Gibraltar Raises Wealth Threshold for Category 2 Residency to £5 Million as Treaty Takes Effect

Gibraltar is increasing the minimum wealth requirement for Category 2 residency status from £2 million to £5 million. The new threshold takes effect on July 15, the same date the UK-EU Treaty is due to take provisional effect and incorporate the territory into the EU's Schengen zone. The treaty removes the land frontier between Gibraltar and Spain.

Gibraltar temporarily suspended new Category 2 applications from British and EEA nationals last year after more than 3,000 people relocated to the territory between 2022 and 2024. Application fees for the status are rising from £1,233 to £5,000. Trade minister Nigel Feetham said the government is seeing strong interest in Category 2 status following the treaty announcement.

Feetham stated the regime must remain aligned with Gibraltar's broader economic objectives and the opportunities arising from the treaty. He added that the reforms would support Gibraltar's strategic direction while maintaining the territory's competitive position. Paul Correa of Fiduciary said the tighter rules could kill off high-net-worth relocation to Gibraltar.

Louis Montegriffo of BMI Group said the increase was intended to manage volumes, noting that around one percent of the UK population is worth about £2 million. Category 2 residents are taxed only on the first £118,000 of annual income, with a maximum tax liability of around £37,000. Gibraltar does not levy capital gains tax, inheritance tax or VAT.