Gibraltar Tax Info

Every taxpayer may choose between the allowance based system and the Gross Income Based system and pay under whichever results in the lower tax.

Gross Income Based system has no allowances and tax rates of:-

• 20 % on first £25,000 income
• 30 % on next £75,000
• 40 % above £100,000

Rules relating to the Gross Income Based system will prevent one family member benefiting from the new system and another getting the benefits of the allowances (e.g. mortgage interest etc) under the other system.

Under this GIB System no taxpayer with income below £25,000 per annum will pay more than 20 % tax. No taxpayer with income below £50,000 per annum will pay more than 25 % tax.

Gibraltar Allowances & Reliefs

Low Earners

A tax credit of £595 (2006/07 - £275) is given to taxpayers whose earned income for the tax year is less than £8,000 (2005/06 - £8,000) and is now paid through the PAYE code.

Low Income Tax Credit extended to those who earn between £8,000 and £19,500. In combination with widening the Standard Rate band, all these taxpayers will recieve a benefit of at least £300 per annum, mostly through PAYE code.

Students

Earnings during school and university are exempt from tax.

Mortgage Interest Relief

Interest fully allowable on Gibraltar residential property occupied by taxpayer.

Life Assurance Premiums

Premiums fully allowable provided they do not exceed 1/6 of assessable income or 7% of the capital sum assured at death.