Overview
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.
Key benefits
- Annual income tax capped at GBP 42,380, regardless of worldwide income
- No capital gains, inheritance, wealth or gift tax in Gibraltar
- No statutory minimum number of days in the territory
- English-speaking common law jurisdiction under British sovereignty
- Family income can be brought within the same capped assessment
- Long-term route to British Overseas Territories and British citizenship
- Established private banking, legal and trust services on site
Requirements
- Net wealth of at least GBP 5,000,000 for applications made under the 2026 policy
- No residence in Gibraltar during the previous five tax years
- No trade, business or employment in Gibraltar in the previous five years, other than duties incidental to work based abroad
- Approved residential accommodation in Gibraltar, bought or rented, available for the holder's exclusive use and not let to others
- Comprehensive private medical insurance for the applicant and family
- Good character, with background checks on the applicant and family
- References from a reputable bank and a recognised professional adviser
- Payment of the GBP 5,000 fee and a refundable advance tax payment equal to the maximum annual liability
Investment options
Category 2 individual (RBI)
GBP 5,000,000 net wealth; tax GBP 37,000–42,380 a year
Residence for high-net-worth individuals, with tax charged only on the first GBP 118,000 of assessable income. Holders admitted under the previous GBP 2 million test keep their status.
HEPSS certificate (residence linked to employment)
Tax GBP 39,940 a year at current rates
For Higher Executives Possessing Specialist Skills employed in Gibraltar: tax is limited to the first GBP 160,000 of employment income under the Gross Income Based System.
Ordinary residence (residence permit)
Individuals who do not qualify for a special certificate may reside under the general rules and are taxed on worldwide income at standard rates, with a top rate of 28% under the Gross Income Based System.
Step-by-step process
- 1
Eligibility and tax review
We confirm the five-year look-back, document net wealth and model the Gibraltar position against the tax exit from your current home. Two to four weeks.
- 2
Accommodation
A property is bought or leased and submitted for approval as suitable for the applicant and family. Timing depends on the market, often one to three months.
- 3
Application to Gibraltar Finance
The file, references and evidence of wealth are lodged with the Finance Centre Director together with the GBP 5,000 fee and the advance tax payment.
- 4
Due diligence and certificate
Background checks are completed and the Category 2 certificate issued; this commonly takes a few months.
- 5
Residence documentation
Residence documents and identity cards are obtained for the holder and family, and private medical cover and schooling are put in place.
- 6
Annual compliance
Tax returns and payments are made on Gibraltar's 1 July to 30 June tax year, and the approved accommodation is maintained.
Typical documents
- Passports and photographs for the applicant and each family member
- Detailed statement of net wealth with bank statements or accountant confirmation
- Evidence of source of wealth
- Bank reference from a reputable institution
- Professional reference from a lawyer or accountant
- Criminal record certificates from countries of residence
- Purchase deed or lease for the approved accommodation
- Private medical insurance policy
- Marriage and birth certificates for dependants
How Legal Wealth helps

Legal Wealth helps families decide whether Gibraltar's Category 2 regime still fits after the 2026 increase in the wealth test, comparing it with Malta, Monaco, Jersey and the United Kingdom. We prepare a wealth and source-of-funds file that withstands scrutiny, coordinate Gibraltar counsel and tax advisers, and plan the exit from your existing tax residence so the move is defensible. Our work is compliance-first and discreet, with residence planned alongside holding structures, trusts and succession.
Enquire with Legal WealthFrequently asked questions
I already hold Category 2 status. Does the GBP 5 million test affect me?
No. The Government stated that existing Category 2 individuals are fully grandfathered and unaffected by the higher wealth requirement.
How much tax will I pay each year?
Tax is charged only on the first GBP 118,000 of assessable income. At current rates the annual bill is at least GBP 37,000 and no more than GBP 42,380.
Do I need to spend a minimum number of days in Gibraltar?
There is no statutory day count for Category 2, but you must keep approved accommodation for your exclusive use. Your former country's tax residence rules usually drive how much time you should spend there.
Will my family have access to public schools and healthcare?
No. The Government has confirmed that Category 2 status carries no entitlement to publicly funded schooling or healthcare, so private medical insurance is required.
Can I work or run a business in Gibraltar?
Category 2 is not an employment route. Local trading or employment can affect the status and should be reviewed before you start; executives may consider the HEPSS certificate instead.
Can Category 2 lead to a British passport?
Lawful residence can support naturalisation as a British Overseas Territories citizen, generally after about five years, followed by registration as a British citizen. The status does not shorten that timeline.
Last reviewed: 2026-10. Requirements, fees and timelines change. Information is general, reviewed on the date shown, and is not legal or tax advice.
Sources
- HM Government of Gibraltar: Government announces changes to Category 2 regime (press release 469/2026)
- HM Government of Gibraltar, Income Tax Office: Qualifying individuals
- EY Gibraltar: Tax facts 2025/2026
- Deloitte: Gibraltar Category 2 individuals
- Hassans: Category 2 regime changes (June 2026)
- Seb Sauerborn: Gibraltar Category 2 changes 2026 (Legal Notice 127 of 2026)






