With the cost of living in the UK going up, the rate of interest available on savings income going down and the weather sadly not improving, there are more reasons than ever for those approaching retirement to consider moving abroad to live. If you’re currently contemplating retiring to the sun and are wondering about which country is likely to suit your lifestyle requirements and your pocket, have you considered reasons to retire to Cyprus?
There are many reasons to retire to Cyprus – either the North or the South of the island, and in this article we will explore all the points in favour of living in Cyprus in retirement so that you can determine whether it is the right country for you.
Located in the Mediterranean and lying south of Turkey, Cyprus is affordably accessible in four and a half hours from the UK if you fly to either Larnaca or Paphos airports. Because direct flights to Ercan airport in Northern Cyprus are not in operation and you have to fly via Turkey, flights to North Cyprus usually take five and a half hours. However, you can of course fly in to the airports in South Cyprus and simply arrange a transfer across the border.
One of the main attractions in Cyprus’s favour as an island perfect for those wanting to retire abroad is the weather. With over three hundred sunny days on average each year and with a long hot summer guaranteed, Cyprus is perfect for those who want to soak up the fine weather and enjoy an outdoor-centric lifestyle in retirement.
So, aside from relatively easy and affordable accessibility and an undeniably fantastic climate, what else does Cyprus have in its favour as a retirement destination?
Well, financially speaking the government of the Republic of (South) Cyprus have made concerted efforts to be as tax attractive as possible to attract retirees to the island. As a citizen of another EU country you are free to move to live in Cyprus as long as you register with the authorities, and then you can enjoy your pension income taxed at only 5%. Alternatively, because the annual personal tax allowances are so favourable in Cyprus (around GBP 14,600 at time of writing), those who earn less than this in pension income can avoid paying any tax at all.
As Cyprus has a double taxation agreement in place with the UK, it is possible to get pension payable gross in Great Britain and then opt in to the tax system in Cyprus.
The cost of living in Cyprus is another benefit in its favour as a retirement haven, then there’s the fact that British retirees benefit from having their State pension linked to inflation – in certain countries, if you move abroad your pension is fixed the day you leave the UK, this is not the case in Cyprus. Additionally you can claim your Winter Fuel allowance from the UK and you can earn bank interest and share dividends tax free once you become resident in Cyprus.
A final advantage of living in Cyprus in retirement that many people cite is the fact that it does not have inheritance tax…but, it is very difficult for expat retirees to benefit from this advantage as the nation to which your estate pays inheritance tax relates to the nation in which you were deemed domiciled at death rather than the nation in which you were resident.
Determining a country of domicile is quite subjective – if you retain any form of asset in the UK or any attachment with the country such as having a bank account or even remaining on a dentist or doctor’s list, you will be deemed UK domiciled. So we don’t really rate this as an advantage of living in Cyprus in retirement…however, as we hope we have demonstrated, there are many other benefits from which you can gain and profit.