Gibraltar Residency: Cat 2 and HEPPS Explained
29 Nov 2023
Gibraltar has two specialist tax-status regimes for qualifying individuals: Category 2 status and Higher Executive Possessing Specialist Skills (HEPSS) status. They are designed for different circumstances. Category 2 is aimed at qualifying high-net-worth individuals, while HEPSS is linked to senior employment requiring specialist skills.
Both regimes provide a specific method of calculating Gibraltar income tax, but eligibility depends on meeting the conditions of the relevant regime. They should also be distinguished from ordinary Gibraltar residence, which is a separate concept.
What Is Category 2 Status in Gibraltar?
Category 2 status is a special tax regime for qualifying high-net-worth individuals. A person must have approved residential accommodation in Gibraltar available for their exclusive use for the relevant year of assessment, meet the applicable previous-residence condition and obtain a Category 2 certificate from the Finance Centre Director.
A Category 2 individual is taxed under Gibraltar's Allowance Based System. Gross assessable income is currently capped at £118,000 for the regime. The current minimum annual tax liability is £37,000, while the maximum is £42,380. For individuals with substantial assets and more complex personal structures, family office services may also be relevant to wider wealth and administrative arrangements.
2026 Changes to Category 2
Gibraltar announced changes to the Category 2 regime in 2026. For new applicants, the minimum net wealth requirement is being increased from £2 million to £5 million, while the application fee is increasing from £1,233 to £5,000.
Existing Category 2 individuals are being grandfathered and are therefore not subject to the revised minimum wealth requirement. The reforms also clarify the conditions relevant to maintaining Category 2 status.
What Is HEPSS Status?
HEPSS stands for Higher Executive Possessing Specialist Skills. It is an employment-based tax status for individuals occupying qualifying senior executive positions where their specialist skills are considered important to Gibraltar's economic activity.
Unlike Category 2, HEPSS is directly connected to the individual's employment. The status requires a certificate under the HEPSS rules, and the individual's employment must meet the applicable conditions.
HEPSS individuals are taxed under Gibraltar's Gross Income Based System, with gross assessable income currently capped at £160,000. The current annual tax liability is £39,940.
Category 2 vs HEPSS
The two regimes differ mainly in the basis on which an individual qualifies.
| Category | Category 2 | HEPSS |
| Main basis | Qualifying high-net-worth status | Qualifying executive employment |
| Tax system | Allowance-based System | Gross Income Based System |
| Assessable income cap | £118,000 | £160,000 |
| Current annual tax liability | £37,000–£42,380 | £39,940 |
| Employment-based | No | Yes |
| Certificate required | Yes | Yes |
Category 2 is primarily concerned with the individual's qualifying status and financial position. HEPSS is tied to a specific executive role and specialist skills.
Gibraltar Residence and Special Tax Status
Special tax status should not be confused with ordinary residence in Gibraltar. For ordinary residence purposes, an individual is generally considered ordinarily resident if they are present in Gibraltar for at least 183 days in a year of assessment or for more than 300 days over three consecutive years.
Category 2 and HEPSS have their own eligibility requirements. A Category 2 applicant must meet specific accommodation and previous-residence conditions, while HEPSS is connected to qualifying employment and specialist skills.
This distinction is also relevant when considering international tax residence. Holding a special Gibraltar tax status does not automatically determine an individual's tax residence for every international tax purpose.
Which Gibraltar Tax Status Is Right for You?
The appropriate regime depends on the individual's circumstances. Individuals reviewing their tax status, relocation plans and personal financial arrangements may also benefit from private client services.
Category 2 is relevant to qualifying high-net-worth individuals who meet the financial, accommodation and other statutory requirements. HEPSS is relevant to senior executives whose specialist skills and employment meet the requirements of the HEPSS regime.
The 2026 changes to Category 2 are particularly important for new applicants because the minimum wealth requirement and application fee have increased. Anyone considering a move to Gibraltar should assess the current eligibility requirements before applying.
Professional Advice on Gibraltar Residency
Choosing between Category 2 and HEPSS requires an assessment of the individual's circumstances, including financial position, employment, accommodation and intended residence in Gibraltar. The applicable tax status should be established before making decisions about relocation or restructuring personal affairs.
Professional advice can help individuals determine which requirements apply to them and coordinate the tax and residence aspects of a move to Gibraltar. Gibro advises private clients on Gibraltar tax and residency matters and can provide support based on individual circumstances.
Frequently Asked Questions
Category 2 is not based on holding a particular employment position. An individual's employment circumstances should still be considered when assessing their overall tax and residency position.
HEPSS is an employment-based status, so the nature of the individual's employment and the role performed in Gibraltar are central to the application. The specific employment arrangement must satisfy the requirements of the HEPSS regime.
The two regimes have different eligibility criteria and tax mechanisms. An individual should establish which regime applies to their circumstances rather than assuming that both statuses can be used simultaneously.
Category 2 status applies to the qualifying individual. The tax and residence position of spouses, partners or dependants needs to be considered separately according to their own circumstances.
HEPSS is linked to the qualifying individual's employment and tax status. Family members do not automatically acquire the same tax status simply because one member of the household has HEPSS status.
No. Category 2 is an individual tax status based on the applicant meeting the relevant requirements. It cannot simply be transferred between individuals.
Because HEPSS is connected to qualifying employment, a change of employer can affect the individual's eligibility. The new employment would need to be assessed against the applicable HEPSS requirements.
Changes to accommodation, residence or other circumstances relevant to the Category 2 requirements may affect continued eligibility. The individual should assess any material change against the current requirements of the regime.
Category 2 requires qualifying residential accommodation in Gibraltar. An applicant's actual residence arrangements therefore need to be consistent with the conditions attached to the status.
No. Seniority alone is not sufficient. The position must satisfy the requirements of the HEPSS regime, including the requirement concerning specialist skills and their importance to Gibraltar's economic activity.
No. Category 2 is a specialist tax status. It should not be treated as a general immigration or permanent-residence status.
Yes. Gibraltar's tax legislation and the rules governing special tax statuses can be amended. Individuals considering an application should therefore assess the requirements and tax treatment applicable at the time they apply.