Category 2 Status

Category 2 (“Cat 2”) status, governed by the Qualifying (Category 2) Individuals Rules 2004, is a specialist tax status for  high net worth individuals. Tax is applied to the first £118,000 of assessable income (including worldwide income) meaning that a Cat 2 individual will pay a maximum of £42,380 tax per annum, subject to a minimum payable of £37,000 per annum. This cap does not apply to certain income accrued and derived from Gibraltar.

However, a new rule was recently introduced requiring Cat 2 individuals to pay an amount equivalent to the maximum tax payable (currently £44,740), in addition to any final balance of tax due in relation to the tax year.

A Cat 2 individual can only be taxed under the Allowance Based System.

These individuals must make two tax payments on account each year, by 31 January and 30 June, and are set off against the balance to be paid by no later than 30 November.

Requirements for Cat 2 Status:

• Has available for their exclusive use approved residential accommodation in Gibraltar for the whole of the year of assessment;
• Is a non-Gibraltar resident for the five years preceding the application (i.e. not present for a period exceeding 183 days in any such year of assessment, or an average of 90 days in any three of those years of assessment);
• Must provide evidence of sufficient wealth (a minimum of £2 million net assets);
• Must produce a valid passport and full CV; 

• Must have private medical insurance which meets minimum policy cover.

• Must produce two independent references from recognised institutions / professionals (1 must be from a bank and the other from a law or accounting firm).

A non-refundable application fee of £1,197 is payable on submitting an application.

An advance tax payment of £42,380 is also payable on a successful Cat 2 application, which is effectively a deposit to be held for as long as an individual holds Cat 2 status and will be used to set off the final tax liability of an individual who relinquishes Cat 2 status, with any balance being refunded.

Where the Finance Centre Director is satisfied that the requirements are met, he may issue a certificate qualifying the individual as a Cat 2 individual.

A Cat 2 individual may be permitted to carry on or exercise any trade, business, or employment in Gibraltar if the Finance Centre Director is satisfied that such exercise would be of benefit to the economic development of Gibraltar.

Residency and Cat 2 in Gibraltar

For further information on Gibraltar residency applications in relation to Cat 2 Status individuals, click here.