A Gibraltar holding company pays no tax on dividends from other companies, on most interest or on capital gains, and Gibraltar levies no withholding tax on dividends it pays out. The main exceptions are royalties, inter-company interest above £100,000 a year and gains on Gibraltar property portfolios, which are taxed at the 15% corporate rate.
At a glance
| Income or event | Gibraltar treatment as of October 2026 |
|---|---|
| Dividends received from any company | Not taxed |
| Bank and most other interest | Not taxed |
| Inter-company loan interest | Taxed at 15% where above £100,000 a year |
| Royalties | Taxed at 15% |
| Capital gains on shares and investments | Not taxed (Gibraltar property portfolio rule from 2025) |
| Withholding tax on dividends, interest, royalties paid | None |
| Stamp duty on share transfers | Fixed £10 per transaction, unless the company holds Gibraltar real estate |
Why use a Gibraltar holding company?
Families and family offices use Gibraltar companies to hold listed portfolios, private company stakes, funds, intellectual property and, sometimes, real estate. The attractions are a short list of taxable income types, no capital gains tax, no withholding tax, English-based company law and a professional company management industry regulated by the Gibraltar Financial Services Commission (GFSC).
A holding company often sits beneath a trust or foundation, so that the succession vehicle owns one company rather than dozens of assets. The family offices guide shows how these layers usually fit together.
How are dividends received by a Gibraltar company taxed?
They are not taxed. Gibraltar’s Income Tax Act 2010 does not charge tax on dividends a Gibraltar company receives from any other company, whether in Gibraltar or abroad. There is no minimum shareholding, holding period or subject-to-tax test, which is why Gibraltar has no formal participation exemption: none is needed.
Two cautions apply. Foreign withholding tax deducted at source on dividends is usually a final cost, because Gibraltar has very few double tax treaties to reduce it. Its only comprehensive double tax agreement is with the UK (signed 2019, in force 2020); the 2019 UK–Spain agreement mainly settles residence and information exchange, and the rest are information exchange agreements. And the source country may deny reduced rates under its own anti-abuse rules.
How are interest, royalties and other passive income taxed?
Gibraltar taxes on a territorial basis: income is taxable only if it accrues in or derives from Gibraltar. For holding companies, the practical rules as of October 2026 are:
- Bank and portfolio interest. Not taxed, unless the company is a licensed bank, lender, insurer or DLT firm earning interest as part of its trade.
- Inter-company loan interest. Taxable at 15% where it exceeds £100,000 a year, and deemed Gibraltar-source when received by a Gibraltar company. Below that level it is exempt. The legislation applies the test to interest received from any one company, with connected companies counted together, although some firms describe it per loan. The 2013 government announcement suggests only interest above the limit is taxed, but confirm the calculation with your tax adviser if you are near it.
- Royalties. Taxable at 15% and deemed Gibraltar-source when received by a Gibraltar company.
- Rental income from Gibraltar property. Taxable at 15%. Foreign rental income is generally foreign-source.
- Fund distributions. Treated according to their legal form, as dividends or interest.
Does Gibraltar tax capital gains in a holding company?
There is no general capital gains tax, so gains on shares, bonds and funds are not taxed. Selling shares in a Gibraltar company is also outside Gibraltar tax unless the company owns Gibraltar real estate.
Since 1 January 2025, profits on sales of Gibraltar property are taxable where a person directly or indirectly holds five or more taxable properties, or has held five or more over five consecutive tax periods. This catches indirect sales of shares in property-holding companies, with anti-avoidance rules for structures designed to stay under the threshold. Investors in Gibraltar residential property should take specific advice.
How are dividends paid out of the company taxed?
Gibraltar does not withhold tax on dividends, interest or royalties paid by companies, so a holding company can distribute to a non-resident shareholder, trust or foundation without Gibraltar tax.
For Gibraltar-resident individual shareholders, dividends are taxable to the extent they come from profits that were taxable in Gibraltar, with credit for corporation tax already paid. Dividends from companies listed on a recognised stock exchange are not taxed, nor are dividends from a company that has no Gibraltar-taxable income.
There is an important exception for newcomers. Since July 2022, residents who are not Gibraltarian and who hold neither Category 2 nor HEPSS status, and are not in genuine third-party employment, are taxed on their savings and passive income, including dividends. If you plan to move to Gibraltar and hold investments through a company, read Category 2 residency explained first. KPMG, Sovereign and Hassans all describe the charge as covering pension income as well as interest and dividends, taxed without the benefit of lower bands.
Substance, CFC and anti-avoidance rules
Gibraltar has no standalone economic substance law for holding companies, according to ISOLAS’ 2025 corporate tax review. Substance still matters, for three reasons:
- Controlled foreign company rules. Gibraltar’s CFC regime applies where a Gibraltar company controls more than 50% of a low-taxed entity and targets non-genuine arrangements, judged by where significant people functions sit. Small entities are excluded (accounting profits up to €750,000 and non-trading income up to €75,000, or profits up to 10% of operating costs).
- Interest limitation and thin capitalisation. Borrowing costs are limited to the higher of 30% of EBITDA or €3 million, and a 5:1 debt-to-equity ratio applies to connected-party lending.
- General anti-avoidance. Arrangements that are artificial or fictitious can be disregarded.
Your home country’s rules usually bite harder. UK, Spanish and other CFC and management-and-control rules can tax a Gibraltar company’s income in the shareholder’s country if it is really run from there.
The Spain rule for Gibraltar companies
The UK–Spain tax agreement, in force since March 2021, treats a Gibraltar company incorporated after 16 November 2018 as Spanish tax resident if any one of these applies:
- Most of its assets, directly or indirectly, are in Spain.
- Most of its income comes from Spanish sources.
- Most of its effective managers are Spanish tax residents.
- Most of its capital, votes or profit rights are held, directly or indirectly, by Spanish residents.
A family with Spanish-resident members or Spanish assets therefore needs careful design before using a Gibraltar holding company. The same tests apply to trusts and foundations.
What else should you budget for?
Each company must keep accounts, file annual returns with Companies House Gibraltar and report its ultimate beneficial owners to the Register of Ultimate Beneficial Owners within 30 days of incorporation and of any change. Published provider prices as of 2026 put formation of a simple company at about £800 to £1,200, and company management, registered office, secretary and filings at roughly £2,000 to £3,500 a year; local directors, accounts and any audit cost extra. See Gibraltar corporate tax explained for rates and filing rules, and how to set up a company in Gibraltar for formation steps. A company with Gibraltar-assessable income of £1.75 million or more must file audited accounts with its tax return; below that, accounts with an independent accountant’s report are enough, and a small company with no assessable income can file an abridged balance sheet.
What changed with the 2026 UK–EU treaty and Budget?
The 2026 Budget, delivered on 7 July 2026, kept corporation tax at 15% and income tax rates unchanged, and replaced import duty with a transaction tax on goods. Neither the Budget nor the UK–EU treaty, applied provisionally from 15 July 2026, changed how holding companies are taxed on dividends, interest or gains. The treaty does commit Gibraltar to a state aid regime comparable to the EU’s, and a UK declaration says selectivity of tax measures is judged within Gibraltar’s own territory; advisers’ summaries report no direct change to how holding companies are taxed. Large groups with revenue of €750 million or more are separately subject to Gibraltar’s Pillar Two minimum tax. For the wider picture, see the wealth and family office hub.