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Dreaming of retirement in Europe’s sunniest destination? Here’s your tax guide if you want to retire to Cyprus from the UK!
Retiring to Cyprus is rather straightforward. Sike! It was straightforward… until Brexit, of course..
Now, to even be considered to retire to Cyprus from the UK, you have to:
Cyprus is a very popular destination for retiring. This isn’t only because of the sandy beaches and fresh Mediterranean cuisine. It’s also due to the favourable treatment of pensioners.
So in short, yes you do have to pay tax. However, you get to choose how you are taxed each year. You have these two options:
No tax would be great, but having some sort of choice is better than no choice at all, right?
Although there is income tax in Cyprus if you earn over €19,500, the application required to retire to Cyprus from the UK actually prohibits you from working. So it’s probably worth leaving that one out. 😅
The good news is that if you become a resident in Cyprus, you will only be liable to pay local capital gains tax on gains from the sale of real estate located in Cyprus – property in the UK or elsewhere is exempt.
As for inheritance tax, there is no such thing in Cyprus! Residents can pass assets down without them having to pay any local tax. Life as it should be! 🤩
Bear in mind, if you’re UK-domiciled, you will still be liable for UK inheritance tax.
Interest and dividends are subject to something called defence contributions. However, non-Cyprus domiciled are exempt from this, so don’t worry too much about it!
Whilst the requirements can’t be the easiest to meet (I mean £4k per dependent! 😮💨), there are clearly incredible benefits. So now you want to make your application – we’ve got you!
To apply for residency to retire in Cyprus from the UK, you will need to submit a category F resident application to the Civil Registry and Migration Department in Nicosia.
The application costs a cool €500.
This will have to be accompanied by these documents:
(Darn it, Brexit🤦)
The process may take around two years. If you are already living in Cyprus during the application process, you will have to arrange:
You may be able to acquire permanent residency in as little as two months if you can buy a brand new residential property or two for around €300,000. For this you will have to apply under Category 6(2).
Basically, if you’re a part of the small minority who’ve got the funds to throw money at their problems right now, chances are, those problems will vanish. Lucky 1%. 😅
We can’t help you decide whether you’d rather stay in the UK or migrate to Cyprus for retirement, but we can help you with your tax return and offer professional tax advice. Find out more about our services here.
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