Gibraltar: Offshore Investment
There is a strong insurance community in Gibraltar, by no means all devoted to captives, with both principal companies and brokerages able to offer suitable products for pension investment.
Individuals in a number of situations can gain advantage from offshore pension investment, for instance:
- Expatriate executives, professionals or entertainers;
- Residents in high-tax countries intending to become non-resident on or before retirement ;
- Residents in low-tax countries.
Expatriate executives, professionals, entertainers and similar types of global wanderer have a considerable problem with pension provision, since it is often the case that while non-resident they cannot continue with tax-privileged pension investment at 'home', ie in their original domicile, to which they probably intend to return in the end. It may well be that offshore investment is the only practicable route, even though the income they eventually receive in retirement is going to be taxed - and they may decide to retire offshore, in which case they will have preserved flexibility by not committing to any particular high-tax jurisdiction.
People who already live offshore and have no intention of moving onshore, are not really concerned with the distinction between 'pensions' investment and 'non-pensions' investment, since there are probably no taxes to consider either way. They need to have regard to security of course, and will no doubt be planning to maximise income in retirement, so that offshore pensions products are still relevant to them.
Investments intended to provide pensions income need to take into account the choice of jurisdiction for eventual retirement. Gibraltar, like many offshore jurisdictions, provides tax exemption for non-residents, but not for residents, or at any rate not for the local income of residents, so that it may be undesirable to locate a retirement investment in Gibraltar if that's where you plan to live.
With regard to residents of retirement age, in July 2008 the government announced that with effect from the tax year commencing July 1, 2008, persons aged 60 or over and who had no occupational pension benefits, would be eligible for a Tax Credit of up to GIP4,000 in respect of their earned income for the year.
The government explained that the Tax Credit aimed to ensure that those persons who felt the financial need to carry on working beyond the age of 60 as a result of not having had an opportunity to save for their retirement by way of a pension scheme, would pay no tax on the first GIP20,000 of their earned income.