HEPSS Gibraltar rules: residency and tax for executives

Income tax capped at 39,940 pounds a year on any salary, but only if a Gibraltar company hires you. The HEPSS and Category 2 rules for 2026, the new 5 million-pound threshold, residency rules and what the EU treaty means for Schengen travel.

Gibraltar caps the income tax of a senior executive with specialist skills at 39,940 pounds a year (about $53,000), whether the pay packet is 200,000 or two million. An ordinary resident earning 300,000 pounds pays 74,940 pounds. That 35,000-pound gap, every single year, is what the HEPSS regime is about. Wealthy people who do not work locally have a second door, Category 2: tax of 37,000 to 42,380 pounds a year, however large the income.

In 2026 both doors got narrower, and what lies behind them got more valuable. On 18 June the Government of Gibraltar raised the Category 2 wealth threshold from $2.7 million to $6.7 million, and from 22 June the application fee rose from about $1,700 to about $6,700. New residency rules with an age cap of 55 took effect on 14 July. And on 15 July the UK-EU Treaty on Gibraltar began to apply: the border fence with Spain is on its way out, and a Gibraltar resident now travels across Schengen without a visa. Below: the conditions, the real numbers, the step-by-step process and an honest look at who should not bother.

All amounts are in pounds: the Gibraltar pound is pegged one-to-one to sterling. Conversions to dollars use the rate on 7 October 2026, roughly $1.33 to the pound.

What HEPSS is in plain English and who it is for

HEPSS stands for High Executive Possessing Specialist Skills. In practice it is a tax status for a hired senior executive: the state treats the person as earning exactly 160,000 pounds a year (about $212,300) and taxes only that amount. Everything above it, including bonuses and benefits in kind from the same post, is outside the Gibraltar tax net.

The rules sit in the High Executive Possessing Specialist Skills Rules 2008, secondary legislation under the Income Tax Act 2010. The status is granted by the Finance Centre Director, the official in charge of Gibraltar Finance, the government agency for the financial sector. It is a small, hand-picked club: in August 2026 the HEPSS register listed 233 people (Finance Centre statistics, table FC.9).

It suits:

• an executive hired by a company with a real business in Gibraltar, such as online gaming, insurance, financial services, crypto or fintech;
• someone ready to move and actually live there, not just hold a residence on paper;
• anyone whose salary is well above 160,000 pounds: the higher the pay, the bigger the saving.

It does not suit freelancers and the self-employed without an employing company, specialists paid below the threshold, or anyone planning to retire in Gibraltar. For the last group the only route is Category 2, and its price is set out below.

HEPSS requirements in 2026: salary, role, housing

The key point: the employer applies, not the employee. The certificate names a specific person, a specific company and a specific post, as rules 3 and 4 of the HEPSS Rules make clear.

Tax is calculated under GIBS, the Gross Income Based System, one of Gibraltar's two personal tax systems. On 160,000 pounds it produces exactly 39,940 pounds, a figure confirmed by the Income Tax Office. The employer withholds it monthly under a directive from the Commissioner of Income Tax.

Other Gibraltar-source income, such as rent from a local flat, is taxed in full, at a rate worked out as if the 160,000 pounds were already added on top (rule 8). Passive income such as bank interest and dividends from shares quoted on a recognised stock exchange, on the other hand, is not taxed in Gibraltar at all (Income Tax Act 2010).

How to get HEPSS: step by step

1. Offer and contract. A Gibraltar company offers a post paying more than 160,000 pounds. For residency the contract must run for at least a year.
2. Housing. You rent or buy a flat and Gibraltar Finance approves it. You cannot let it out while the status is in force.
3. HEPSS application. The employer files a written application with Gibraltar Finance, with supporting documents and the fee of about $1,700. The certificate names you, the company, the job title and its functions.
4. Work permit. If you are not a British, EU, European Economic Area (EEA) or Swiss national, the employer first obtains approval in principle for a work permit from the Department of Employment. The fee is about $95; permits run for up to 12 months, or up to 36 months in financial services and gaming.
5. Residence permit. Apply through the residency.gov.gi portal (details in the residency section below). If you need a work permit, you may only start work once your residence card has been issued.
6. Tax. From the first month the employer withholds 3,328.33 pounds of tax plus social insurance.

Neither Gibraltar Finance nor the Department of Immigration and Home Affairs publishes official processing times. Allow time for paperwork, housing approval and the Schengen database check described below.

Gibraltar Category 2 residency: how much money you need in 2026

Category 2 is a tax status for a wealthy individual who lives in Gibraltar on their own means and does not work in the local market. Tax is charged only on the first 118,000 pounds of income, so the annual bill is capped: a minimum of 37,000 pounds (about $49,100) and a maximum of 42,380 (about $56,300). The legal basis is the Qualifying (Category 2) Individuals Rules 2004.

From June 2026 the entry ticket got pricier. Justice, Trade and Industry Minister Nigel Feetham pointed to strong interest in Category 2 following the announcement of the EU treaty. The numbers bear him out: between January and August 2026 the register grew from 327 to 368 people.

The family can live under the same certificate: the holder may elect to treat a spouse's and children's income as their own (rule 11). Children means under-18s or full-time students. A spouse may also hold a certificate in their own right.

How to get Category 2: step by step

1. Check your history. Count your days in Gibraltar over the past 5 years and make sure you did no business there.
2. Proof of wealth. Statements and reports showing net assets of at least $6.7 million, plus an explanation of where the money came from. We cover how to prepare this in our article on source of funds.
3. Housing. Buy or rent, then file the Residential Accommodation Approval form. A copy of the deed or lease goes in with the application or within two months of the certificate being issued.
4. Application. The form to Gibraltar Finance, the fee of about $6,700 and the refundable 42,380-pound advance.
5. Every year. The advance by 30 November, a tax return and an endorsement of the certificate every three years.

The uncomfortable truth is that since June 2026 the status and the right to live in Gibraltar are tied together: the government has stated plainly that anyone who does not keep Category 2 has no right to remain resident. In practice this means either you keep the status for life or you leave in later life.

How much tax you will pay: an example on a 300,000-pound salary

Take a typical HEPSS candidate: a chief product officer at a gaming company on 300,000 pounds a year (about $397,900). This is an illustrative calculation at 2025/26 rates (Gibraltar's tax year runs from 1 July to 30 June), ignoring deductions, reliefs and tax in other countries.

How the Gibraltar figures work: for income above 25,000 pounds the GIBS scale is 16% on the first 17,000, 19% on the next 8,000, 25% on the next 15,000, 28% on the next 65,000 and 25% on the rest (Income Tax Act 2010). For Cyprus: from 1 January 2026 the bands are 0% up to 22,000 euros, then 20%, 25%, 30% and 35% above 72,000 euros, and new employees earning over 55,000 euros are exempt on half their pay for 17 years (Cyprus Income Tax Law as amended for 2026). More on the Cypriot system on our page on taxes in Cyprus.

Bottom line: on a 300,000-pound salary HEPSS saves 35,000 pounds a year against the standard scale and roughly matches Cyprus. The higher the pay, the wider Gibraltar's lead: at 500,000 pounds the tax is still 39,940, or 8%, while the same Cypriot relief would leave a bill of around 90,000 euros. The employer pays 18% social insurance on its side, capped at 56.22 pounds a week, about 2,923 pounds a year.

Other Gibraltar taxes: inheritance, capital gains, property

Gibraltar has no inheritance, gift or wealth tax and no capital gains tax. For individuals there is essentially one exception: certain disposals of residential property in Gibraltar. In his budget speech on 7 July 2026, Chief Minister Fabian Picardo contrasted this directly with the UK, Germany and Spain, where capital and inheritance taxes come on top of income tax.

There is no VAT either, but from 15 July 2026 a Transaction Tax on goods placed on the market replaced import duties. According to the Chief Minister, the rate is 15% in 2026/27, 16% the following year and then no lower than the lowest standard VAT rate in the EU, currently Luxembourg's 17%. In daily life that means goods gradually getting dearer, not a tax on your income.

Buying a flat attracts stamp duty. On the general scale, without the reliefs for first- and second-time buyers, a purchase above 800,000 pounds pays 3% on the first 350,000, 3.5% on the next 450,000 and 4.5% on the balance (Stamp Duties Act 2005). Example: a $2 million flat means 57,750 pounds of stamp duty (about $76,600).

Category 2 also brings a trust bonus: section 13 of the Income Tax Act treats the holder, their spouse and children as non-resident for trust purposes, so a trust whose beneficiaries are only your family does not become resident in Gibraltar. More in our article on trusts and foundations in Gibraltar.

How to get Gibraltar residency in 2026 and where to live

A tax status and the right to live in Gibraltar are separate documents: HEPSS and Category 2 come from Gibraltar Finance, while the residence permit comes from the Department of Immigration and Home Affairs. From 6 October 2025, new long-term residency registrations for British and EU citizens were put on an administrative pause, lifted only by the new rules, which apply to everyone applying on or after 6 October 2025.

Those rules are the Residency Regulations 2026, published as Legal Notice No. 166 of 2026. They have applied since 14 July 2026, and applications go through the residency.gov.gi portal. The government stresses that the regulations do not mention nationality at all: the criteria are the same for a Briton, a Spaniard or anyone else. The portal sets out no separate route for Category 2 holders: the government has tied their right to live in Gibraltar directly to keeping the status. The main route is employment, and for a HEPSS holder it looks like this.

• An employment contract of at least one year paying no less than Gibraltar's average earnings: 37,500 pounds in 2026 (about $49,800). A HEPSS salary clears this easily.
• Housing. A rental must be your main home for at least 12 months and not a holiday let; a property you own cannot be let while you hold the permit.
• Age 55 or under. Older applicants only at the Chief Minister's discretion, where residence is in Gibraltar's interest. Such residents have no entitlement to Elderly Residential Services.
• An official vetting form, a police check, from the country where you last lived.
• A work permit if you are not a British, EU, EEA or Swiss national: approval in principle for the employer first, then the residency application.

The fees are modest next to the tax saving: about $340 per application, the same per dependant and about $30 for the annual renewal. If your spouse is included, you pay a deposit equal to the first year's social insurance contributions under your contract, currently about $2,900, refunded when you leave. Living in Gibraltar without a valid permit can cost a fine of about $3,400.

Residency gives you and your immediate family healthcare through the group practice medical scheme and schooling for the children, but not elderly care, housing or other social benefits. Category 2, as noted, carries no right to public healthcare or schools. The permit is tied to the job: if your employment ends, it lapses automatically 16 weeks after the notice of termination is filed, unless you produce a new contract in the meantime.

The road to permanent status has doubled in length. Gibraltarian Status, which carries the full set of rights and public services, now requires 20 years of residence for anyone who became resident on or after 6 October 2025, instead of 10, and only British citizens can apply. The change comes from the Gibraltarian Status (Amendment) Act 2026 (Act No. 27 of 2026), which replaced ten years with twenty in section 9(f) of the Gibraltarian Status Act.

Housing: what to check before you sign

Gibraltar Finance approves the accommodation for both statuses, so do not sign a long lease or pay a deposit until you know the property will pass. There is almost no spare land, and the supply of premium homes is likely to struggle to keep pace with demand. We handle property checks and stamp duty calculations as part of our Gibraltar property service.

The UK-EU Treaty on Gibraltar: what changes for residents

On 14 July 2026 the UK and the EU signed the Treaty on Gibraltar in Brussels, and from 15 July it has applied provisionally, pending ratification. For residents it is the news of the decade: there are no more immigration checks at the land border with Spain, and a Gibraltar residence permit works in Schengen like a residence permit from any Schengen state.

• Schengen without a visa. A Gibraltar residence permit holder can travel across the Schengen Area visa-free for up to 90 days in any 180, and time spent in Gibraltar itself does not count towards that limit.
• No EES or ETIAS. Residents are exempt from the EES (Entry/Exit System, the EU's fingerprint and photo register) and from ETIAS (the electronic travel authorisation), and their passports are not stamped.
• Schengen database check. Gibraltar alone still issues and renews permits, but each applicant is checked, via Spain, against the Schengen Information System. A refusal on this ground is possible only where the person poses a genuine and sufficiently serious threat, for example an entry ban alert on security grounds.
• Visas for visitors. Gibraltar is gradually aligning its visa list with the EU. Nationals who need a Schengen visa now also need a Schengen short-stay visa to visit Gibraltar; if Gibraltar is the main destination, Spain issues it. Exemptions for holders of UK visas no longer apply.
• Airport. The treaty allows flights from anywhere in the EU and Schengen, not just Spain; passengers go through dual checks, Gibraltar and Schengen.
• Tax. Import duties have given way to the Transaction Tax covered above. Earlier still, on 28 June 2026, Spain removed Gibraltar from its tax haven list, where it had sat since 1991.

Gibraltar is no longer an island behind a fence: English-style law and an income tax bill of no more than 42,380 pounds now come with everyday access to Spain and Schengen. That is why the government tightened entry at the same time, openly saying it wants to protect housing, hospitals and schools from a rush of newcomers.

A word on a question people often search for: can you enter Gibraltar with an EU residence permit? Under the treaty Gibraltar reciprocates for people legally resident in Schengen states: they need no short-stay visa, but the 90-in-180-day rule and the general entry conditions apply. A permit from an EU country outside Schengen, such as Cyprus or Ireland, is not covered.

Gibraltar vs Malta, Cyprus, Italy, Switzerland and Monaco

For a salaried senior executive, Gibraltar is one of the most rewarding tax regimes in Europe; for someone living off capital, it is far from the cheapest: $6.7 million of net worth puts it in the same bracket as elite programmes, and housing is scarce. Key parameters in 2026:

Sources: tax legislation of Malta, Cyprus and Italy, the Gibraltar rules, and our own analysis of taxes in Switzerland and residency in Monaco. More detail: taxes in Malta, Malta residency, Italy residence permit, Monaco residence permit.

How to choose. If you are a salaried executive earning 300,000 pounds or more, HEPSS delivers one of the lowest total tax bills in Europe. On 200,000-280,000 pounds, by our calculation, the Cypriot 50% relief may come out ahead, but that means a different country and a different job market. If you are an investor with $2.3-5.7 million, Gibraltar has been closed to you since June 2026, and Malta before the end of 2026 or Cyprus are more realistic. If your foreign income runs into millions a year, Italy's flat 300,000 euros may work better, and Monaco if you want zero and can pay for the housing. Our overview of taxes in Europe in 2026 gives the full picture.

Pitfalls and who Gibraltar is not for

Your home country's tax residency still applies. Gibraltar treats as tax resident anyone who spends 183 days in a tax year, or more than 300 days over three consecutive years, on the Rock (section 74 of the Income Tax Act 2010). But a Category 2 certificate does not stop another country from claiming you as its resident: Gibraltar Finance warns explicitly that the status offers no shield. For anyone leaving Russia, that means the Russian Tax Code's 183-days-in-12-months rule and, for as long as you remain a Russian tax resident, tax and reporting on controlled foreign companies (CFCs). We explain how to avoid dual residence in our article on tax residency and the 183-day rule, and handle CFC reporting through our controlled foreign companies service.

Living in Spain while registered in Gibraltar will not work. The Spain-UK tax agreement on Gibraltar, in force since 4 March 2021, closed that loophole. Spanish nationals who moved to Gibraltar after 4 March 2019 remain Spanish tax residents. Foreigners are caught too: in an example from the Gibraltar Income Tax Office's guidance, someone who lived in Spain throughout 2022 and moved to Gibraltar right after remains a Spanish tax resident from 2023 to 2027 inclusive. In a residence dispute there is a presumption in Spain's favour, which can only be rebutted by a permanent home in Gibraltar where you genuinely live for more than 183 days a year.

Few double tax treaties. Gibraltar has two: with the UK, plus the tax agreement with Spain (Gibraltar Finance). There are none with Russia, Kazakhstan, Ukraine or most other countries, so you may not be able to credit Gibraltar tax at home.

Age and the job link. The 55 age cap for residency hits exactly the senior executives HEPSS targets: an exemption is possible, but it is the Chief Minister's call. HEPSS is issued for a specific company and post, so a change of employer means starting over, and the residence permit lapses 16 weeks after the job ends unless there is a new contract.

Category 2 is a status for life. Losing it means leaving, and a new resident needs 20 years before Gibraltarian Status.

Gibraltar is not for: people looking for permanent residency or a passport by investment; retirees with less than $6.7 million; the self-employed who want to work for themselves without an employing company (HEPSS is filed only by a company for its executive, and Category 2 all but rules out local work); families who need free schools and healthcare under Category 2; and anyone not ready to actually live there. If all you want is low tax without moving, start with our country tax overview.

How we can help

We handle a move to Gibraltar end to end: from the company and trust to the bank account, housing and a tax plan for the country you are leaving. Legal representation in Gibraltar is provided by our partners holding local licences.

How Gibraltar trusts and foundations work and what they cost in 2026 is covered in detail in our article on trusts and foundations in Gibraltar.

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