Income tax is charged for the year of assessment - running from the 1 July in one calendar year to 30 June in the next - on the basis of the income of the preceding year except for income from employment or pension which is charged on the basis of the income for that year. The taxpayer's aggregate income, other than exempt income, is the "assessable income" and the "taxable income" is the assessable income, as reduced where appropriate in the case of an individual by the allowances described hereafter.
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Standard rate of tax
The standard rate of tax for individuals is 30%.
Deductions for personal reliefs
The allowances and deductions are:
Personal Allowance - £2,660
Spouse Allowance - £2,490
Dependant Relative Allowance
Resident in Gibraltar (max. 2) - £180
Non-resident (max. 2) - £130
Home Purchase Allowance - £11,500
Deduction (£1,000 max p.a.) - £4000
Child Allowance
Only first child educated in Gibraltar - £940
Each other educated abroad - £1045
Disabled individuals Allowance - £2,575
Single Parent Allowance - £2,490
Nursery School Allowance
Attending private nursery during the pre-school year - £965
Medical Insurance (Max Relief) - £1060
Life assurance, etc.
This deduction is given in respect of amounts payable by the taxpayer or his wife during the year of assessment for insurance premiums on his life or that of his wife and for contributions to a pension scheme approved by the Commissioner of Income Tax. The deduction is limited to one-sixth of the assessable income and in the case of a policy securing a capital sum on death to 7% of the capital sum excluding bonuses, etc.
Health Insurance
This deduction is given in respect of amounts payable by the taxpayer, during the year of assessment, towards an approved insurance policy, for premiums paid for the purpose of providing health insurance for himself, his spouse or his dependant children. This deduction is limited to £1060 in aggregate.
Mortgage Interest relief
A deduction is given in respect of the amount of interest paid on a mortgage or loan taken out by an individual for the purchase or improvement of a house or flat in Gibraltar for his own residential occupation.
Charge to tax
Individuals are charged to tax on their taxable income which is arrived at by deducting personal and other allowances from the assessable income at the following rates:
For every pound of
the first £4,000 of taxable income - 17%
the next £9,000 of taxable income - 30%
the remainder of the taxable income - 42%
Residence
Ordinarily resident when applied to an individual means an individual who resides in Gibraltar
Non-resident means any person other than a person ordinarily resident
Permitted Individual
A permitted individual is an individual who is a non-resident individual who carries on, or undertakes in Gibraltar any trade, business, profession, vocation or employment.
Permitted individuals are entitled to the same personal allowances and graduated rates of income tax as those afforded to ordinarily resident persons in Gibraltar. However if a permitted individual does not carry on, exercise or undertakes any trade, business, profession, vocation or employment in Gibraltar for a complete calendar month in any year of assessment, the deductions, allowances and reliefs allowed under the Act shall be reduced by one-twelfth for every such complete month. One-twelfth shall reduce the banding for each calendar month that the employment, etc. is not exercised in Gibraltar.
Qualifying Individuals
A Qualifying Individual is an individual who is non-resident and who derives no income from Gibraltar other than from an exempt Company. The Finance Centre Director sets out the rate of tax which is charged on the Qualifying Individual's worldwide income. The rate of tax shall not be less than 2% and the total amount of tax charged shall not exceed £20,000.
Qualifying (Category 2) Individual
A Qualifying (Category 2) Individual is an individual who for the year of assessment:
(1) has available to him for his exclusive use approved residential accommodation in Gibraltar for the whole of the year of assessment.
(2) is not resident in Gibraltar and has not been in the previous five years;
(3) has applied to the Finance Centre Director and has been issued with a certificate qualifying him as a Category 2 individual.
(4) an individual who has been issued with a Category 2 Individual certificate shall be liable to income tax on the first £50,000 of assessable income only and the amount of tax due and payable in any year of assessment shall be not less than £14,000.
Qualifying (Category 3) Individual
An exempt company which satisfies certain requirements, may apply to the Finance Centre Director and be issued with a certificate designating an individual employed by that company as a Qualifying Category 3 Individual. The individual must possess skills essential to the operation of the company, which are not available in Gibraltar. He must not have been employed in or from Gibraltar in the five years preceding the application and have approved residential accommodation in Gibraltar.
Tax of £10,000 per annum shall be payable in twelve equal monthly instalments on the taxable income of the individual.
Qualifying (Category 4) Individual
The rules and conditions in respect of a Qualifying (Category 4) Individual are the same as for a Category 3 Individual. However, in this case the company must satisfy the Finance Centre Director that in connection with the appointment of the Category 4 individual it has created a new and additional employment which will endure for at least the whole of the period during which a certificate has been issued.
A Category 4 Individual whose taxable income does not exceed £50,000 per annum shall be charged £5,000 tax in that year of assessment. When the income exceeds £50,000 per annum the amount chargeable will be £10,000 in that year of assessment.
Capital gains tax
There is no Capital Gains tax in Gibraltar.
Estate duty
With effect from 1 April 1997, Estate Duty was abolished in Gibral