Cat 2 is not a catamaran
Cat 2 is not a catamaran or a Maritime and Coastguard Agency coding requirement but it can save wealthy individuals lots of money which they can then invest in a beautiful yacht that Boatshed Gibraltar can supply.
A Cat 2 individual pays a flat amount of £30,000 tax per annum regardless of the level of his worldwide income. Combine the weather and yachting friendly environment on the Rock of Gibraltar and it's no surprise that wealthy individuals are flocking to Gibraltar.
The Category 2 individual must be of substantial and sound financial standing and have a minimum net worth of £2 million.
The Category 2 resident must either own or rent approved residential accommodation in Gibraltar. The accommodation must be approved by the Gibraltar Finance Centre and be used exclusively by the Category 2 individual and his direct family. His direct family includes his spouse, children, brother, sister, parents and his spouse’s parents. Therefore, the Category 2 individual cannot rent the property and is limited to occasionally allowing others to stay there, otherwise he will not be deemed to have “exclusive use” and would consequently lose his status.
The Category 2 individual cannot have been resident in Gibraltar during the five years immediately preceeding the year of assessment. Previous residency (as defined in the Category 2 rules) includes 183 days in any tax year during the previous 5 years or an average of 90 days in any three of the previous 5 years.
The Category 2 individual is not allowed to engage in a trade, business or employment in Gibraltar. Exceptions to this rule include where duties are incidental to a business outside of Gibraltar or the Category 2 resident is a director of a Company which does not transact any trade or business in Gibraltar. The Gibraltar Finance Centre has issued guidelines in the form of a circular confirming the list of permissible activities that a Category 2 individual may in principle carry out. In addition to this, it is also possible to apply for a ruling to determine whether proposed activities would contravene the Category 2 rules..
Category 2 status is granted on an indefinite basis, but the Category 2 residency certificate needs to be sent to the Gibraltar Finance Centre for endorsement every three years.
The Category 2 individual must have private medical cover in Gibraltar.
There is no minimum stay in Gibraltar for a Category 2 resident individual, therefore as long as the individual fulfils all of the above conditions he will retain his Gibraltar residency without the need to spend any time in Gibraltar.
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