Living in Cyprus tax

If you’re a UK national living in or thinking about moving to Cyprus, it’s important to review your financial planning. This should look at tax efficiency and how your estate planning, investment strategies and pensions can work most favourably for you and your new life in Cyprus.

With personalised financial advice from Blevins Franks, you can make the most of what you have while keeping up with the tax rules in both Cyprus and the UK.

Our team of specialists based in Cyprus, Malta and London work together to provide tax advice and financial planning solutions to expatriates living in Cyprus. Our Paphos office provides tax and financial planning to expatriates across the Republic of Cyprus, including Britons living in or moving to Paphos, Limassol, Larnaca and Nicosia.

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How You're Taxed in Cyprus

Any tax regime is complicated and Cyprus is no exception, including unique taxes like the ‘defence contribution’ and ‘immovable property tax’. Expert advice is essential to understand what the rules mean for you and how they interact with UK taxes.

Once you’re resident in Cyprus, you could pay:

  • Income tax of up to 35%
  • Potentially no tax on bank interest and dividends if you’ve lived in Cyprus for under 17 years
  • A ‘defence tax’ on interest (30%), dividends (17%) and rental income (3%) if you’re domiciled in Cyprus
  • An optional special rate of 5% on your UK pension income
  • Capital gains tax of 20% on Cyprus real estate only
See more about tax planning

Estate Planning for Cyprus

While there’s no inheritance tax in Cyprus, the law applies ‘forced heirship’. This means that your spouse and children will inherit a pre-defined proportion of your estate, regardless of what your will says.

UK nationals may be able to override this rule through an EU regulation that allows you to apply British law to your estate. However, it’s unclear how this will work in practice and there may be more effective ways to achieve your aims according to your individual circumstances.

We can present all legitimate options to ensure your estate is distributed according to your exact wishes while protecting your heirs from paying more tax than necessary.

Be aware that most UK nationals remain liable to UK inheritance tax , regardless of how long they’ve lived outside the UK. You could potentially avoid this by cutting ties with the UK to become a UK non-domicile. However, if you’re non-Cyprus domiciled for defence tax purposes this could negatively affect your claim. It’s essential to seek expert advice so you can minimise your tax liability in a way that suits your own circumstances.

See more about estate planning

UK Pension Planning in Cyprus

Now there’s more choice than ever for taking out your UK pension benefits. Blevins Franks can advise you on the pros and cons of each option as well as the local tax implications in Cyprus, so you can make a fully informed decision on the best solution for you.

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Investment Advice for Cyprus

Our specialist expertise can make sure your finances are structured as tax efficiently as possible for Cyprus, with an investment strategy personalised for you.

We start with an objective assessment of your risk profile so that we can recommend portfolios designed around your personal situation and objectives. We have access to some of the world’s best investment managers to make sure your money works as hard as it can.

See more about our investment services

Speak to Blevins Franks to take full advantage of the tax and investment opportunities available to British expatriates living in Cyprus. Arrange a free consultation with a local adviser.

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Tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; individuals are advised to seek personalised advice.

The Blevins Franks Guide to Living in Cyprus

Living in Cyprus, buying a Cypriot property or planning to move there? Our paperback guide pulls together the key tax and financial information you need to know to make your life in Cyprus as tax-efficient and seamless as possible.

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