Taxes in Gibraltar

Tax rates for Gilbraltar
Tax year for Gilbraltar residents initiates on the 1st of July and terminates on June 30th of the next year. Liability to tax in Gibralter is based on income “accrued or derived” in Gibraltar by an “ordinarily resident”.
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“Ordinarily resident” is described in the Income Tax Act 2010 as someone who is present in Gibralter for (1) 183 days or (2) 300 days over a three year consecutive period.tax rates for Gilbraltar

TAX RATES
Gibraltar gives residents the choice of two income tax systems. Both systems work parallel to each other and the resident has a choice to use whichever has a lower tax outcome.

THE GROSS INCOME BASED SYSTEM
This system allows the resident to choose a flat tax rate with certain specific deductions in relation to medical insurance, pensions and purchase of main residence.

For individuals earning up to £25,000:

  • 6% on first £10,000
  • 20% on next £7,000
  • 28% on balance

For individuals earning over £25,000:

  • 16% on first £17,000
  • 19% on next £8,000
  • 25% on next £15,000
  • 28% on next £65,000
  • 25% on next £395,000
  • 18% on next £200,000
  • 10% on next £300,000
  • 5% on balance

THE ALLOWANCE BASED SYSTEM
The tax rates of the allowance based system are (1) first £4,000 of taxable income 15% (2)next £12,000 of taxable income 18% (3)the remainder of taxable income 40%. Taxpayers benefit from an automatic tax cut based on the higher of £300 or 2% of the bill.

ALLOWANCES AND TAX RELIEFS

  •  Personal allowance – £3,100
  •  Married allowance – £3,100
  •  Single parent allowance –£ 4,000
  •  Nursery School Allowance (per child) – £,000
  •  Child Relief (first child) – £997
  •  Child Relief (for each child educated abroad) – £1,105
  •  Social Insurance (employee) – £335
  •  Social Insurance (self-employed) – £432
  •  Disabled Person Relief – £6,000
  •  Dependent Relative (max) – £190
  •  House Purchase Allowance –£15,500
  •  House Purchase Special Allowance (£1,000 max p.a.) – £4,000
  •  Medical Insurance Allowance – £2,000
  •  Apprentice Allowance –£380
  •  Blind Person – £3,000

OTHER PERSONAL ALLOWANCES AND TAX RELIEFS
Low income taxpayers – If the resident earns less than £10,000 during the tax year, no tax will be charged on this income. If resident earns less than £19,500, they would benefit from the tapering allowances. Life Assurance Premiums – Fully allowable as long as it does not exceed 1/7 of assessable income or 7% of the capital sum assured at death. Allowance is limited to 17% basic tax rate for new policies initiated. Mortgage Interest – Allowable interest on Gibraltar residential properties occupied by the taxpayer on loans of up to £350,000. Pension Contributions – Premiums made to approved personal or occupational pension schemes are allowable subject to limits.
Bank and Building society deposit interest and income from quoted investments – tax free
Gibraltar Government Debentures investments – tax exempt

SOCIAL INSURANCE
Calculated on gross earnings as follows:

  • Employed (under 60) – 10% max £25.16 (employee)
  • 20% max £32.97 (employer)
  • Employed (60 and over) – 20% max £32.97 (employer pays only)
  • Self-employed – 20% max £30.17