We sort your Self Assessment for you. £169, all in.

Fast, effortless and 100% online.  Learn more

We sort your Self Assessment for you. £169, all in.

Tax when you retire to Cyprus from the UK

  • 3 min read
  • Last updated 10 Jan 2023

Dreaming of retirement in Europe’s sunniest destination? Here’s your tax guide if you want to retire to Cyprus from the UK!

Firstly, what are the requirements 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:

  • Prove an annual income of at least €9568.17 which is approximately £8325.85 (without having to work)
  • Have a further income of £4014.24 for every dependent 😮‍💨
  • Have no criminal record 🚫
  • Purchase or rent a property prior to moving 🏠

Do I have to pay tax on my pension when retiring to Cyprus?

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:

  • Pay at a flat rate of 5% on the excess of €3,420 (this sum being exempt)
  • Pay at the normal scale rates of income tax

No tax would be great, but having some sort of choice is better than no choice at all, right?

Do I have to pay any other taxes?

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!

How do I make my application? 

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:

  • Title deeds or proof of registration for housing
  • Bank confirmation letter to prove you have a minimum of €15,000 deposited
  • Original and photocopy of passport
  • Bank statement
  • Statement of source of abroad income
  • Proof of occupation
  • Evidence of residential address
  • Original bank reference letter (Not older than 6 month)
  • Evidence of health insurance
  • Original police clearance certificate
  • Two passport-size photos
  • Original or certified copy of marriage certificate (if applicable)
  • Original or certified copy of birth certificate (if applicable)

(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:

  • Temporary residency within 90 days of arrival (this costs €140)
  • Private medical insurance

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%. 😅

To move or to stay? 😮‍💨

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.

TaxScouts Newsletter

Want regular tips from us?

Sign up for important updates, deadline reminders and basic tax hacks sent straight to your inbox.

"*" indicates required fields

This field is for validation purposes and should be left unchanged.