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The following is an 'outline' and further advice should therefore be sought on any matter or matters of interest. In any outline there are of necessity, matters excluded which may be of relevance in particular circumstances.

In whose name should a transaction proceed?
In Gibraltar, only the following persons can hold land or property:
- a British subject or British citizen;
- a Gibraltar registered company;
- a United Kingdom registered company;
- a National of a member state of the European Union who has a valid residence permit issued under the Gibraltar Immigration Control Ordinance;
- a company incorporated under the law of a member state of the European Union and which has the right of establishment in Gibraltar and has exercised that right.

However, the most usual way for foreign nationals or foreign companies, whether EU companies or not, to purchase property in Gibraltar is through a Gibraltar company. This is because there is no restriction whatsoever on the nationality of persons who may own a Gibraltar registered company nor are there any restrictions on the nationality of the person or persons who may be directors of a Gibraltar registered company. The usual situation is therefore that a foreign purchaser incorporates a wholly owned subsidiary in Gibraltar. This may also have tax advantages.

Title to Property
In all modern developments in Gibraltar the land is owned by the Government of Gibraltar ("GOG") which grants a lease to the development company for 150 years. the development company then sells on to a purchaser.

The purchaser receives a lease over the property for 150 years less 7 days.

Management Company
A management company manages the development as a whole. Usually the purchasers own the management company and contribute to the running costs of the development by way of service charges payable quarterly or annually in advance.

Taxation and Residency
Qualifying (Category Two) Individual status limits the taxation payable in Gibraltar to monies remitted to Gibraltar up to a maximum of ?45,000 taxable income. The minimum tax payable is ?10,000 and the maximum is approximately ?20,000.

Capital Gains Tax
There are no capital gains taxes in Gibraltar. On the sale of property, any profit made is free of all taxation provided that the company is not actually trading in property. This may occur where a company purchases for example five properties and sells the properties individually over a period of time. Effectively, if the company buys five properties and sells all five properties simultaneously at a later date, then no income tax liability will arise. However if the company sells the properties at different times then the likelihood is that the Commissioner of Income tax will consider the company to be trading and assessable to income tax at the company rate in Gibraltar of 35%.

This liability to income tax can be avoided by purchasing individual units in separate Gibraltar companies. If one Gibraltar company is incorporated for the purchase of each unit then on re-sale of that unit there will be no income tax liability.

Income Tax
The corporate rate of tax on profits is 35%. This tax is payable on profits after all deductions. Full mortgage interest relief is given against income received and therefore it is an advantage to purchase by obtaining a loan facility if it is intended to rent out the property. In certain circumstances it may be possible for the mortgage to be given by a foreign entity although a liability to withholding tax may arise.

Costs of Purchase including stamp duty and registration
Law firms in Gibraltar usually charge legal fees based on scale fees or alternatively on time. Usually it is a combination of both, taking into account the level of the transaction and the responsibility involved.

Legal Fees
Time is usually charged at say: ?120 per hour
whilst scale fees applicable are: ?205 for the first ?30,000, and thereafter ?5.00 per ?1,000.

Stamp Duty
As a guide, the stamp duty payable is approximately 1.26% of the full purchase price.

Registration and other fees
Approximately ?300 should be allowed for registration and sundry fees.