Entrepreneurial UK Tax-Payers Welcome In Sunny Gibraltar
As soon as the Budget announced a shock 50% rate of income tax for high earners, the phones rang off the hook in the Sales Department of Gibraltar’s Ocean Village. British entrepreneurs are eyeing up a tactical emigration and the message from the Rock is very clear – taxes are not going up, they’re going down.
Brian Stevendale, Sales & Marketing Director of Ocean Village, Gibraltar’s leading mixed-use marina development, comments, “Since last Wednesday’s Budget it would appear that a mass UK exodus is on the cards with top-earners affronted by the 50% rate and myriad of stealth taxes. We’re working overtime to keep up with enquiries for residential and commercial space within the Ocean Village complex.”
Brian continues, “Life traders contacted me within an hour of the Budget telling me they wanted to relocate to Gibraltar. We already have the highest concentration other than London in this sector. I had our architects draw up plans for offices, the client flew over from London on Friday and we closed the deal there and then. This is simply the tip of the iceberg.”
This Union Jack-flying territory 7km² in size and 28,000 in population has the familiarity of Marks & Spencer’s, British pubs and the busiest store in the entire Morrison’s chain – but the welcome addition of year-round sunshine as well as fantastic golf and beaches across the border in Spain. And, with Gibraltar law similar to that of the UK, the system is both efficient and fast and holds few surprises. There is no capital gains tax, no VAT, no inheritance tax, no wealth tax, no exchange control costs and with sterling as a currency, the near pound-euro parity problem doesn’t come into play.
Whilst some feel that the UK is sending out a message that entrepreneurs are not welcome, Gibraltar actively encourages them. The Government is keen to focus on tax breaks rather than tax hikes and its economy is thriving as a result. As the UK faces a sharp 3.5% contraction in 2009, Gibraltar has a predicted growth in GDP of 7% and looks to thriving industry rather than tough taxation to keep its balance sheet healthy.
Brian adds, “The European Court of Justice granted Gibraltar self-determination on company tax in December last year allowing the Government to target around 10% or less company tax – the lowest or equal lowest in the European Union. Meanwhile income tax for the wealthy is between £18,000 and £21,000 a year – on all global income. UK-based financial adviser Peter Hargreaves has been widely quoted in the press as paying £13 million in tax last year and angry at the prospect of an extra £500,000 next. Had he been part of the Gibraltar tax system his bill would be down by almost £13 million.”
Brian concludes, “Wealthy businessmen can apply to the Gibraltar Government for low rate personal tax status and providing they can prove minimum liquid assets and have a property on the Rock it’s fairly straightforward. Meanwhile with a UK or EU passport and the right advice you can set up a business in an hour and start enjoying the associated fiscal benefits. Gibraltar could quite easily become the new Monaco but with reassuring links to the UK and far less daunting property prices.”
With an economy already buoyed by booming finance and online gaming industries, interest from the latter is set to explode as the UK Government also chose to increase tax on poker profits from 15% to 50%. Companies such as Gala, William Hill, Ladbrokes, PartyGaming and Betfred are rushing through expansion plans for Gibraltar. Employees earning over £100,000 and working for these types of companies that are based in Gibraltar but benefit outside of the Rock can also take advantage of a flat £15,000 annual income tax. No wonder Ocean Village is overwhelmed by requests for homes and offices. Would the last millionaire to leave Britain please turn the lights out…
About Ocean Village – Ocean Village is a mixed-use waterfront development of four residential plazas, office space, a marina and retail and leisure units including a flagship Gala Casino complex. The company has just launched Little Venice Waterside Mansions and Villas – a range of 30 individually designed homes built in the heart of the marina surrounded by water. Each of the three storey prestigious homes enjoys its own swimming pool, banqueting terrace and private mooring for the superyacht. Prices from £800,000 to £6million. Royal Ocean Business Plaza offers 10,000m² of high-end offices alongside 600 secure car parking spaces. This unique facility in a superb location makes for the perfect recipe for doing business in the 21st century.
News submitted by Sarah Drane, Oceanvillage.gi