A Gibraltar private foundation is a registered legal entity run by a council that must include a licensed Gibraltar corporate councillor. A trust is a private relationship with no legal personality, in which trustees hold assets for beneficiaries. Both are taxed at 15% only on Gibraltar-source income when a Gibraltar resident can benefit, and neither faces capital gains or inheritance tax.
At a glance
| Point | Short answer (October 2026) |
|---|---|
| Governing law | Private Foundations Act 2017; Trustee Act 1895 and related trust statutes |
| Legal personality | Foundation: yes. Trust: no |
| Mandatory licensed party | Foundation: Class VII licensed Gibraltar corporate councillor. Ordinary trust: none required by law |
| Public register | Foundation: yes, at Companies House Gibraltar. Trust: no public register |
| Tax rate if resident | 15% on Gibraltar-source taxable income for both |
| Capital gains, inheritance tax | None for either |
| Best fit | Foundation: civil law families wanting a corporate-style entity. Trust: common law families wanting flexibility and privacy |
Side-by-side comparison
| Feature | Private foundation | Trust |
|---|---|---|
| What it is | A body corporate with no shareholders or members | An obligation on trustees to hold assets for beneficiaries or purposes |
| Who owns the assets | The foundation itself | The trustees, as legal owners |
| Set up by | Founder signs a charter (a deed) and registers it | Settlor transfers assets to trustees under a trust deed or declaration |
| Management | Council of councillors | Trustees |
| Licensed party required | Gibraltar-resident company with a Class VII licence on the council at all times | Not for ordinary trusts; purpose trusts need at least one licensed trustee |
| Oversight role | Guardian, mandatory in some cases (for example no named beneficiaries, more than 50 ascertainable class members, or disenfranchised beneficiaries) | Protector, optional |
| Settlor or founder control | Limited reserved powers, listed in the Act, set out in the charter | Depends on the deed; too much retained control can undermine the trust |
| Commercial activity | Only incidental to its purposes; may own trading companies | Trustees can hold trading companies; trust itself is not a trader |
| Duration | Indefinite or fixed term, stated in the charter | Up to 250 years for ordinary trusts; no perpetuity limit for purpose trusts |
| Registration | Mandatory, with the Registrar of Foundations | No public registration; optional entry on the Registered Trust index |
| Public information | Name, number, date, councillors, guardian, registered office | None |
| Accounts | Annual accounts delivered to the Registrar | Trustee records; no public filing |
| Regulatory reporting | Beneficial ownership rules (see below) | Trustees report to the GFSC under the Trusts (Information) Regulations 2025 |
| Migration | Can migrate in or out if the charter and home law allow | Can change proper law or trustees if the deed allows |
How does a Gibraltar private foundation work?
The founder endows initial assets, which become irrevocably the foundation’s, and signs a charter stating its name, purposes, endowment, duration and Gibraltar governing law. Optional foundation rules can add detail. Registration is made on Form FND01 to the Registrar of Foundations, who is the Registrar of Companies, together with councillor and guardian consents and a notarised declaration that the assets are at the council’s disposal.
The council manages the assets and makes distributions under the charter and rules. Beneficiaries can be named individually or as a class. Unless the charter says otherwise, a beneficiary is “enfranchised”, which gives them a right to copies of the constitutional documents and records and to object in court to some changes. The charter can instead make beneficiaries disenfranchised, which is when a guardian becomes mandatory.
The Act sets no minimum endowment. Companies House Gibraltar charges £100 to register a foundation and £103 for each annual return filed on time, under its fee table updated August 2025.
How does a Gibraltar trust work?
A trust has no separate existence. The settlor transfers assets to trustees, who become the legal owners and must deal with them for the beneficiaries under the deed and general trust law. A letter of wishes can guide trustees without binding them.
Gibraltar trust law is closely modelled on English law, with additions: asset protection trusts, non-charitable purpose trusts, private trust companies and statutory firewall protection against foreign forced heirship and matrimonial claims. Our guide to Gibraltar trusts for international families covers each in detail.
Which gives the family more control?
Neither gives unlimited control, by design. A Gibraltar founder can reserve only the powers the Act allows: to amend the charter or purposes, and to appoint or remove councillors and guardians. Those powers last for the founder’s life, or for 30 years if the founder is a company. A founder may also be a councillor, guardian or beneficiary.
With a trust, control is shaped by the deed, the choice of trustee and, often, a protector. A private trust company with family directors is the usual way to keep decision-making close to the family. Retaining too much personal control over a trust can expose it to challenge as a sham or bring the assets back into the settlor’s estate abroad.
How are foundations and trusts taxed in Gibraltar?
The tax treatment is similar in outcome, as of October 2026:
- Residence. A foundation is Gibraltar resident unless people ordinarily resident in Gibraltar, and their issue, are irrevocably excluded from benefit. A trust is resident, for Income Tax Office registration purposes, if at least one beneficiary is ordinarily resident in Gibraltar. Category 2 individuals are treated as non-resident for both.
- Rate and base. A resident foundation or trust pays tax at 15% on income that is taxable in Gibraltar, which on the territorial basis means income accruing in or derived from Gibraltar. Dividends from companies and most interest are not taxable income in the first place.
- Beneficiaries. Only beneficiaries ordinarily resident in Gibraltar are taxed on distributions, matched first to the structure’s taxed income, then untaxed income, then capital, with credit for tax already paid.
- No capital taxes. Gibraltar has no capital gains, inheritance, estate, gift or wealth tax.
An older 2022 practitioner note gives the foundation rate as 12.5%; that was the rate before corporation tax rose to 15% from 1 July 2024. For the underlying company rules, see investment holding companies in Gibraltar.
What must each report, and to whom?
Trusts. Since 1 December 2025, every trustee of an express trust governed by Gibraltar law or administered from Gibraltar must give the GFSC the identities of settlors, trustees, protectors, beneficiaries and anyone with ultimate control, plus the trust’s CRS classification. New appointments must be reported within 10 working days. The information is not public. Resident trusts with taxable income also register with the Income Tax Office.
Foundations. The foundation’s public particulars sit on the Registrar’s register, and annual accounts go to the Registrar. Beneficial ownership rules treat founders, councillors, beneficiaries and anyone with ultimate control as beneficial owners. The UBO Regulations apply trust-style reporting duties to foundations that have Gibraltar tax consequences, and a foundation is a legal entity under the 2017 Act, but the rules and the Registrar’s guidance do not spell out exactly what the foundation files and where. The licensed councillor handles these filings and will confirm the position for your foundation.
Which should you choose?
A foundation tends to suit:
- families from civil law countries (Spain, Latin America, much of continental Europe) where trusts are poorly understood or treated unpredictably;
- founders who want a single entity that banks and counterparties can treat like a company;
- philanthropic or long-term family purposes with a defined charter.
A trust tends to suit:
- families with UK, Commonwealth or US connections, where trust taxation is well mapped;
- situations where privacy from public registers matters;
- plans that need flexibility, asset protection registration or purpose trusts.
Many families use both: a foundation or trust at the top and holding companies beneath. The wealth and family office hub shows how the pieces fit together.
What changed with the 2026 UK–EU treaty?
The treaty includes commitments on tax transparency, state aid control and keeping anti-money laundering standards at EU level, according to ISOLAS and Sovereign summaries, but those summaries report no direct change to the Private Foundations Act, trust law or the tax rules above. For families with Spanish ties, the more important rule remains the 2019 UK–Spain tax agreement, which can treat a Gibraltar trust or foundation as Spanish resident if most of its assets, income, managers or control are Spanish.