Gibraltar Category 2: The Tax Residency Status High Net Worth Individuals Need To Understand

You might have heard a private banker, lawyer or fellow entrepreneur say something like:
“Gibraltar CAT 2 would be perfect for you.”

So you search online, and suddenly you are staring at tax bands, residency rules and immigration jargon. Is it a visa? Is it a residency permit? Is it just a way to pay less tax somewhere sunny?

If that sounds familiar, you are not alone. Many high net worth individuals (HNWIs) who are ideal candidates for Gibraltar’s Category 2 (often written Cat 2) status struggle to get a clear, joined up explanation of what it is and how it fits with real life.

This article is designed to fix that. In plain English, we will explain:

• What Gibraltar Category 2 actually is
• Who typically qualifies and the key conditions
• The lifestyle you can expect if you base yourself in Gibraltar
• How TAG Consultancy can support your full journey

What is Gibraltar Category 2?

Category 2 is a special tax status created for high net worth individuals under Gibraltar’s Qualifying (Category 2) Individuals Rules 2004.

A Category 2 Individual is someone who qualifies for this special tax status as a means of limiting their potential taxable liability in Gibraltar.

As of the 2025/2026 year of assessment, if you are approved as a Category 2 Individual:

• You are taxed only on the first £118,000 of your worldwide taxable income, irrespective of how high your total income actually is
• The maximum tax payable in Gibraltar on that income is £42,380 per year
• The minimum annual tax payable is £37,000, or £3,083.33 for each complete month or part month for which the certificate is in force

Category 2 status is:

• A tax category linked to a formal Qualifying Certificate issued by the Gibraltar Finance Centre
• A way of giving you certainty over your Gibraltar income tax exposure each year

Think of Category 2 as one important piece of a broader relocation and wealth planning strategy.

Who typically qualifies as a Category 2 Individual?

Minimum net worth 2 million in assets

In order to qualify, firstly you must have an estimated total net worth in excess of £2 million. Potential applicants then need to produce evidence of this during their application, typically through:

• Bank statements
• Investment portfolio valuations
• Other documentary evidence of assets

Previous residence in Gibraltar

Secondly, Category 2 Individuals must not have been resident in Gibraltar during the five years immediately preceding the year of assessment.

For these purposes, previous residency includes:

• Spending 183 days or more in Gibraltar in any tax year during the previous five years, or
• Spending an average of 90 days or more in any three of the previous five years

Apart from net worth and no previous residency, there are a few more qualifications that need to be covered in order to get a better understanding. Our team is always happy to talk through the full detail of these requirements with potential candidates who would like to explore their position further. Contact us today to find out more about the qualifications for Cat 2 status.

Why Category 2 is attractive from a tax perspective?

Once granted, Category 2 gives you a clear, predictable framework for your Gibraltar tax position.

Capped income tax

As noted above:

• You are taxed only on the first £118,000 of your worldwide taxable income
  
  
• Your Gibraltar tax is capped between £37,000 and £42,380 per tax year at current rates

For entrepreneurs, investors or retired HNWIs with significant global income and at least £2 million in assets, this creates a ceiling on Gibraltar tax exposure that can be planned around.

Speak to a member of our team to find out more about how our TAX Advisory services can help you work through the numbers for your specific situation.

No tax on many forms of wealth and passive income

Under Gibraltar’s wider tax system:

• There is no capital gains tax
• There is no inheritance tax
• There is no tax on passive income, subject to conditions as regards non-Gibraltarian Gibraltar residents

Combined with Category 2, this means that:

• Capital growth on your investments is not taxed in Gibraltar
• There is no separate inheritance tax layer in Gibraltar over your estate planning
• Gibraltar focuses on taxing a capped portion of your income rather than your net worth

Family friendly

Your spouse and dependent children can usually be covered under your Category 2 status where they live with you in the qualifying property, simplifying the family tax position.

Gibraltar is much more than a tax move, it is a move to a vibrant lifestyle

For most clients, tax efficiency is only part of the picture. Gibraltar works because it combines a favourable regime with a genuinely pleasant place to live and work.

Mediterranean climate and outdoor lifestyle

Gibraltar enjoys a mild Mediterranean climate with winter temperatures around 16°C, summer temperatures often above 30°C and around 300 days of sunshine a year.

You have beaches and marinas on your doorstep, hiking on the Rock, and Spain’s Costa del Sol just across the border. Gibraltar also has extremely low crime levels, consistently ranking as one of the safest places to live in Europe, and was even ranked the 6th safest city in the world in the 2025 Global Index.

British based, international outlook

Gibraltar’s legal system is based on English common law, English is the main language and the currency is the Gibraltar pound, which is interchangeable with Sterling.

That familiarity matters when you are structuring significant assets or relocating a family.

A serious financial centre in a compact space

Gibraltar is a well regulated international finance centre with established strengths in insurance, funds, online gaming, wealth management and, increasingly, fintech and digital assets.

You get access to high quality professional services, yet everything is close enough that you can walk from home to school to the office to dinner.

For many HNWIs, that combination of lifestyle and infrastructure is what makes Gibraltar feel like a home rather than just a line in a tax plan.

How TAG Consultancy supports your full Cat 2 journey?

At TAG Consultancy, we coordinate all of these elements for you.

If you qualify for the status, TAG Consultancy will coordinate the Cat 2 process end to end, including:

• Conducting an initial compliance review in line with POCA to ascertain viability
• Giving you the guidance you need on what information and documents will be required
• Sorting out all the key administration around your Gibraltar arrangements
• Assisting with the Category 2 Individual certificate application and liaising with the Gibraltar Finance Centre throughout

You have a single, experienced team guiding you through the process rather than trying to manage multiple advisers alone.

Company Management and ongoing compliance

Where a Gibraltar company is part of your plan, TAG Consultancy can:

• Incorporate the company and provide registered office and company secretarial services
• Assist with company management
• Coordinate accounting, tax filings and regulatory compliance over the long term

That joined up support lets you focus on enjoying your new life in Gibraltar  while we manage the detail. If Company setup is already your intended direction, speak to a member of our team about our end-to-end company management services. 

Please note that if you are planning to operate a Gibraltar trading company, prior authorization from Gibraltar Finance centre must be granted during your application process. 

To find out more about how TAG Consultancy can assist in you CAT 2 application, message us directly, You can also call us on +350 2250152 or email us at info@tag.gi.