Personal Tax
Only income is taxed in Gibraltar. Income tax is charged on income accruing in or derived from Gibraltar.
This includes all income generated from any trade, business, profession or vocation. Additionally, certain income received by an individual ordinarily resident in Gibraltar is taxable on a worldwide basis.
The tax year runs from 1 July to 30 June and tax is payable on the taxable income for the year.
Individuals must file their tax returns by 30 November of each year following the end of that tax year.
What does “ordinarily resident” mean?
An individual will be deemed ordinarily resident when they are present in Gibraltar for at least 183 days in the year of assessment, or over 300 days in aggregate over three consecutive years of assessment.
Taxable Income
Income tax is charged on:
- Gains or profits from any trade, business, profession or vocation;
- Gains or profits from employment including any allowances or benefits in kind;
- Rents, premiums and other property interests from Gibraltar property;
- Dividends (subject to certain exemptions);
-
Profits from the sale of Gibraltar properties where a person holds five or more
properties, or has held more five or more properties during a specific period. ;
- Income received from certain pensions imported from abroad.
Tax rates in Gibraltar
Allowance Based System
Taxpayers on the ABS system will be taxed on their assessable income less allowances at the applicable rates:
| Gross Assessable Income less than £100,000 | ||
|---|---|---|
| First £4,000 of taxable income | 17% | |
| Next £12,000 | 17% | |
| Remainder | 39% |
Deductions for Personal Relief under ABS
| ALLOWANCE | AMOUNT – per annum |
|---|---|
| Personal | £3,455 |
| Spouse | £3,455 |
| Single Parent | £5,800 |
| Child Allowance – first child only | £1,190 |
| Child Allowance – each child educated abroad | £1,375 |
| Disabled Individuals | £10,000 |
| Nursery School | £5,480 |
| Blind Persons | £5,475 |
| Medical Insurance | £5,395 |
| Mortgage Interest (loans up to £350,000) | 100% |
| Home Purchase | £17,000 |
| Age Allowance (single) | £5,735 |
| Age Allowance (married) | £9,190 |
Gross Income Based System
Taxpayers on the GIBS will be taxed on their assessable income at the applicable rates:
Individuals with gross income not exceeding £25,000:
| Taxable Income | Tax Rate |
|---|---|
| First £10,000 of taxable income | 6% |
| Next £7,000 | 20% |
| Remainder | 28% |
Individuals with gross income exceeding £25,000:
| Gross Assessable Income less than £100,000 | ||
|---|---|---|
| First £17,000 of taxable income | 16% | |
| Next £8,000 | 19% | |
| Next £15,000 | 25% | |
| Next £65,000 | 28% | |
| Remainder | 25% |
Deductions for Personal Relief under GIBS:
| ALLOWANCE | AMOUNT – per annum |
|---|---|
| Mortgage Interest Payments | Up to £1,500 |
| Pension Scheme Contributions | Up to £1,500 |
| Home Purchase Allowance (first time buyers) | Up to £7,500 |
| Medical Insurance | Up to £3,000 |
| Solar/Wind Energy Systems | Up to £6,000 |
Social insurance contributions
Social insurance contributions are payable by every employee and self-employed person in any week in which they work as follows:
| Gross Earnings | Minimum per Week | Maximum per Week | |
|---|---|---|---|
| Employee | 10% | £13.65 | £38.85 |
| Employer | 18% | £30.45 | £53.55 |
| Self-employed | 20% | £29.00 | £51.00 |
Individuals aged 60 and over and those whose statutory occupational retirement age is earlier than 60, are exempt from paying the employee’s share of social insurance contributions.
Benefits in Kind
Benefits in kind are taxed as if they were income from employment and will be included as part of the individual’s taxable income, resulting in an increase in tax liability. The Income Tax Act 2010 sets out how to tax benefits and the allowances available, particularly with respect to:
- Expense payments;
- Vouchers and credit tokens;
- Living accommodation;
- Cars, vans and related expenditure;
- Loans to employees, directors and shareholders; and
- Removal benefits and expenses.
It is possible for the employer to opt to pay the tax on the benefits on behalf of the employee. The first £250 worth of benefits will be tax exempt. Where the total benefits received by an employee amount to between £250 and £15,000 in the year of assessment, tax payable by the employer is at a rate of 20%. Benefits in excess of £15,000 are taxed at 29%.
However, there are certain tax exemptions to benefits in kind for relocation employees in relation to accommodation and relocation costs (subject to conditions).
