Retiring in Cyprus

When you have worked hard your entire life and are finally able to retire and be free to spend your days as you choose, moving abroad can become a real and appealing option. Many British retirees look to move abroad once retired, for a warmer climate (which certainly helps those niggling aches and pains) and, for a more relaxed lifestyle.

The island of Cyprus is one example of a country that has had a large influx of British retirees over the past 15 years, mainly due to its warm Mediterranean climate, its vast existing British population and its likeness to the UK in that cars are driven on the left hand side of the road, electricity is operated via a three pin plug socket, just as in the UK, English is widely spoken and the cost of living and crime rates are very low.

Buy or Rent

Initially, if you are looking to retire to Cyprus you will need to consider the area in which you want to live. Most retirees choose to rent property initially so that they can assess the suitability of an area of the island for long term living and investment. Renting initially is always advisable for this reason, unless you are familiar with the island and the location you are looking to settle in.

A pretty village house in Cyprus

Once confident of a permanent retirement to Cyprus, many British retirees choose to invest in a property. Some, as their permanent residence, others, in addition to their existing home in the UK. The latter gives the option to either reside permanently on the island or to come and go between both Cyprus and the UK throughout the year.

With Cyprus property prices at their most advantageous currently, and a predicted increase in both the number of property sales and their value over the next 5 to 10 years, now is an excellent time to consider both the immediate lifestyle benefits of a Cyprus property purchase and, the potential long term financial gain. When purchasing a property in Cyprus it is always advisable to seek guidance from a currency specialist who can advise on the optimum time financially to convert GBP to Euros for both your property purchase and other large ‘on island’ investments.

Long Term Retirement Benefits

The great news for British retirees who are considering relocating to Cyprus is that Brexit negotiations between the UK and Cyprus have already confirmed that British retirees residing in Cyprus will continue, after Brexit, to receive pension payments directly into their Cyprus bank account with no cap on the monthly amount. An advantageous exchange rate between GBP and Euro’s will also make monthly spending go further, in addition to the already low cost of living that Cyprus offers.

A Brexit concept

What is your Domicile?

Some British retirees, having invested in property on the island spend varying amounts of time between the UK and Cyprus. Whilst this is perfectly acceptable, you must be clear as to your domicile, the country where you spend the majority of your time (min 183 days per year).

Moving to Cyprus or investing in property in Cyprus does not make it your country of domicile. Legal steps and proof of residency need to be in place to change your country of domicile to Cyprus. Your country of domicile determines your income tax (from investment or employment), inheritance tax and capital gains tax. Cyprus offers some excellent tax benefits and it may be in your best interest to declare it as your country of domicile. You should take legal advice as to how this will affect your individual circumstances and assets.

In addition, it is advisable to have a separate will made for your Cyprus assets as a UK will does not automatically cover your Cyprus property which, if you fail to make a separate will, may not be distributed in accordance with your wishes or may be tied up in probate for years in the event of your death.

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