The taxation of trusts is not an area of concern for everybody.  However, there have been significant changes in the tax law, which mean this is relevant for anyone who has set up a trust, is a trustee or is a beneficiary of a trust.

A trust which is not resident in Gibraltar is taxable only on income that accrues in or is derived from Gibraltar.  A trust which is resident in Gibraltar is taxable on its worldwide income.  Non-trading interest income, dividends from listed companies, non-Gibraltar rental income and capital gains are not taxable.  Also the capital of the trust is not liable to tax.

This depends on the residency of the beneficiaries (not the trustees or settler of the trust).  If any beneficiary, potential beneficiary or parent (or grandparent, great grandparent and so on) of such a person is ordinarily resident in Gibraltar, then the trust is resident here.  Ordinarily resident persons now include those present in Gibraltar for 183 days or more in a tax year, or for more than 300 days in three consecutive tax years.  Different rules apply for “Category 2 Status” individuals and their family.

The law states that a trust is resident “where the class of beneficiaries, other than persons irrevocably excluded from benefit, may include a person who is resident in Gibraltar or the issue of such a person.”

This presumably means that if a trust is set up in, say, Australia, and the trust deed does not specifically exclude a person being a beneficiary if they become resident in Gibraltar, then that Australian trust is taxable in Gibraltar on its worldwide income – even if none of the beneficiaries ever set foot in Gibraltar.  I’m not sure how the Income Tax Office is expected to enforce that one.  

Their income is exempt, except income from a trade or business.  However, income from a trade or business is exempt as long as the profits are only used for the purposes of the trust, and either this business is in the cause of carrying out a primary purpose of the trust, or the work is mainly carried out by the beneficiaries of the trust.

Yes, but any tax already paid by the trust on its income that gave rise to the payment to the beneficiary can be set-off against the beneficiary’s tax bill.

Yes, except generally the benefit derived by a husband or wife from the occupation of the matrimonial home, where this is owned by the trust.

As for individuals, a Tax Return is due by 30 November each year.  Payments on account are due by 30 June and 31 December each year (starting this 31 December).