Gibraltar

Allowance Based System: Personal allowances and deductions

Allowance Based System allowances

Personal relief is granted on submission of a claim to the tax office when applying for a tax code under the Allowance Based System (see the Taxes on personal income section). The main allowances (which are reduced by 1/12 for each complete calendar month that the individual is not resident in Gibraltar during the year of assessment) for the 2024/25 tax year are as follows:

Notes:

1. This is a one-off allowance.
2. This allowance is restricted to a maximum of GBP 1,000 per annum. In addition to any deduction, relief, or allowance, taxpayers with an interest in a building situated in Gibraltar can claim an allowance for approved expenditure on painting, decorating, repairing, or enhancing the frontage of the building.
3. Allowable premiums up to 1/7 of assessable income or 7% of capital sum assured.
4. Interest payable on a loan to acquire a Gibraltar property to be used as a taxpayer’s principle residence is allowable on loans up to a value of GBP 350,000. Loan arrangements entered into before 1 July 2008 are eligible for relief on 100% of the loan as long as the loan continues to be secured on the current property and is in the name of the current borrower. The interest on these loans are subject to ‘tapered grandfathering’, whereby the relief on the amount of the loan in excess of GBP 350,000 will be reduced by 1/10 per annum.

Allowance Based System deductions 

In addition to the above allowances, individuals taxed under the Allowance Based System may also deduct expenses from their assessable income on the following:

• Pension contributions paid to approved schemes, subject to restrictions.
• Premiums paid on health insurance policies (up to a maximum of GBP 5,395).

Gross Income Based System: Deductions

Persons under the Gross Income Based System may also benefit from deductions from their assessable income, as follows:

• Up to a maximum of GBP 1,500 per annum in respect of approved mortgage interest payments.
• Up to a maximum of GBP 1,500 per annum in respect of pension contributions.
• Up to a maximum of GBP 5,000 in respect of approved expenditure incurred on the enhancement of the frontage of their property.
• Up to a maximum of GBP 7,500 in respect of approved expenditure incurred towards the purchase of their home (this benefit is available to first-time home buyers only).
• Up to a maximum of GBP 3,000 per annum in respect of expenditure incurred towards private medical insurance premiums.
• Up to a maximum of GBP 6,000 over two years in respect of expenditure incurred towards the installation of solar energy for boilers.

Business deductions

There are no significant deductions allowable to individuals not engaged in a trade. Travel to and from work is not regarded as a business expense, nor are moving, motor, or entertainment expenses unless they fall within the guidelines published by the Commissioner of Income Tax.