Residents of Gibraltar pay 0% tax on savings interest

chucknorris

I just became aware a few days ago that residents of Gibraltar do not pay tax on interest from savings accounts. Has that been a driving force for anyone from this website to move there?

I believe if you have 2 homes one there and here, you can be calssed as living over there for tax puposes providing you are out of the country for at least 183 days a year, does anyone know if there are any complications, or is it really that simple?

Pennywise

chucknorris wrote: »

or is it really that simple?

No of course it isn't.

If you're domiciled and resident in the UK, buying a house abroad and staying out of the uk for the right number of days ISN'T enough. There has to be intent to reside abroad permanently. If you keep your UK home, keep a UK job, regularly return to the UK etc., then HMRC will argue you don't have the intent to permanently leave the UK. There is a classic court case of a BA pilot who tried it and failed because he kept his home in the UK (he tried to argue that South Africa was his "new" residence I think and it didn't work because he still used his previous UK home occasionally, was employed by a UK firm and visited the UK a lot).

Also Gibraltar, like the other tax havens tend to be expensive in terms of housing and living costs, often are very difficult to be allowed entry to live & work, and often have flat fee taxes.

It's an expensive way of avoiding a bit of tax on interest!!!

chucknorris

Pennywise wrote: »

No of course it isn't.

If you're domiciled and resident in the UK, buying a house abroad and staying out of the uk for the right number of days ISN'T enough. There has to be intent to reside abroad permanently. If you keep your UK home, keep a UK job, regularly return to the UK etc., then HMRC will argue you don't have the intent to permanently leave the UK. There is a classic court case of a BA pilot who tried it and failed because he kept his home in the UK (he tried to argue that South Africa was his "new" residence I think and it didn't work because he still used his previous UK home occasionally, was employed by a UK firm and visited the UK a lot).

Also Gibraltar, like the other tax havens tend to be expensive in terms of housing and living costs, often are very difficult to be allowed entry to live & work, and often have flat fee taxes.

It's an expensive way of avoiding a bit of tax on interest!!!

Not really expensive as we planning to eventually buy a second home in Spain and living there anyway for the British winter, so merely diverting to Gibraltar would be no big deal. The bit of interest would be 20-30k a year, but probably more towards the lower end, it depends how much money I keep in cash. But the point is if Gibratlar offered a 20k incentive then it has to look better than Spain. We could even just remain in Gibraltar for the first few years.

I've looked at Gibraltar properties and it appears you can get a decent 2 bed flat for under 250k so not that expensive at all, the problem may be that we would prefer to live in a villa in Spain.

Cook_County

chucknorris wrote: »

Not really expensive as we planning to eventually buy a second home in Spain and living there anyway for the British winter, so merely diverting to Gibraltar would be no big deal. The bit of interest would be 20-30k a year, but probably more towards the lower end, it depends how much money I keep in cash. But the point is if Gibratlar offered a 20k incentive then it has to look better than Spain. We could even just remain in Gibraltar for the first few years.

I've looked at Gibraltar properties and it appears you can get a decent 2 bed flat for under 250k so not that expensive at all, the problem may be that we would prefer to live in a villa in Spain.

I see no evidence of ceasing UK residence as you would not be settled in Gibraltar. The interest would remain UK taxable.

chucknorris

Cook_County wrote: »

I see no evidence of ceasing UK residence as you would not be settled in Gibraltar. The interest would remain UK taxable.

If we did this I have realised that now which is why I would probably sell up here and live in Gibraltar only for 2-3 years first before starting to come back for a few months. I think it would be very hard for the inland revenue to argue that I live here if I don't even have a home here and haven't been in the country for more than a few weeks and stayed in holiday accommodation (ie a genuine holiday visit only)

I also think I would only come back for about 3 months rather than 6 (about 90 days so not exceeding their 91 day rule) as the better weather would be over there anyway for those extra 3 months, it's only the very hot weather I would wish to escape.

However the reason I started with 'If we did this' is because there is a the problem that the property over in Gibraltar as it seems to be 99% apartments and I don't think we would wish to compromise our retirement expectations, so it is more likely we will just revert to our Spain idea where we can have a nice private villa and live in a bit more luxury and just pay the UK tax, afterall we can't take it with us. Or to put it another way my wife has said there is no way she is going to live in a flat in Gibraltar over a villa with a pool in Spain just to save up to 30k tax per year. So that more or less kills the idea (I can see her point though)

John_Pierpoint

Ah yes I see what you mean - not the Gib I remember from 25 years ago. High taxes on the mainland have turned it into a cross between Monaco & Dubai.
(Once upon a time I stayed in the French Chateau of a nice bloke from Barking who had managed to set himself up as a resident of Monaco)

How about the Canary Islands or taking a punt on North Cyprus?