Gibraltar Government Proposes Tax Increase For The Wealthy

by Robert Lee, Tax-News.com, London

12 January 2004

The government of Gibraltar has revealed that it is proposing to increase the amount of taxation paid by high net worth individuals.

The proposals, which are at present in the consultative stage and being circulated amongst members of the Finance Centre Council, will make amendments to the Qualifying (Category 2) Rules 1999 and Qualifying (High Net Worth) Individuals Rules 1992.

As a result, this could mean the minimum amount of tax payable by Category 2 Rules Individuals and HNWI Rules individuals will be increased from £10,000 per year to £14,000 per year. The maximum level of taxable income that can be attributed to Category 2 individuals may be raised from £45,000 to £50,000. The tax band for Category 2 Individuals currently ranges from £10,000 to £18,250. The proposals would increase this to a slightly higher band of £14,000 to £20,500.

The government has pointed out that it is ten years since the HNWI rules were first introduced and over four years since the Category 2 rules were brought in, during which time the minimum levels of taxation have remained unchanged. It believes the infrastructural and regulatory improvements that have taken place since have improved the jurisdiction’s competitiveness, thus justifying the proposed tax increase.

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