What are the key tax benefits of establishing a Family Office in Gibraltar?
Short answer
Gibraltar has no capital gains tax, inheritance tax or wealth tax, and companies pay corporate tax at 15% on profits accrued in or derived from Gibraltar. Dividends, interest and trust income are taxed under specific rules in the Income Tax Act 2010, so the position depends on how the family office is structured and where the family members live.
Detailed answer
Gibraltar has no tax regime written specifically for family offices. The ordinary rules for companies, trusts and individuals in the Income Tax Act 2010 apply. There is no capital gains tax, inheritance tax or wealth tax. Estate duty was abolished with effect from Tuesday 1 April 1997. One exception to the absence of a gains tax concerns residential property in Gibraltar: where a person holds five or more taxable residential properties, directly or through a property-holding entity, profits on disposals are taxed as income under Part 2 of Schedule 1 to the Act. A family office company pays corporate tax at 15% on profits accrued in or derived from Gibraltar, the standard rate since Monday 1 July 2024. Utility companies and companies with a dominant market position pay 20%. Returns are due within nine months after the end of the month in which the accounting period ends. The charge is territorial in principle, because tax falls on income accruing in or derived from Gibraltar. Individuals who are ordinarily resident in Gibraltar are also taxed on employment, self-employment and certain other income arising elsewhere, so foreign income is not automatically outside the charge. Individuals with High Net Worth (Category 2) status are taxed on assessable income capped at £118,000 a year, and the Income Tax Office currently puts their annual liability at between £37,000 and £42,380. Investment income is taxed in defined cases. Dividends received by ordinarily resident individuals are taxable unless they come from a company listed on a recognised stock exchange or are paid out of profits that were not taxed in Gibraltar. Dividends paid from one company to another are not taxed. Interest is taxed on loans between companies where one company receives £100,000 or more a year from a single borrower or connected group, and in the hands of companies and trusts that lend to the public, take deposits, carry on insurance or hold a distributed ledger technology permission. Trusts are taxed on trading profits and on income from Gibraltar property. A beneficiary who is ordinarily resident in Gibraltar is taxed on distributions and benefits from a trust to the extent they can be matched with trust income that was taxable in Gibraltar, with credit for tax the trust has paid. Trusts and foundations register with the Income Tax Office and file returns. The linked FAQs give more detail, and a specific structure needs professional advice.