Category 2 status in Gibraltar: capped tax for high-net-worth residents

Category 2 is a tax and residence status granted under the Qualifying (Category 2) Individuals Rules 2004, made under Gibraltar's income tax legislation. Applications go to the Finance Centre Director at Gibraltar Finance, who issues a certificate once satisfied that the applicant meets the conditions; the Income Tax Office then assesses the holder under the special rules. The right to live in Gibraltar is granted through residence documentation linked to the status, and the Government has stated that anyone who ceases to hold Category 2 status will lose the right to continue living there. The status is not an employment route, and holders should not take up a trade, business or employment in Gibraltar without specific advice.

Press release 469/2026 of 18 June 2026 announced the first significant change to the regime in years. New applicants must now show net wealth of at least GBP 5 million instead of GBP 2 million, and the non-refundable application fee rose from GBP 1,233 to GBP 5,000, a change made by Legal Notice 127 of 2026 and effective from 22 June 2026. The Government linked the reform to the UK–EU treaty on Gibraltar's future relationship with the European Union and the Schengen area. Existing Category 2 individuals are fully grandfathered. The release also reaffirmed that the status gives no entitlement to publicly funded schooling or healthcare, so private medical insurance and private or fee-paying education must be budgeted.

For tax, an ordinarily resident individual in Gibraltar is someone present for 183 days or more in a tax year, or more than 300 days over three consecutive tax years, and is taxed on worldwide income. A Category 2 holder is taxed under the Allowance Based System on only the first GBP 118,000 of assessable income, giving a minimum annual liability of GBP 37,000 and a maximum of GBP 42,380 at current rates; in the first and final years the minimum is pro-rated by month. A refundable advance payment equal to the maximum annual liability is lodged on application. Gibraltar levies no capital gains tax (save on certain local residential property disposals), no inheritance or estate duty, no wealth tax and no gift tax. Moving from another country requires a clear exit from that country's tax residence.

The applicant's spouse or civil partner and children can live in Gibraltar with the holder, and the holder may elect to treat their income as his or her own for the capped assessment, provided each would qualify in their own right. Residence under Category 2 can lead to naturalisation as a British Overseas Territories citizen under the British Nationality Act 1981, which generally requires around five years of lawful residence, good character, English and an intention to remain; a British Overseas Territories citizen can then register as a British citizen. The United Kingdom allows dual nationality. Gibraltarian status is a separate local status with its own rules, and Category 2 does not shorten any of these paths. A companion certificate, HEPSS, serves senior executives with specialist skills.