THE ADDRESS Magazine No.20 | Page 320

Provided an application is accepted by the Finance Centre Director Category 2 residents could be benefiting from: „„ „„ „„ „„ „„ „„ „„ Maximum income tax payable £28,360 on worldwide income No inheritance tax No capital gains tax No VAT No wealth tax No tax on savings or dividend income (from companies quoted on a recognised Exchange) A flat rate of 2.5% income tax on QROPS and QNUPS pensions in drawdown Once established there is no physical presence required in Gibraltar although it is a requirement to purchase or rent an approved property. Purchase would be the preferred option as renting might raise questions in respect of permanency of residence from the jurisdiction that the applicant was leaving. It is also important to note that whilst there are no minima or maxima number of days required for residency in Gibraltar it is essential not to fall foul of the residency rules in another jurisdiction by spending too little time in Gibraltar and an individual is considered ordinarily resident in Gibraltar 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. There is a general principle that Category 2 individuals should not obtain employment or carry on business in competition with an ordinary taxpayer, whether this is done in an individual name or through a company. However the Ministry of Finance is prepared to make exceptions where it can be proved that there is exceptional economic benefit for Gibraltar which warrants a departure from the general principle. 326 Category 2 residency status represents an extraordinarily attractive proposition and we understand that the Gibraltar government is currently looking at options to further broaden the appeal of Category 2 residency. Self Sufficiency For those retired or enjoying a passive income from investments and savings there is perhaps an even more interesting and effective residency option known as “selfsufficiency”. This really is a fantastic option with no direct tax to pay on passive income, save for the flat rate of 2.5% on QROPS or QNUPS pension income. Corporate Tax Residency Whilst Gibraltar offers entrepreneurs and wealthy individuals taking up residency an opportunity to enjoy a privileged tax regime exactly the same can be said for companies and their employees. Gibraltar has introduced a flat rate of corporate tax of 10% for companies with an equally attractive set of personal tax rates for its employees. In the same way that there are compelling arguments for individuals to relocate to Gibraltar there are equally powerful reasons why companies will find Gibraltar an ideal location to set up or switch their trading base. Gibraltar is already an established location for some of the major on line gaming firms and a plethora of financial services operations and the Government is encouraging the building of new office space to keep pace with increased demand. There is a new international airport terminal and construction has already commenced for a Gibraltar World Trade Centre which will add a significant amount of office space along with many other building develop-ments