Gibraltar Location

5.8 Exemptions and concessions

Income from pensions

Income from state pensions is not taxable.

With effect from 1 July 2011, occupational pensions received from an approved pension scheme by individuals aged 60 or above, or by retired policemen, firemen, prison officers, Royal Gibraltar Regiment or customs officers who are aged 55 or over, and who are in employment will not be taken into account in establishing tax due on their earned income. In addition, all such pensions are taxed at 0%. There is no requirement to buy an annuity from the capital value of a pension fund and pensioners may withdraw the entire capital taxfree on reaching retirement age.

Pensions received from an approved pension scheme imported from another jurisdiction Qualifying Recognised Overseas Pension Schemes (QROPS) are taxed at the rate of 2.5% insofar as they form part of an individual’s taxable income.

Savings income

Income of a passive nature is not liable to tax — this includes bank interest and dividends and interest from securities quoted on a recognised stock exchange.

Gibraltar Government debentures

Income from investments in various Government of Gibraltar debentures is tax-exempt.

Rental income from property outside Gibraltar

Income from the rental of property located outside Gibraltar is not taxable in Gibraltar.

Other exemptions

Compensation for unfair dismissal and redundancy payments approved as non-taxable by the Commissioner of Income Tax.

Income received by a full-time student from employment.

Medical insurance premiums paid by an employer to an approved scheme on behalf of an employee up to £4,000.

Gift aid and charitable giving

Where donations are made under this scheme, the Government pays the charity in question the equivalent of the tax suffered by the donor on the amount of the gift grossed up at the standard rate of tax (20%). The limit on gifts under the scheme is £5,000 p.a.

A new Payroll Giving Scheme was announced in the 2015 budget, which allows for tax free charitable donations of up to £5,000 to be given.