What is Category 2 residency in Gibraltar?
Short answer
Category 2 is a special tax status for high net worth individuals under which Gibraltar income tax is charged only on the first £118,000 of assessable income, giving a minimum annual liability of £37,000 and a maximum of £42,380. Following changes announced on 18 June 2026, new applicants need net assets of at least £5 million and pay a £5,000 application fee.
Detailed answer
Category 2 status is granted under the Qualifying (Category 2) Individuals Rules 2004. It is designed for high net worth individuals who want to make Gibraltar their base. Tax treatment A Category 2 individual is taxed only on the first £118,000 of assessable income under the Allowances Based System. The minimum annual tax is £37,000 and the maximum is £42,380. Income above the cap is not taxed in Gibraltar, and Gibraltar has no capital gains, inheritance or wealth taxes. Who qualifies Applicants must not have been resident in Gibraltar in the previous five years, must have approved residential accommodation in Gibraltar available for their exclusive use throughout the year, and must hold private medical insurance. On 18 June 2026 the Government announced that the minimum net wealth requirement for new applicants would rise from £2 million to £5 million and the application fee from £1,233 to £5,000. Existing Category 2 individuals are grandfathered and keep the previous net wealth threshold. The changes are made by amendment to the 2004 Rules, so confirm the current position with the Income Tax Office or an adviser before applying. What Category 2 does not give you The Government has confirmed that Category 2 status carries no entitlement to publicly funded schooling or healthcare. Under the June 2026 changes, a person who loses Category 2 status no longer has an automatic basis for continuing to live in Gibraltar. Presence and tax residence The Category 2 rules do not set a minimum number of days in Gibraltar. If you need a Gibraltar tax residence certificate, for example to show another tax authority where you live, the Income Tax Office applies the statutory presence test (at least 183 days in a tax year or more than 300 days over three consecutive tax years) and its residence evidence guidance, so you may need to show physical presence and genuine ties as well as your Category 2 certificate. The treaty The UK-EU treaty on Gibraltar was signed on 14 July 2026 and has applied provisionally since 15 July 2026. It is designed to ease movement across the frontier and does not change Gibraltar's tax rules.