Moving from the UK to Cyprus?
Here's your tax roadmap.
UK expats in Cyprus benefit from 0% dividend tax under non-dom status, no inheritance tax and a 60-day residency rule. But HMRC rules still apply until you formally break UK tax residency.
Before you can benefit from Cyprus non-dom status, you need to break UK tax residency. HMRC uses the Statutory Residence Test (SRT) to determine whether you are UK tax resident in any given year.
The key test for most expats moving to Cyprus is the 'third automatic overseas test' — spending fewer than 16 days in the UK in a tax year once you have left. The SRT is complex and depends on your individual circumstances, ties to the UK and day counts.
UK ties include: family, accommodation, work, 90-day tie, country tie.
If you leave the UK part way through a tax year, split year treatment may apply — meaning you are treated as UK resident for the first part of the year and non-UK resident for the second. This affects how your income is taxed in the year of departure and can significantly impact the tax due on income received before and after you left the UK.
UK pension income is generally taxable in Cyprus under the UK-Cyprus double tax treaty. Cyprus residents can elect to pay a flat 5% rate on foreign pension income over €3,420 per year — significantly lower than the UK's 20–45% income tax rates. This election is made annually on the IR1 tax return.
UK-Cyprus double tax treaty
The UK and Cyprus have a double tax treaty in force since 1975 (updated in 2018). The treaty prevents double taxation of income and provides tie-breaker rules for determining residency where both countries could claim the right to tax an individual. Under the treaty, most income is taxable only in the country of residence.
For UK expats who have properly established Cyprus tax residency under the SRT, the treaty means that UK-source income — including rental income from UK properties — is generally taxable in Cyprus at Cyprus rates, with credit for any UK tax withheld. UK rental income paid to non-residents is subject to a 20% UK withholding tax at source, which can be credited against Cyprus tax.
Moving from the UK to Cyprus?
Ask Taxerly about your specific situation or book a consultation with a licensed Cyprus tax advisor who understands both UK and Cyprus tax.