consecutive period.

 
Physical presence as describes above is no the only way for an individual to be resident in Gibraltar, it is also possible to be resident in Gibraltar if you have a special residency status such as Category 2 residency.

Gibraltar tax rates

For individuals in Gibraltar who do not have Category 2 status they have a choice of being taxed under one of two income tax systems. These systems operate in parallel to each other. It is possible to opt to use either system (to obtain the lower tax outcome).

The gross base system

The gross base income system allows you to choose a flat tax rate but with no allowances and therefore paying tax on gross income.

For those earning in excess of £25,000 the rates are as follows:

20% on first £25,000

29% on next £75,000

35% above £100,000

 

Those earning under £25,000 there are lower and zero rate bands are as follows:

For Individuals earning under £16,000:

10% on first £10,000

20% on next £6,000

For Individuals earning between £16,000 and £25,000:

Calculated between 0% and 20% on a sliding scale.

The allowance based system

The tax rates of the allowance based system are as follows:

The first £4,000 of taxable income 17%
The next £12,000 of taxable income 30%
The remainder of taxable income 40%


Personal Allowances and Tax reliefs

Personal allowance	£2,735
Married allowance	£2,560
Personal allowance (over 65)	£10,590
Married couple's allowance (over 65)	£5,290
Single parent allowance	£2,560
Nursery School Allowance (per child in private nursery)	£995
Child Relief (first child)	£970
Child Relief (for each child educated abroad)	£1,075
Disabled Person Relief	£2,650
Dependent Relative (max.)	£185
House Purchase Allowance	£11,500
House Purchase Special Allowance (£1,000 max p.a.)	£4,000
Medical Insurance Allowance	£1,090
Apprentice Allowance	£370
Blind Person	£610

Other Personal allowances and tax reliefs

Low income taxpayers: Those who earn income for the tax year is less than £8,000 will pay no tax on this income. Taxpayers who earn less than £19,500, benefit from extra allowances.

Life Assurance Premiums: These are fully allowable provided they do not exceed 1/7 of assessable income or 7% of the capital sum assured at death. The allowance is limited to the 17% basic tax rate for new policies taken out.

Mortgage Interest: Allowable on residential property occupied by the taxpayer on loans of up to £300,000.

Pension Contributions: Premiums made to approved personal or occupational pension schemes are allowable subject to limits.

Bank & building society deposit interest and income from quoted investments: Tax free.

Gibraltar Government Debentures investments: Exempt from income tax.