WHAT IS A CAT II PERSON?

These are individuals who are in possession of a certificate issued by the Gibraltar Finance. This high net worth individual or Category 2 individual can only be taxed under the allowances-based system. At present their gross assessable income is capped at £80,000 per annum. There are various requirements in place for what will be required from the individual, for them to be provided with a Cat 2 status.

THE KEY CONDITIONS OF OBTAINING CATEGORY 2 STATUS ARE AS FOLLOWS:

The Category 2 individual must be of substantial and sound financial standing and have a minimum net worth of £2 million.

- The Category 2 resident must either own or rent approved residential accommodation in Gibraltar. The accommodation must be approved by the Gibraltar Finance Centre and be used exclusively by the Category 2 individual and his direct family. His direct family includes his spouse, children, brother, sister, parents and his spouse’s parents. Therefore, the Category 2 individual cannot rent the property and is limited to occasionally allowing others to stay there, otherwise he will not be deemed to have “exclusive use” and would consequently lose his status.

Business Man

- The Category 2 individual cannot have been resident in Gibraltar during the five years immediately preceding the year of assessment. Previous residency (as defined in the Category 2 rules) includes 183 days in any tax year during the previous 5 years or an average of 90 days in any three of the previous 5 years.

- The Category 2 individual is not allowed to engage in a trade, business or employment in Gibraltar. Exceptions to this rule include where duties are incidental to a business outside of Gibraltar or the Category 2 resident is a director of a Gibraltar Exempt Company or a director of a Company which does not transact any trade or business in Gibraltar. The Gibraltar Finance Centre has issued guidelines in the form of a circular confirming the list of permissible activities that a Category 2 individual may in principle carry out. In addition to this, it is also possible to apply for a ruling to determine whether proposed activities would contravene the Category 2 rules.

- Category 2 status is granted on an indefinite basis, but the Category 2 residency certificate needs to be sent to the Gibraltar Finance Centre for endorsement every three years.

- The Category 2 individual must have medical cover in Gibraltar (usually in the form of private medical cover).

- There is no minimum stay in Gibraltar for a Category 2 resident individual, therefore as long as the individual fulfills all of the above conditions he will retain his Gibraltar residency without the need to spend any time in Gibraltar.

CAT II - FAQ´S

No, a High net worth individual or Category 2 individual can only be taxed under the allowances-based system. At present their gross assessable income is capped at £80,000 per annum.

As tax rates presently stand the minimum annual tax liability is £22,000

As tax rates presently stand the maximum annual tax liability is £27,560

No, a Higher executive possessing specialist skills can only be taxed under the Gross Income Based system. At present their gross assessable income is capped at £120,000 per annum.

As tax rates presently stand the annual total tax liability would be £29,940.

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