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p10 Gibraltar Day p 25 Profile: Sir Adrian Johns Nov/Dec/Jan 2010/11 GIBRALTAR INTERNATIONAL FINANCE AND BUSINESS

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www.gibraltarinternational.com GIBRALTAR INTERNATIONAL 3 Nov/Dec/Jan 2010/11 EDITORIAL COMMENT Volume 16 / Number 4 Global recognition awaits

ow tax has become a reality for Gibraltar businesses; a new 10 per cent headline rate of Corporation Tax applies to all from January. The fall from 35 per cent in 2007 has been quite spectacular and undoubtedly Lpartly responsible for the jurisdiction’s improved economic situation since. Economists have long argued that low corporation tax stimulates business activity for the greater good of society generally, because it encourages investment. In Gibraltar’s case, and being a services dominated economy, this is more likely to encourage businesses to Contents relocate or set up operations on The Rock, taking advantage of the combination of an overall favourable tax NEWS P6-10 environment – no capital gains, wealth or inheritance tax in addition - and the enviable lifestyle found in the southern Bid for insurance ‘billions’ Mediterranean. They will be encouraged too by the growth in the Moves to meet office demand jurisdiction’s Gross Domestic Product (GDP) – rising 130 Gibraltar Day – seeking high ground per cent in a decade - and a relatively low public debt, though predicted to rise, that is still only 15 per cent of GDP, among the lowest in the world. PENSIONS P13-14 Little surprise then that Ministers expect low business New tax regime boost tax to “create a bounce of interest” amongst companies relocating to Gibraltar. But at the same time, some nervousness has been shown at the lack of available quality ENERGY P16-18 office space for these newcomers, even to the extent of Saving measures threatening to kick-start a planned office development, reportedly long-stalled through lack of bank finance, by investing government money instead. TAXATION P21-22 It must be with some relief therefore, that a World Zero rate goes, but not firms Trade Center (WTC) Gibraltar is to be built, where 1,000 or more people will be employed, by end of 2012. The new building more than trebles the existing Ocean Village office PROFILE P25-26 space, but, crucially, provides a large single floor area to accommodate a sizeable business – something that has so Sir Adrian Johns - ‘personal relationships’ far been lacking. The claim that this WTC development – the 335th to PEOPLE AND PLACES P28-29 be granted an operating licence – will help put Gibraltar on the world stage, is more than promotional speak; it’s a TAXATION P30-31 truism. The jurisdiction’s Finance Centre Council that reflects Benefits from new tax law common business desires as well as concerns, is widely known to believe that more must be done to get the jurisdiction and its benefits better known, beyond one-off, big-time publicity efforts, such as the recent Financial Times special report on Gibraltar – good though that was. A recent survey of top UK fund managers focused on Gibraltar and Malta as two potentially key jurisdictions to attract business, but found a lowly 2 per cent knew GIBRALTAR INTERNATIONAL MAGAZINE anything about what The Rock had to offer. In defence, Published by Gibraltar No part of this publication some pointed to the fact that Malta had been aggressively International Publications Ltd. may be reproduced without promoting its offering for several years. 1/5 Irish Town, Icom House, the written permission of the So if this jurisdiction is to be seen as a reputable, Suite 6/PMB 104 publishers. The publishers international finance centre, people have to know why it PO Box 561, Gibraltar have tried to ensure that all deserves that status. Drawing attention to Gibraltar by information is accurate, but association with World Trade Centers across the globe is Editor emphasise that they cannot only a first step. Ray Spencer accept responsibility for any Perception is everything as those waiting for Spain to [email protected] errors or omissions. The sign a Tax Information Exchange Agreement (TIEA) with publishers accept no Gibraltar this winter well know. Sales responsibility for statements C.A. Tanner made by contributors or for If as a result, the stigma is removed of being regarded [email protected] any claim made in an by Spaniards as a ‘tax haven’, it will enable insurers, advertisement. bankers, and company management firms to gain Design considerably from cross-border business unfairly denied to Bil Brooks Gibraltar International them thus far – even though Gibraltar is within the EU! [email protected] Magazine is available on And another Gibraltar plus will have been achieved; subscription, 4 issues posted but will it then be well known? UK Agent: to: UK £24 - EU £32 - Tel: 0044 (0) 1993 703560 Rest of World £44.

© 2010 Gibraltar International Publications Ltd.

4 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com NEWS Low tax Gibraltar pressing for share of UK ‘insurance billions’

Gibraltar could be the home agreed. “Being able to effect refer specifically to Gibraltar to billions of pounds of insur- Part VII transfers will increase and its special status within ance premiums and many Gibraltar’s value proposition on income arising from insur- the EU. new jobs if the UK keeps to significantly. ance premiums to be excluded Correcting this omission from tax calculations. previous undertakings to “Using Part VIIs to trans- would be “Gibraltar’s greatest fer the assets and liabilities of That “places Gibraltar ensure British insurers can opportunity for further sus- one insurer in the UK to firmly at the forefront of transfer their businesses to tained and sensible growth” another insurer in Gibraltar potential business leader’s the territory. since the advent of ‘passport- fits well with the model of thoughts on jurisdiction of It is just one of several ing’ of goods and services robust yet responsive regula- choice”, Quinn maintained. initiatives the jurisdiction’s throughout the EU, Steve tion that Gibraltar offers”, He is assisting an investment insurance sector hopes will Quinn, Quest Group manag- said Sykes. bank with insurance interests expand the market and ing director, told Gibraltar in Bermuda that expects to reinforce Gibraltar’s position International. Yet, as Penny Hudson, expand into Europe from as a mainstream onshore managing director of Caledonian Gibraltar early next year. International Finance Centre Insurance Management Services, And Quest has just helped and follows a series of London reminded: “Under UK rules, if an establish Calpe Insurance meetings by Chief Minister insurer goes into run-off, the Company for the New Peter Caruana with UK requirement is for the reinsur- York based Transatlantic Departments in October on a ance to go with it, and that can Reinsurance Group, which variety of financial services, be anywhere in the EEA – except operates globally in 23 cities EU, aviation, gaming and at present, Gibraltar.” and in Gibraltar will specialise immigration issues. in providing co-insurance to A Tax Information spread the risk for a primary Exchange Agreement (TIEA) Attracting business insurer – the first insurer of with Spain is also strongly Hudson, who runs one of this type on the Rock. anticipated this December at seven Gibraltar insurance Quinn pointed out that the separate Tripartite "Firmly at forefront of business leaders' thoughts" - Steve Quinn, management companies, has although the UK was its prime Ministerial meeting also Quest. just sold her business with target market for new busi- involving the UK, which Speaking at the openingaround £0.75bn under admin- ness, a new opportunity had would break the barrier to of his new Grand Ocean Plazaistration, to Randall & Quilter arisen with a specialist bonds cross border financial services. offices, Quinn said “this willInvestment Holdings, evidence and guarantees business estab- Insurers have to maintain sep- permit a 20 per cent growth inthat insurers and major busi- lished for the Italian principals arate branches in both coun- Quest insurance managementnesses in Gibraltar and in the of client, Hill Insurance. tries, because Spain still and broking business”, QuinnUK are interested in buying regards Gibraltar as “a tax also noted: “We need to putinsurance companies to relo- haven”. Gibraltar on an even-footing. cate to the jurisdiction. TIEA with Spain Four years ago, the UK They are attracted by the Being on the OECD “White government signalled it would 10 per cent headline rate of List” of countries with trans- rectify a legislative omission Corporation Tax. parency in financial services that prevents insurers relocat- New interest “People will be looking at was vitally important for the ing their business base and “We know of several small to alternatives to their present insurance sector, because of portfolios to Gibraltar, when medium-sized UK insurers, jurisdictions for moving to or the ability to ‘passport’ poli- they can freely do so anywhere particularly those involved in consolidating their operations cies throughout Europe, else in the European Economic run-off activity, who are inter- in Gibraltar, and looking at explained Aon’s chief operat- Area (EEA) - but for a variety ested in placing all of their what is – or is not – possible ing officer, Stuart Brown. of reasons nothing has since business, or their headquarters under part VII in relation to “There is a high expecta- progressed. operation in Gibraltar, which run-offs and the requirement tion that the Spanish TIEA The UK Financial Services could easily involve billions of for reinsurance,” says will happen before the end of & Markets Act 2000 - under pounds in premiums for this Hudson, who stays with this year. There are a lot of the Part VII Transfer section territory,” Quinn declared. Caledonian. Spanish captive insurance relating to court approval for Former Gibraltar Insurers Corporation Tax companies run out of the transfer of insurance com- Insurance Association chair- effectively may be cut even Luxembourg and Dublin and panies and reinsurers - fails to man and managing director of further; a late change to the it would make more sense for Aon Insurance (Gibraltar) 2010 Tax Act allows interest them to be run out of Management , Paul Sykes, Gibraltar”, he enthused.

6 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com NEWS Fresh moves to meet office demand Gibraltar is determined to 13,600 m2 WTC Gibraltar will not interfere,” Caruana ensure that there is sufficient block, Gibraltar International said”. which it sits and the global quality office space available understands. He expected “clarity by alliance network covering to cater for an expected influx Tenders to build in Spring the end of the year” on the more than 100 countries of new businesses following are being reviewed and the reality of funding for any opens up local businesses to a introduction from January of project, with its single 3,000+ developer. “The government world of interconnections the new low rate 10 per cent m2 office floor plate and 420 has no desire to go into and opportunity”, explains Corporation Tax – even if car parking spaces, is expect- property development – we Butcher, who lobbied the that means investment by ed to be ready for late 2012. have much better things to do WTC Association annual government directly in new That is around the same with the capital available. congress in Beijing to secure development. time as the proposed 200-bed “The ideological instinct the licence in October. is to allow the private sector Letters of support for the to do what the private sector WTC project came from can do much better than the banks, insurers, trust and government, including build- accountancy firms, as well as ing office space.” trade associations and the Minister for Development, Joe Holliday. Satisfying growth “As World Trade However, earlier, he empha- Centrers are inherently sised: “We need to have more endorsed both by govern- offices, especially if, as ments and the private sector, expected, the new Tax legisla- it aids Gibraltar in attracting tion provides an impetus for investment grade businesses, growth with new business the global leaders in and organic growth in insur- international trade and com- ance, funds and other areas. merce to make a powerful Artists impresion of new World Trade Center Gibraltar "bringing global “We have got to have impact on the this territory’s recognition to Gibraltar", Greg Butcher Such is official concern Hilton Hotel project that also available on spec, quality economy and status,” Butcher that a lack of quality space for includes ‘significant’ office office space; otherwise they reflects. business will hinder future re- space will be ready now that will come, like the jurisdic- Europort, Gibraltar’s domiciliation of Blue Chip UK developer Squarestone is tion, but then won’t be able to largest office complex, has firms from the UK and else- understood to have secured locate here, because of lack of nearly 4,000 m2 of office where, the government is con- finance to build on the Royal physical infrastructure.” space available across four sidering taking a majority Gibraltar Yacht Club site. Butcher believes the tower blocks, the largest sin- stake in at least one private Peter Caruana, Chief WTC Gibraltar project that gle available space being 1000 sector building project – the Minister, told Gibraltar effectively trebles Ocean m2. Even so, negotiations are first of four phases of the International exclusively a Village office space, will help believed to be advanced to £120m Mid Town, 38,000 week before the WTC bring global recognition for take up some 2,500 m2 of the m2 development. Gibraltar was announced, the jurisdiction and ensure space, mostly in the new But an announcement by that Gibraltar needed only quality commercial space is Atlantic Suites building. Ocean Village developer Greg one of three potential office available to meet growing “Although in the short Butcher that he has secured a schemes where “we are aware finance centre demand. term Gibraltar has no licence to establish a £30m of that funding availability The WTC will have a shortage, there undoubtedly World Trade Center (WTC) in may be a problem” to concierge reception for visit- is a need for someone to get a seven storey office block proceed. ing senior inter-governmental ahead with a new develop- to be built at Marina Bay and business leaders at the ment, because of the building may prompt the government new international airport ter- lead time”, pointed out to drop its controversial minal now being built, state managing director, Lawrence financial pump priming plan. What to support of the art video-conferencing Isola. Already a major banking- and telephone communica- “If the banks aren’t “It is a question of which one group, a leading international tions and world-wide recipro- prepared to lend to support to support - we wouldn’t par- accountancy firm and an cal facilities with 300 similar Gibraltar business needs, then ticipate in all of them and we egaming operation have Center’s across the globe. it’s right that the government are not offering to bail provisionally secured more “The presence of a World steps in to assist a commer- out every developer”, he than a quarter of the Trade Center raises the busi- cially viable office project to explained. “If the private ness profile of the location in secure our future”, he added. sector can fund them in a reasonable period of time, we

8 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com GIBRALTAR DAY

Seeking the high ground and thus to enhance the City of London’s global leadership in financial services. There for business investment are things that Gibraltar can offer to the City of London to “I believe it is going to be add value to the already huge increasingly more difficult for depth and mix of financial leading international financial services leadership.” services companies to justify The economy of in their own internal corpo- Gibraltar continued to per- rate governance regimes and form well with Gross also externally, operating in Domestic Product (GDP) in zero tax jurisdictions.” each of last two years growing That was the challenge to by more than 5 per cent and City of London business in this year, possibly higher. leaders investing globally, Political and fiscal stabili- thrown down unashamedly by ty was “a sound environment Gibraltar’s Chief Minister, for businesses to succeed and Peter Caruana, at the 11th flourish” in an economy that annual Gibraltar Day celebra- enjoyed a high level of tions in mid-October. resilience – a degree of diversi- In a thinly disguised fication untypical of such a bid to prompt major UK Rapt attention from 270 guests at the Gibraltar Finance Centre lunch small economy “focused on companies to consider the high standards of regulation impact of Gibraltar’s new low companies wishing to do and supervision across the headline rate of 10 per cent welcome. business in and with Europe”. economy”. Corporation Tax, as part of a “On the other hand, He said there had been wider offering from the those seeking a businesspsychological barriers of Open promotion jurisdiction, he said it “pro- location to exploit withoutacceptance of such things as The heavily over-subscribed vides an attractive and com- sharing our values and com-Tax Information Exchange Finance Centre lunch has petitive fiscal environment for mitments to high standardsAgreements (TIEAs), which become the place where local reputable international finan- and reputation will find thathad already led to many coun- Gibraltar offices of UK major cial services companies, which there are many more suitabletries responding by removing operations seek to influence increasingly feel less comfort- locations elsewhere.” Gibraltar from their lists of headquarters’ thinking in able operating in zero tax Caruana emphasized:tax havens. respect of the jurisdiction, and offshore jurisdictions in the “Our jurisdictional reputation Gibraltar had succeeded similarly those firms locally context of the new emerging is our most valuablein gaining OECD ‘White looking to attract new post-crisis, international con- resource.” Book’ status by signing 18 business. sensuses about good, respon- Many other offshoreTIEAs, demonstrating com- It was the first time the sible corporate practices.” finance centres have nil ratesmitment to tax transparency – Chief Minister had so openly of corporation tax, attractingand unspoken was the desire promoted Gibraltar’s finance particularly funds, trusts andto also achieve a TIEA with centre. He said: “Gibraltar insurance companies, butSpain that critically, would see does not place foreign labour Close links Gibraltar’s Corporation Taxthe jurisdiction being removed quotas or restrictions on its The day’s purpose was “to reduction over five years fromfrom that neighbouring financial services operators, underscore the close links 35 per cent in 2007 to the 10country’s ‘tax haven’ label. and offers a modern, safe and between the UK and Gibraltar per cent rate from January, However, he emphasized attractive quality of life for generally, not just political has been achieved whilst elim-to his 270-strong audience ex-patriot communities. and constitutionally, but also inating the special zero ratefrom major UK and Gibraltar “Personal tax rates are the economic links – financial company regime that helpedenterprises: “We see the City not excessive and are falling services in particular”, he give the jurisdiction the ‘taxof London, not as competitors fast and senior executives can noted haven’ tag it now says is, but partners, despite the cap their personal tax bills at But he told a packed inappropriate. huge difference in size and relatively low levels.” In Drapers City Livery Hall: “If Caruana revealed that heglobal importance of our short, Gibraltar was “a low any of you here share with us had “shared this view withrespective finance centres”. tax, onshore EU location, our vision and approach to colleagues in other jurisdic- He boldly stated: “We regulated to EU standards high standards of financial tion who have not yetbelieve Gibraltar can assist and, where they are higher, services, then please take a made this decision” becauseCity firms to improve their to UK standards” Caruana look at what Gibraltar may he believed it was “theinternational competitiveness declared have to offer you: you will be only future for reputable .

10 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com PENSIONS

structural changes that have taken place Pensions get a boost in the tax system and not just the reduc- tion in tax rates. For example, the ‘Gross’ income from new tax regime basis of personal taxation was intro- duced with effect from July 2007 and After five years of successive falls in personal income subsequent changes to rates and and Corporation Tax, and the introduction of a simpler allowances in 2009 and this year in par- ticular, mean that large numbers of tax- personal taxation regime, Gibraltar has become a very payers across the income spectrum are attractive tax jurisdiction for accumulating pension better off under the Gross basis. However, one consequence of indi- benefits in particular, according to personal and viduals moving to the ‘Gross’ basis of corporate pensions and investments specialist, assessment is that they can no longer claim tax relief on pension contribu- Anthony Drew tions. If a pension is funded through an here have been changes in older-style retirement annuity personal other countries as well, but pension, then any employer contribu- it’s fair to say that tions will be taxed as a benefit in kind – Gibraltar’s have been more something that all taxpayers have to generous to the taxpayer watch. thanT most. This was always the case under In other countries the emphasis - Gibraltar’s ‘Allowance’ system, but certainly over the last year or so - has under this system it is possible to claim been on increasing tax rates, following tax relief on the employer contribution, the global financial crisis and a need to making it tax neutral overall. Under the deal with a massive deterioration in ‘Gross’ basis, the employer contribution government finances. will be taxed as a benefit in kind so they The UK is a good example and the will be worse off as they will not be able 6th April 2010 in particular, will not be to claim tax relief. a day that high earners there will have relocate to the jurisdiction. However, converting their retire- welcomed. Those individuals now will Higher earners, particularly if ment annuity contract to a new style be on the receiving end of an eroded (if assessed on Gibraltar’s Gross Income personal pension scheme means employ- not completely eliminated) personal tax basis – one of two possible tax systems er contributions are not treated as a ben- allowance, other allowances and tax available locally - now will pay tax at efit in kind. In practice, this can be bands that will not have been indexed rates well below those applying in the achieved quite easily through a change for inflation, and a marginal 40 per cent UK and other countries. Companies in in the governing trust deed. rate income tax on taxable income of the financial services and gaming sec- over £37,400, leading eventually to a tors, already provide attractive high top rate of tax of 50 per cent! earning opportunities. On top of this, complex restrictions Individuals who are more highly Offset profits have been introduced that cap the taxed need to be mindful of the tax and From January 2011 previously tax amount of tax relief that can be claimed other financial issues that arise when exempt companies will pay Corporation on pension contributions. And it is not they either live in or relocate to Tax for the first time, but employer con- only high earners that are affected. Gibraltar. tributions to pension schemes provide Increased levels of UK National These issues are not necessarily an opportunity to offset taxable profits. Insurance contributions apply at all solely in respect of Gibraltar tax; for Since July 2008, proprietary directors levels of earnings. example, well paid secondees from a UK have been allowed to participate company have access to potentially in approved company occupational very advantageous pension planning pension schemes, and this also provides Less than UK opportunities as a result of current UK valuable tax planning opportunities. In contrast, Gibraltar’s economy has legislation. A recent budget change affecting continued to grow, and sustained budg- Whilst Gibraltar’s tax system is individuals with money purchase pen- et surpluses over recent years have much more straightforward than in sion scheme benefits (either from occu- meant continued reductions in income some other jurisdictions, and there is an pational or personal pension schemes), tax rates. These reductions, along with absence of capital taxes such as inheri- is that since 2006 it has been possible to cuts in the rate of Corporation Tax to a tance tax and capital gains tax, that does take their entire pension fund as a tax low 10 per cent, make Gibraltar attrac- not mean there are not tax planning free lump sum; there is no longer the tive for High Net Worth Individuals issues to be considered. requirement to invest a large proportion (HNWIs), businesses and investors to Some of these stem from the Continued P14

www.gibraltarinternational.com GIBRALTAR INTERNATIONAL 13 PENSIONS

Pensions get a boostContinued from page 13 But given there is no longer the traditional annuity. of the pension fund into a scheme requirement to buy an annuity or some- However, that concept has to sink in providing lifetime income. thing similar, the traditional strategy of to a much wider extent in Gibraltar. It is For many people there is a great migrating into safer investments in years not just an issue for the holder of the attraction in not being forced to use running up to retirement, could well be pension benefits; there are important their retirement fund to buy an income flawed. implications for the money purchase which dies with them. Obviously, If the retiree doesn’t have other pension scheme trustees who have a gen- retirees have to carefully manage their plans for the pension fund, it will be eral duty to act in the best interests of pension fund to meet their needs for the invested to provide income in retire- beneficiaries. rest of their lives, but the changes have ment, but with ever improving life other wider implications for individuals, expectancy, this could be for 20 years or Discharging duty employers and pension scheme trustees more. So-called “life-style” or automatic based in Gibraltar. The chances are that the funds will switching investment strategies may not best be invested in a not altogether be appropriate, and the trustees’ duty Flawed strategy? dissimilar way to that in which they may not necessarily be discharged sim- Conventional wisdom has it that the were invested over all those years, when ply by allowing individual pension retirement fund built up systematically he was making pension contributions scheme members to choose their own over a working lifetime is migrated into and accumulating the fund. investments, rather than it being done safer investments in the run-up to retire- This concept may be nothing new to for them by the trustees. ment age so that the fund is protected individuals from the UK who may well This issue is also of concern to against last-minute investment market have substantial investments in self employers, who, after all, would want to falls. In this way the traditional ‘critical invested personal pension schemes see their employees’ pension benefits event’ that takes place at retirement age (SIPPs) and whose retirement fund optimised, and on whose behalf they set which is the transition out of a pension investment strategy is centred around up the pension trust in the first place. fund into an income generating vehicle taking income on retirement through Anthony Drew is Technical such as an annuity is made that much some kind of income drawdown Director at European Financial safer. arrangement, rather than buying a Planning Group, Gibraltar

14 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com ENERGY ENERGY Energy savings can bring planning and cost hurdles The environment business and ways to reduce carbon emissions in the wake of which would make it a renew- able energy power station with ing electricity beyond your European Union (EU) targets and Directives for action, is bringing business no noise, emissions, moving needs, because there is no turbine with three solar panels halogen tube fluorescent lights opportunities, Ray Spencer reports. parts and a projected lifespan of means of putting the surplus to power his workshop and that are equal in size and output some 30 years in which to pro- power into the Gibraltar Grid, home. But owner Desmond to usual bulbs, but cost five which does not have the ability Walsh has not put the unit fully times as much! On a 12 hour oves to encourage duce thousands of Megawatts ously it had received no work. over 7 m2 of solar panels are at present to accept it.” to the test, because he was daily office or shop use, energy saving meas- of clean renewable energy.” Managing director Khalifaassessed on a project basis and unable to gain planning permis- breakeven can be achieved in ures have been wel- Gibraltar’s 2009 Environment Saber was surprised that therebusinesses there can reclaim up sion for the wind turbine! less than two years and over comed by businesses Action Plan gives examples of M had not been more interestto 60 per cent of the cost of “It’s a real shame. I thought their lifetime produce a four- keen to see government take a eligible energy efficiency improve- given the availability of so approved installations, on a it would have been good to have fold return on investment. ment measures that will be encour- lead. much sun and the potential to € firsthand experience of the ben- “And the cost saving on 30,000+ investment, he says. aged for the residential sector and Removing the 12 per cent save money on relatively high efits to come from energy saving electricity consumption is “In this part of the world required for the business and import tax from solar panels electricity bills. some 85 per cent of the annual public sectors. methods before selling to my immediate”, he points out. and associated operating equip- demand can be met by solar customers,” says As Gibraltar’s commercial ment and necessary installation Hot water savings panels leading to a power fuel The idea is for property Walsh. rate for power rose by 10 per in Gibraltar’s June budget is Khalifa Saber promoting energy savings According to Saber, in Spain cost reduction of 35 per cent owners to generate their own Nevertheless, cent as a result of the June described as “a welcome first solar can mean a saving on when most people use electric electricity through micro renew- Naughton-Rumbo Budget, Saber reports “very step”. cost of installing solar systems,domestic hot water for a family immersion heaters,” he notes. able methods – solar panels, was surprised that strong initial interest”. However, it falls consider- including associated tubes andof four of around €800 a year There are almost no solar photo voltaic cells (electric gen- more interest had But there is no publicity to ably short of neighbouring collectors. using a 200 litre compact sys- panels in Gibraltar. The erators), ground heat pumps, not been shown gen- promote energy saving in Andalucia’s renewable energy Nevertheless, the tax con-tem (where the water is stored Environmental Safety Group and small wind tur- erally in energy sav- Gibraltar, nor incentive schemes grant scheme for individuals cession has been seized upon byin a tank adjoining the panels) said an opportunity had been bines – or to employ ing ideas for existing to encourage adoption of ener- and businesses to help cut Pretasol, a year-old specialistthat costs €3000 before grants. missed with the new air energy saving systems. homes and offices, gy saving by large users or indi- demand for fossil fuels. environmental energy companyOn larger, more efficient 500 terminal now being built. However, deputy citing cost as one of viduals; but other government Gibraltar roof tops Depending on the type of equip- in Estepona, just 30 minuteslitre split system installations, “We could have had a dual head of planning Paul (centre) with no the possible reasons. incentive schemes do exist, ment and project size, the drive from Gibraltar, which has sight of solar panels the grant can be nearly a third purpose building, that is a state Naughton-Rumbo, such as these Pretasol’s Saber has been which Saber believes could be a Spanish regional government begun a concerted sales opera-of the €6,200 cost. of the art air terminal and a explains: “The difficul- (left) or the wind getting major local companies useful precedent. turbine and solar will pay 25-60 per cent of the tion on The Rock, where previ- Larger projects involving state of the art solar panel roof, ty is in achieving a panel kit (top) that to consider energy saving bene- Desmond Walsh fits from use of LED lights – notIncentives balance against other wanted to install considerations – in the Old just the small 10W halogen“There is an incentive scheme Town, use of wind turbines lights that give the same illumi-which works well for people Low carbon power generation and energy would be out of character with First hand nations at 70 per cent lowerwho refurbish the façade of the area in much the same way experience running cost and extended lifes-their buildings and who can as TV satellite dishes are on One small electrical contractor, pan as traditional 35w bulbs. then offset the cost against their reduction targets proving tough to achieve buildings. Deselec, invested £4,500 in an He’s anxious to get busi-tax liability; we have a constant flow of applications”, says New Euro-laws require both greater use of “It’s also no good produc- integrated kit from a Spanish nesses and government depart- supplier that combined a wind ments to change to low power renewable energy and reductions in the power Continued page 18 used by buildings of all types, the area where governments believe the largest potential renewable sources. None exist at to meet the area’s need for to £30m at today’s prices. or Energy Company for the sup- improvement can be achieved. present in Gibraltar. electricity. The design and build specifi- ply of power”, but the govern- However, to meet the juris- With concerns over emis- cation for the new fossil fuel ment rejected that on social, eco- Countries must take measures to Greater use of sustainable diction’s anticipated 4 per cent sions, the old power stations will project on a 19,000 m2 site has nomic and other grounds. reduce their carbon footprint so energy sources for individual year-on-year growth in energy, be phased out from 2013, been amended to embrace noise To some surprise, the that the EU climate change and public sector electricity gen- the Government is pressing when the Gibraltar Electricity concerns of homeowners near to Environmental Safety Group target of using 20 per cent less eration is on the cards; solar The– elderly Waterport Power Station is to be phased out ahead with construction of a Authority (GEA) expects to open the proposed site after they (ESG), a non-governmental, energy can be achieved in the hardly in evidence so far – as with a timetable for enforce- ing technical requirements can new diesel powered generating a £100+m new facility operating applied in February, through apolitical organisation formed in next ten years. well as pioneering tidal and wind ment. “One issue of concern for often be complex and implemen- station for electricity – just about at the south end of The Rock. barrister Charles Gomez, to the 2000 to promote environmental Efforts to reduce energy generation is being considered. Gibraltar, resulting from our tation cost per capita is much the only form of energy used in The aim, according to GEA Supreme Court for a Judicial issues within the community, consumption in buildings An Environmental Action small size and limited resources, greater when compared to larger the jurisdiction. chief executive Manolo Aleciro, review of the scheme. backed the new project. through planning controls and and Management Plan (EAMP) is our ability to comply with communities. The present elderly is to produce an initial 42MW The Chamber of Commerce “The new power station is energy use measures for existing is expected to be published every aspect of every [EU] At the same time, the EU Waterport Power Station, anoth- generation to meet local peak baulked at the costs involved urgently needed due to the properties are being mounted in before the end of the year, having Directive, as they apply to has directed that within the next er owned by private company demand, and then to increase and suggested Gibraltar instead intolerable impact from all three Gibraltar based on UK models – been delayed by several months, us”, says the Environment five years all countries must OESCO, and one run by the capacity in three of four stages to “plug into the European ‘grid’ existing ageing units”, which but their impact may only be and will incorporate a compre- Department. provide at least 12 per cent of Ministry of Defence have a com- 80-96 megawatts by 2032, at an and contract with some were not covered by EU or local limited. hensive package of action points It points out that the result- their energy requirement from bined capacity of 60 MW additional estimated cost of up European Electricity Authority Continued page 18

16 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com www.gibraltarinternational.com GIBRALTAR INTERNATIONAL 17 ENERGY

Planning & cost hurdles from page 17 Naughton-Rumbo. design and use of micro- controls. We recognise that The aim is to encourage materials can play a part renewable energy genera- we can’t always require peo- improvement of the street and as a result he hopes tion”. ple to take account of energy scene, particularly where that a review of Building Gibraltar’s Rock terrain, use and it’s more a case of there is a single owner of Regulations to take in thermal with many residential build- encouragement to take energy blocks of offices and apart- efficiency will be completed ings on steep slopes, makes saving steps.” ments which must be repaired this year. much of the new technology Planners want developers to a standard that is in keep- This will mean looking at difficult to implement. to be environmentally con- ing with the original features. how one type of glazing can Local architect Robert scious at an early, concept Double and triple glazing absorb more heat than anoth- Matto of WSRM Associates stage: where a building sits on for example, is difficult when er – a film reflects heat on the designed the Gibtelecom a site – how it is orientated – it comes to replacing old sash external plane and on the headquarters building opened and the layout, both have a windows, which are widely inside reflects heat or cooling this year in John Mackintosh part to play used; wood must replace back into the building, and Square. A favoured south-facing wood and this makes the different block works have It included energy saving project has the greatest solar project expensive. If UPC is different thermal efficiencies. measures such as pressure gain, and makes shading of used, no tax relief is given. A condition may cover ventilation flues that encour- glazing important – perhaps Gibraltar’s Development how a building is constructed. age heat to vent upwards from deep overhang terraces Plan for the next decade, “Thick walls have good ther- through the structure to or even use of blinds - where- states: “From an environmen- mal efficiency and work in reduce cooling loads, and a as north-facing properties tal perspective, energy saving much the same way as the fully glazed double skin on may need more heat. has been identified as the thick stone wall of olden day the north face to reduce light- “The weakness for us is quickest and the most cost structures– it’s really about ing, while not adding heat that we cannot say a building effective way of meeting going back to basics”, from the sun. must have a particular level of carbon dioxide reduction Naughton-Rumbo remarks. Unfortunately, “not that energy efficiency in the targets.” Here again, Spanish much of the ideas put forward design, unlike in the UKbuilding requirements go fur- several years ago and where the English Code forther. approved by planners, appear Sustainable Homes sets mini- Since 2006, Andalucia’s Improving design in the finished product – they mum standards for energyresidential and commercial The Plan to create clean, were mainly value-engineered and water use”, admitsproperties must have at least green and sustainable build- out”, Matto reflects. Naughton-Rumbo. 30 per cent of the forecast ings for the future aims to However, Naughton- energy consumption from encourage “a more sustain- Rumbo declares: “We areThermal efficiency renewables to gain planning able approach to development seeking to reduce the carbonHowever, another planning approval – and no grant is through energy-efficient footprint through land usepolicy suggests how use of available!

Targets proving tough from page 17 be a continuous source of sources. legislation governing how energy whereas the other He made the point: “This power stations are operated viable options, namely wind conversion to a low-carbon, and emissions, said the ESG, and solar, are not”, sustainable economy will pose unlike the new power station. Environment Minister Ernest significant challenges”. Britto believes. Nevertheless, the ESG Sustainable Wind , “clearly a proven says “a gradual implementa- alternatives technology and readily avail- tion of renewable energy proj- For more than two years the able in the area” and solar ects should be energetically Government has studied alter- are problematic because of followed and investment pro- native sustainable generating the limited land resource, vided once the new power sta- methods without a firm result. although wind turbines out at tion is produced”, giving time However, a Scottish world sea are also being considered for newer renewable energy leader in technology for pro- in parallel, along with a proj-Ernest Britto technologies to become com- ducing electricity from ocean ect that combines wind and to 100 per cent as it is techno- mercially available. currents is expected to report solar sources. logically and economically Renewable energy sources shortly, after two other Britto’s Environment possible.” are known to be more costly at interested companies pulled Action Plan last year stated However, he now says the this stage, although diesel fuel out. “This particular technol- that work “will continue until long-term goal – in line with costs can be unpredictable - ogy is the one that is likely to such a time as Gibraltar is EU requirements – is to meet a “fuel cost during last financial be the most promising for us completely dependent on much more modest 15 per cent year was like a roller coaster,” because it has the potential to renewable energy, or as close of demand from renewable Aleciro explains.

18 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com TAXATION

Only a few companies have a Tipped to stay put as zero physical presence in Gibraltar, mostly in financial services – some private banks, rate business tax goes insurance companies, and asset managers – as well as gaming companies. Gibraltar’s 43 years old Tax Exempt Company (TEC) regime However, they have been described disappears in January as all companies start paying a new 10 as providing “the backbone of the devel- per cent headline rate of Corporation Tax. But few – if any - of opment and growth of both the finance centre and online gambling industry” these entities based in Gibraltar are expected to desert The - a very significant part of Gibraltar’s Rock, Ray Spencer finds economy. The rise from zero to 10 per cent here are now fewer than Initially, the vast majority of such gross tax is unlikely to mean any firms 3,000 TECs; but at its companies were individuals with person- leaving Gibraltar; where would they go, height, there were over al asset holdings – piggy bank companies it is argued. To be sure, Chief Minister 10,000. The Government – with a mix of deposits, shares and Peter Caruana has in the past year or so for nearly four decades bonds, designed to handle their invest- met all Tax Exempt companies with gained £225 a year from each entity in ment income and as a tax protection T a physical presence to explain the Duty, plus an audit certificate, and at its vehicle. Generally, they were considered government tax plans. peak, received a total of more than £2m “low value-added” entities for Gibraltar. After insurance companies, Victor a year. Today, despite raising the annual Chandler was early amongst off-shore fee sharply to £450 in 2005, the income Backbone gaming companies to establish a Tax is now thought to be down to around Some companies however, owned chunks Exempt operation in 1996. £1.3m. of real estate, particularly in the UK – one He’s staying put to pay tax on That rise in Duty coincided with the company was said to own several build- profits from January. “To leave here agreement with the European Union (EU) ings occupied by government – but most would cost millions, because of the logis- that TECs would be phased out within were for individuals owning property in tical problems alone. five years, because the concept violated Portugal, UK, Spain and even the US, European State Aid rules. whilst some owned valuable yachts too. Continued P22

www.gibraltarinternational.com GIBRALTAR INTERNATIONAL 21 TAXATION

Zero rate tax goesfrom page 21 “Our server rooms are huge and to ed Gibraltar registered ships from the outside Gibraltar. uproot and move just couldn’t be done requirement of having a British Master. Vital to economy easily, because there’s virtually £1m Gibraltar’s 1965 Ordinance, similar“The concept was self promoting, mostly worth of kit that first would need to be to Bermuda and the Bahamas, hadby word of mouth”, Triay says. duplicated so we don’t lose business for a allowed ships to register with a Tonnage“Although Tax Exempt sounds attrac- week”, he told Gibraltar International. Tax rather than a company tax eventive, the income of TECs would have Now having around 250 staff when there was a foreign Master. attracted no tax in Gibraltar anyway, locally, “to train up that number of Given that Gibraltar was cut offbecause it was not Gibraltar income. Of people elsewhere would take us a year”, from the mainland when Franco closedcourse, it would need to be declared and Chandler noted, and “it’s just not worth the Spanish frontier, the TEC status wastaxed as appropriate in the countries in it – unless they put a 10 per cent betting instead created by Triay for the thenwhich it arose. ”, he adds. tax on here!” coalition government as a means of “The only real benefit being that it Joseph Triay, senior partner of attracting assets without the need for awas very convenient for the owners not lawyers Triay & Triay, has been dubbed physical presence. to have to prepare annual tax returns!” the “founding father” of Tax Exempt “There were then no communica- When publishing the Tax Act in Companies, a concept he developed tions with Spain – telephones or telexes –June, Caruana said: “Many previously along with Louis Triay of law firm Triay, and tax havens were at that time entirelytax exempt banks, insurance, investment, Stagnetto, Neish. respectable , and our clients were notgaming and other companies will begin Spanish”, recalls Triay senior. to pay profit tax in Gibraltar for the first “As was the case with shipping alltime on the same basis as all other com- Attracting assets over the world, if you gain the involve-panies. These companies are vital to our The idea arose when the then Merchant ment of owners, investment almosteconomy and to the social prosperity of Shipping (Taxation and Concessions) certainly follows.” all of us in Gibraltar. Ordinance became unworkable, because Triay explains: “Companies needed “I wish to thank and commend the Gibraltar Government failed to administration services, lawyers andthese companies for their continued amend other Merchant Shipping legisla- banks. These were licensed for bothcommitment to Gibraltar despite the tion in a manner that implemented the onshore and off-shore business, to holdintroduction of taxation for them.” provision of the Ordinance that exempt- funds derived from TECs activities PROFILE Counting on personal

craft during the early stages of the Gulf relationships War. “It’s harder when you have got a Having served in 13 ships, including five commands, thousand people to get them all singing and held down top Ministry of Defence jobs, off the same hymn sheet, but that’s one of the challenges of leadership at the Gibraltar’s Governor HE Vice Admiral Sir Adrian top.” Johns is a stalwart believer in building relationships The first half of his naval career was operational and then shore based to put to achieve success, as Ray Spencerdiscovers. back lessons learnt into practice and in year ago, 58 years old Sir 1990 he became Training Commander Adrian took up his post as the at HMS Raleigh where every person Queen’s representative, part of who joins the Navy– in those days 5,000 which role is “to do the sort a year – goes. of things Her Majesty Sir Adrian recalls: “By the time I got Amight be doing in the UK in terms of to HMS Ocean I deliberately played the visits, supporting charities and so on”. minimum part in the day-to-day running But he also has a key role in acting of the ship. as a conduit between the Gibraltar and “I spent my entire time walking UK governments, ensuring that both around talking to people, getting a sense sides fully understand and appreciate of what was going on, applying leader- each other’s views. ship if there was unhappiness anywhere, The Governor has fewer executive making sure people were informed, powers these days under the new ensuring good communications.” Constitution, but the thing that has In his three year term as Governor struck him most forcefully, “partly (with an option to stay an additional because Gibraltar is a small jurisdiction, year), he is still doing much the same. is that the people here – Government, “The Governor is not an Ambassador, so my job is not to deliver Ministers, people in key positions, civil Unlike most of his contemporaries UK policy, but to promote UK policy servants – have lived and worked here locally, he shunned a career prompted and to make the Chief Minister and gov- all their lives and understand the place by the nearby Royal Air Force base and ernment aware of the UK view on policy intimately. instead chose the Navy, starting out as a issues and to feed back their views to the “It’s in their blood and they have a sub-lieutenant in submarines – and UK”, he notes. long corporate memory. They set a shortly after joined the Fleet Air Arm to The UK team, he explains, is dealing great deal of store by personal relation- become a helicopter pilot. with things 1,000 miles away “and with ships and so I have gone out of my way “I loved every minute of it – a fabu- the best will in the world, they need the to develop personal relationships and lous way to earn one’s living - and in the context and understanding of how also to facilitate personal relationships Navy as well”, he enthuses, even though things are being viewed in Gibraltar”. between key people here and for exam- he’s allowed his flying licence to expire. ple, the new government and adminis- In submarines the appeal was tration in the UK”. fuelled by “the sense of camaraderie and It was a skill Sir Adrian learnt and professionalism that was quite unique in No axe to grind applied throughout his 35 years in the the Navy or anywhere else. There is a He has a weekly lunch exchange of Navy. huge sense of Esprit de Corps and team views with Peter Caruana, which “is a working.” good chance to chew over what’s hap- Years later he tried to inculcate that pening in Gibraltar and the UK’s and Camaraderie same sense of team work when in 2001, Gibraltar’s position on things. Having passed the Admiralty Interview after being appointed Commander of “I am in regular contact with the Board in 1970 whilst still at University the Order of the British Empire (CBE) in Ambassador in Madrid, because he studying physics at Imperial College the New Year Honours, he was given his needs to understand the Gibraltarian London, he went to the Britannia Royal final command of the Navy’s largest view, and I have a regular three way con- Naval Training College in Dartmouth, ship, HMS Ocean. versation between the Ambassador, three years later, achieving his childhood It was a Commando Helicopter London and myself to compare notes.” dream, after seeing dozens of naval Carrier that two years later had the job Most is conveyed to the Chief vessels in Devonport harbour, on trips of delivering 800 Marines to the front- Minister – “there’s very little that is so by train from his Cornish home. line with the help of four large landing Continued on P26

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Relationships from page 25 couple has made a point of mixing with Gibraltar International went to press. sensitive” – but Sir Adrian observes: residents and visitors, doing everyday Sir Adrian sees acceleration in the “Because I am not an ambassador and things like local shopping and enjoying process of transferring MOD Crown not instructed in the same way as in the cafés. land – now less than 20 per cent of Madrid, I can make my own judgments “It would be too much to say we Gibraltar – that is surplus to defence and offer advice both ways. It’s a rather have fully integrated into Gibraltar soci- requirements to the territory’s govern- nice position.” ety, but as far as we can, we have tried ment. And he explains: “Not being a to be part of the community, to under- The new Gibraltar Constitution, Foreign Office career employee, I have stand what makes Gibraltar tick – not implemented almost four years ago, no axe to grind whatsoever and I have just Government - but the people as making the territory self-determining, no career structure. well” and as a result, he now feels “very retains a role for the Governor in the “I’m here on appointment and they comfortable with my role”. areas of national defence and security, can sack me if they want to – I hope they “which I would hope to exercise with a don’t – although it might be difficult light touch”. because the Queen has appointed me, so But Sir Adrian notes his role is also I can speak my mind in a way that per- to ensure that UK interests and the haps career diplomats might be more Governor’s role are valid and protected. cautious about.” “This is a British Overseas Territory and Having undertaken various top the UK retains ultimate responsibility MOD jobs, the most recent being in and therefore has the liability; ultimate- 2005 as Second Sea Lord and ly it is the UK’s reputation and liability Commander in Chief Naval Home that is at stake. Command, on his retirement he was However, Sir Adrian has already “Gibraltar absolutely understands appointed Knight Commander of the had to face-up to the UK budget deficit that point, but we will always have Order of the Bath (KCB) in the 2008 situation by reducing his Residency sup- debate about parts of legislation and New Year Honours. port staff at The Convent by 25 per cent transposition of law, for example.” Retiring from the Navy, Sir Adrian to bring the total team, including policy, hoped to take up City management and maintenance and catering, down to 19 leadership consultancy work, but some people – half that of a decade ago. Treading carefully months later, he was asked if he might He found it harder to make the The Constitution does not set out pre- consider one of several Governorships required savings given a £1m budget, cisely what should happen in every area, that would be available over the next compared to the £700m he had as a top “so it is all going to occur through few years. level Naval budget holder “where, in a precedent, which means both parties – “I was quite excited by the prospect sense, you are dealing with big blocks the UK and Gibraltar – are treading and after interview, unexpectedly found and in terms of resources rather than carefully, because they don’t want to I’d been selected for the Gibraltar role money: here it is cash and how we are concede ground where they don’t need from a short list of four - I hadn’t spending it on a day to day basis and to. planned to take my uniform out of the squeezing all of that to make sure that “So maybe it’s going to be another loft again”, he muses. we haven’t got any fat”. three to five years before all of those And he admits: “If more cuts are things are settled”, he explains candidly. required, our outputs will be reduced. As someone who has brought ships 25% budget cut I’m trying to make sure that we deliver to Gibraltar many times since 1974 - he once cycled non-stop to the top of the He did extensive research “to get under what I should do as Governor efficiently Rock - he now finds Gibraltar particu- the skin of Gibraltar and its issues, but and sensibly and use our entertainment larly good for his strong interest in his- it’s only when you are here and talk to in a more focused way to promote our tory and heritage and is Patron of the Gibraltarians that you can really under- objectives.” Heritage Trust. stand and put things into context. That includes over 3,600 people “I wish I’d learned and read more in “Although this is a British Overseas attending Convent functions each year, these areas earlier in my career, because Territory, the people here are ranging from official dinners and recep- looking back understanding what has Gibraltarian and that is different from tions, the Queen’s Birthday Garden gone before often gives you a better per- being Britons. They have a history that is Party, an Open Day, and a Christmas spective.” completely different – although inter- Fair. In addition there are school guided With this in mind, Sir Adrian linked in many ways - and in recent visits, guests attending various events believes it “very important that the rela- memory things have happened here in hosted there for other organizations, tionship between the Government of relations with Spain that have coloured and special overnight guests. Gibraltar and the new UK government the way people think and it’s very As Commander-in-Chief, Gibraltar has got off on the right foot and contin- important to understand.” with some 500 service personnel locally, ues to do so, because if that relationship Married to Suzie, a former Wren he he’s alive to the implications of expected is difficult then everything else becomes met and married a couple of years after UK defence cuts, being announced as difficult”. graduating from Dartmouth, he says the

26 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com PEOPLE AND PLACES PEOPLE AND PLACES An oasis... Golt stays professional Feeling a little like poacher challenges, has the new role of turned game keeper, 64 years other group offices in the executive chairman of Aon RBS service, he refused to old Clive Golthas not only four flights a week giving Middle East and Eastern Insurance Managers (Gibraltar) transfer to Jersey and run switched from being a availability on Monday, Europe, where he gained after 20 years with the group in Gibraltar operations remotely journalist to become Gibraltar Wednesday, Thursday and extensive audit experience in the Isle of Man and resigned. Since then he has Government media director, Friday, and London Luton is to financial services, particularly (IoM), where he spent been working as but he’s also left behind his be connected by a Saturday banking and capital markets, much of the time managing director of in a busy world ambition to become a Member Lee Francis, Ian Rush and Franco Cassar flight, making that service daily. and in telecommunications. providing insurance a fledgling Cypriot of Parliament for the GSLP Tim Jeans, Monarch’s In 2007 he became PriceWaterhouseCoopers, and reinsurance and Israeli foreign socialist Opposition party. managing director, said “We bedrooms Director in the Assurance Government of Gibraltar- solutions for multi- exchange and retail David Newman have been overwhelmed by the 104 Bedrooms and suites in a colonial Such is the regard for his section of the firm, developing Treasury, Finsbury Trust, national clients based derivative products style all with a sea view demand for flights between radio and newspaper the audit department and, for Deloitte, Triay Stagnetto Neish in London. business, “but the Gibraltar and the UK this professionalism, the past few years, has been and J Bassadone. He regards timing became conference facilities summer and are pleased to however, that his responsible for the learning, Watched by some 100 Gibraltar as “a look-ahead’ extended and wasn’t Full upgraded conference facilities respond to this by continuing to available for board meetings, training appointment drew education and people, tournament winner was domicile, compared with IoM’s right for me”. add extra services.” courses and presentations plaudits from across development of Gibraltar the Hassans Team, beating “more mature market where Blight, whose surprise Barclays Premier He added: “We are very the political office staff. Barclays Wealth “by a good there is less potential for appointment came after Internet League excited to be expanding our spectrum. margin”, a bank spokesman growth” and Gibraltar being trawling internal candidates FREE Wireless broadband available Tournament within the EU “is a real bonus, from across the Swiss group services from Gibraltar as a throughout the hotel and an internet Chief Minister noted. However, Barclays saved Finance is taking an ever new terminal at the airport, room for our guests to use Peter Caruana, face with the bank’s 21 years along with the enabling attitude and external applicants, was Barry Pillans larger role in the world which opens in summer 2011 whilst noting Golt’s old Carl Ignacio being named of the Regulator offering a “overwhelmed by the local weddings will see better facilities for political history and being an of football and Barclays Man of the Match. quick turn-round for new response and the many The Rock is an ideal wedding venue customers and an enhanced opponent at a past general Wealth (Gibraltar) played their business entrants”. expressions of goodwill towardTelecoms hit whether it be a small intimate wedding part to the full when they Credit Suisse – without doubt travel experience.” or large family gathering. We are also a election, said: “I have never Pre-tax profits of Gibraltar’s arranged for the Barclays recognised venue for civil marriages doubted his personal integrity Insuring changes dominant telecommunications Premier League Trophy to be and ceremonies can now be conducted and his professional pedigree as Chris Johnson(49) has become provider, Gibtelecom, fell by 17 in various parts of the hotel seen on The Rock for four Around a journalist.” chairman of the Gibraltar per cent to become £8.2m last days. Swimming Pool A former GBC TV news Insurance Association replacing year, largely through adverse Outdoor swimming pool with pool anchorman, Golt earlier had The winner of the Premier Paul Sykes, who has been currency exchange rates for side bar and pool side menu. We earned a reputation as an League gets to have the Trophy promoted by AON Insurance European and US imports, welcome private pool membership, investigative, political and for just two weeks, but to become managing director About higher electricity charges, lower our lido club, with private pool hire current affairs reporter, Bank interest receipts. for parties and barbecues Barclays as the sponsor for the of its Guernsey operation – a working previously for Sky, the past four years, has it available move back to where he started But the 2009 annual report Restaurant BBC and other media in for most of the time and takes with the firm seven years ago. Stuart Brown has become shows that the Gibraltar The restaurant has stunning views Madrid, before becoming New it to be seen in numerous & An independent insurance Aon’s chief operating officer in the premier banking operation Government and Telekom over the bay. Our “house” menu is People Editor, the Opposition’s countries “emphasizing that we excellent value for three courses consultant, Chris first moved to Gibraltar.. on the Rock”. Slovenia, Gibtelecom’s joint publication. are a global brand”, explains including an aperitif Manzanilla, Gibraltar 23 years ago after He hopes to remain as owners, each received £2.95m He replaces the late Franco Cassar, Barclays Wealth olives and coffee. A full á la carte being seconded by Norwich unpaid chairman of Gibraltar dividend, a distribution only 7 menu along with a superb eclectic Francis Cantos, who passed (Gibraltar) manager. Gibraltar switching Union to the Rock. Finance Centre Council – the per cent down on a year earlier. wine list is also available away in mid-2009. “Our view is that the to Swiss banking Experienced in diverse body acting as a central Sales were marginally children of the community are Kerry Blight, head of wisteria terrace areas of insurance including government soundinghigher at £31.7m in what Tim our customers of the future, so RBS Gibraltar The Wisteria Terrace for lunches, captives, reinsurance and motor board for finance- Bristow, the chief executive, we look to bring the Trophy to operations for 18 years, dinner, barbecues, afternoon teas, business, Chris was Paul’s related trade bodies called “a challenging year” evening drinks and informal dining local communities”, he adds. has been appointed Scot gains predecessor as managing with a remit to help against increased regulatory Hundreds of local school chief executive of Barbary bar Scotsman Barry Pillanshas director of AON’s Gibraltar give the sector a commitment – around £1m was become the fifth Partner of children had the opportunity to private bank Credit Barbary Bar and terrace for a operation until 2006. Since coherent and paid – and significantly higher see the heavy 4 stone trophy Suisse (Gibraltar). relaxing drink and for the wine PricewaterhouseCoopers then, Chris has developed an authoritative voice. investment of £19m (£9m in and have photographs taken buff, a choice of nine wines by (PWC) Gibraltar – the local independent insurance Canon From mid- 2008) in providing standby the glass with it. Kerry Blight partnership last added to its Consultancy. November, he replaces Flying more electricity generation Ian Rush, ex-Liverpool Lounges top echelon nine years ago. Since summer Aon’s Malta Thomas Westh Olsen, who left Extra flights linking Gibraltar equipment, upgrading 30+ Football Club star striker, Colin Vaughan, PWC’s operation has been separated Gibraltar in July after 13 years and the UK from 27 March telecommunications sites, and Take a good old fashioned English accompanied the Trophy for tea in one of the spacious lounges local senior partner, from Gibraltar control on the to assume market responsibility 2011 have been unveiled by payment towards its ground- much of the time, including at commented: “In that time the basis that they are “competing for building teams in six Monarch, the first airline to breaking joint venture Europe a Barclays client dinner, and for firm has almost trebled in size, domiciles”, but 43 years old countries for the bank from reveal its plans for the summer India Gateway submarine cable the first Barclays Intermediaries with staff numbers over 100 Paul remains a local Board Switzerland. season and around 350 project. He forecasts more 5-a-side tournament, in which and Barry has contributed to director. Blight had been country additional seats compared to a growth in 2010 in just about all seven client teams also Europa Road, Gibraltar our significant growth.” David Newman, who says manager for RBS Gibraltar for year ago. areas of business and sales up participated, including Hassans, Tel: +350 200 73000 Pillans promotion comes he relishes change and 20 years until summer 2009 to £34m. Fax: +350 200 73513 The Manchester link has six years after moving from when after a total of 30 years E-mail: [email protected] been stepped up from three to www.rockhotelgibraltar.com

28 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com www.gibraltarinternational.com GIBRALTAR INTERNATIONAL 29 TAXATION TAXATION

by the further exclusion of categories Business and individuals to of savings and passive income from interest received by banks or moneylend- out its profit making activities elsewhere. taxation. ers as trading receipts. In the case of With neither liability to tax nor with- In the case of the investor into a fund both, trading receipts are defined to holding of dividends paid to non-resi- benefit from new tax law there are changes which make the trust exclude the interest which would arise dents, group profits can flow through or That is not only an incentive for regime even more attractive. from a Treasury function. be invested in Gibraltar without taxation. A new Tax Act has signaled the end of local people to invest for their future, but Income from a fund This gives banks and moneylendersIncreasing attraction Gibraltar as a jurisdiction that relied also when combined with the lack of which is available to the the same advantages as allThere is a lot more detail to the legisla- Capital Gains Tax or any sort of general public is no longer other companies wheretion but, overall its aim is to create a cor- on administrative and statutory ring Estate/Wealth tax, it is a powerful attrac- taxable regardless of how the possibility of usingporate low tax environment and lay the fencing and secretive tax exempt tion for those with savings income who the income arose in the Gibraltar as a Treasuryfoundations for, not only the security of wish to relocate from a high tax jurisdic- fund. base arises. the corporate environment, but also the companies and trusts to attract inward tion to a more economically friendly If a fund is not avail- Effectively a non-continued reduction in the tax burden on investment, as former Advisor to jurisdiction. able to the general public, a Gibraltar group companyindividuals. The top rate of tax has also been ‘look through’ basis is used can borrow money from The environment created by the new the Income Tax Commissioner, Chris reduced to 29 per cent for those earning and tax is limited to what- the Gibraltar Treasurylegislation not only places Gibraltar White, explains. up to £353,000; above that level, tax ever it would have been if company, receiving aamongst those jurisdictions who comply rates begin to fall. the recipient had received the income deduction in accordancewith all international codes of conduct n creating a level playing field for establishment outside Gibraltar. The effective rate of tax on earnings from the entity underlying the fund. with the laws of its jurisdiction, and therelating to tax behaviour, but also leaves both local and inward investors, It is interesting and re-assuring toof, say, £1m is 20 per cent, with anything Treasury company will not be taxed onit as an attractive and tax efficient loca- Gibraltar has swept away the note that the UK Government has recent-above that charged at 5 per cent. the receipt of the interest. tion for individuals and businesses who obstacles to it taking full member- ly launched a consultation paper explor- Tax on interest limited The changes made in the new Act arewish to locate either in whole or in part ship of the company of respectable ing the possibility of moving parts of its Again the entity will have the advantage also beneficial for companies receivingto a pleasant, tax efficient, new home. Ijurisdictions which no other jurisdiction own tax system to a territorial basis. Trusts tax limited of the absence of tax on savings and pas- dividends from subsidiaries. has grounds to black list or censure. The quid pro quo for these significant sive income which means that with very Gibraltar already does not tax the Chris White, a tax partner of As Gibraltar International went to Sustainable reductions in corporate and personal tax- few exceptions - e.g. a fund investing in receipt of dividends from EU subsidiarylawyers, Hassans, helped devise the new press in October, the new Act was set to That the 10 per cent tax rate is sustain- ation is a new system of self assessment, Gibraltar real estate - there will be no tax companies, and has now removed the Tax Act. become law. able over the long term was demonstrat- legislation to modernise tax collection payable by the investor. taxing right to any part of a dividend E-mail: [email protected] Although the European Court of ed by the details of the state of the econ- and extensive measures to counter avoid- Taxation on interest is limited to that received from a company which carries Justice had not denied Gibraltar the omy announced in the June budget. ance or evasion of tax. opportunity to implement a 0-8 per cent At a time when most of the Although taxation of trusts and ben- regime, the Government took a more economies of the Western World are in eficiaries of trusts has been introduced responsible approach, more consistent dire straits, the economy of Gibraltar is where the beneficiaries of a trust are out- with modern requirements for the accept- alive and well! side Gibraltar, the taxation position ability of Offshore Finance Centres. In the year to 31 March 2010, eco- remains much the same as it was before. It retained the principles of the cur- nomic growth was 5.4 per cent and the Taxation on trust income is limited rent Tax Act, modernised it and reduced budget showed a surplus of £29.4m on a to trusts with Gibraltar resident benefici- the rate for corporate entities from 22 to Gross Domestic Product (GDP) of aries and taxation on beneficiaries is 10 per cent. £848m. Public debt represented 15.2 per restricted to distributions which can be The only exception to this low rate cent of GDP. matched with the taxable income of the of tax will be a surcharge of an addition- By comparison, the UK and much of trust reduced by offsetting of any under- al 10 per cent on utility companies (elec- the rest of the developed world are strug- lying tax which has been paid by the tricity, telecommunications, water, petro- gling with huge deficits; UK debt is about trust. leum and sewage) and any company 70 per cent of GDP and in many For this purpose, those High Net which has a dominant market position countries, approaching 100 per cent. Worth Individuals who have Category 2 and abuses it. The jurisdiction’s state of economic status and their spouse and children are The territorial basis of taxation has health has enabled not only the reduction treated as not resident. been retained and only tax income of the corporate tax rate to 10 per cent, If neither the trust nor the beneficiar- ‘accrued in’ or ‘deriving from’ Gibraltar but also has several subsidiary effects. ies are subject to tax, a licensed trustee is covered. will have no need to make returns for the The government has amplified the trust or to make the trust known to the definitions based on case law and Savings gains Commissioner of Income Tax. The principle of reducing taxation of ensured that companies operating under The programme of reducing taxation of savings and passive income is carried on a licence granted by Gibraltar, or ‘pass- savings and passive income has been into funds and their investors. porting’ into Gibraltar under a licence advanced by exempting all interest on issued elsewhere (e.g. insurance compa- investments (i.e. interest other than inter- nies), are entitled to take advantage of est earned by banks and moneylenders as the 10 per cent tax rate while not suffer- part of their trading income), royalties, Funds exclusions ing tax on the activities they undertake and the part of a dividend paid by a com- through a branch or permanent The position of the fund itself is pany which relates to its non taxable unchanged by the new Act and the same profits. exemptions apply as before, strengthened

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