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 Gibraltar “Income Tax Act” states that an individual is deemed to be ordinarily resident in Gibraltar;

• If the individual “resides in Gibraltar except for such temporary absences as to the commissioner may seem reasonable” or;

• Any individual “who is a British subject or citizen of the Republic of Ireland, who is employed or self employed in Gibraltar and who resides within the Campo district or partly within Gibraltar and partly within that district, except for such temporary absences as aforesaid”. (Campo being La Linea and Algeciras in Spain).

Therefore, a person who “resides” i.e. has a habitual abode in Gibraltar is considered tax resident.

It is also possible to be resident in Gibraltar if you have Category 2 status.

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 as follows:

20% on first £25,000
30% on next £75,000
38% above £100,000

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	£2,660
Married allowance	£2,490
Personal allowance (over 65)	£10,300
Married couple's allowance (over 65)	£5,150
Single parent allowance	£2,490
Nursery School Allowance (per child in private nursery)	£965
Child Relief (first child)	£940
Child Relief (for each child educated abroad)	£1,045
Disabled Person Relief	£2,575
Dependent Relative (max.)	£180
House Purchase Allowance	£11,500
House Purchase Special Allowance (£1,000 max p.a.)	£4,000
Medical Insurance Allowance	£1,060
Apprentice Allowance	£360
Blind Person	£590

Other Personal allowances and tax reliefs

Low income taxpayers: Those who earn income for the tax year is less than £7,500 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 certain limits.

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

Gibraltar Government Debentures investments: Exempt from income tax.