Income Tax

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bitterlemons
Posts: 19
Joined: 10 Jan 2008 13:05

Income Tax

Post by bitterlemons » 28 Jan 2008 16:53

Hi Nigel


I am a UK resident and as such pay UK tax. I spend about 190 days a year in Cyprus, so do I still have to pay tax on the interest from my savings account in a UK building society ?

Thanks - any help would be much appriecated !



Nigel Howarth
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Re: Income Tax

Post by Nigel Howarth » 28 Jan 2008 18:58

Hi bitterlemons,

While you're still a UK resident, you'll be taxed under the UK system. So yes, you will have to pay interest on your UK building society savings accounts, etc, to the UK Inland Revenue.

But if you spend more than 183 days a year in Cyprus, you should consider becoming resident here as there are a number of tax advantages:

Assuming that you're retired, you will be able to get your private, company & state pensions paid gross in the UK and then pay tax on them here. PricewaterhouseCoopers produce a tax factsheet on Cyprus that you can download by clicking here.

(And if you spend more than 183 days a year here in Cyprus you should have registered with the Inland Revenue here).

The situation is more complicated if you're still working. The UK authorities may consider that you're still a UK resident for tax purposes, even though you've registered with the authorities in Cyprus. And even if you're retired, there can be tax issues if you spend more than 90 days in the UK in any tax year.

If you want to explore the various possibilities further, you'll need to take professional advice.

Regards,


Nigel Howarth
Independent information & advice for Cyprus property buyers
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bitterlemons
Posts: 19
Joined: 10 Jan 2008 13:05

Re: Income Tax

Post by bitterlemons » 29 Jan 2008 12:42

Hi Nigel
Thanks for your quick reply. That was really helpful - just sorting ourselves out at the moment after the move.



Nigel Howarth
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Joined: 24 Oct 2007 14:38
Location: Erimi, Limassol, Cyprus
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Re: Income Tax

Post by Nigel Howarth » 29 Jan 2008 14:11

Hi bitterlemons,

You're welcome.

If you want to be taxed in Cyprus, rather than the UK, you'll need to register yourselves with the 'Aliens Department' in Cyprus and with the Inland Revenue here. Here are some web addresses for you:

1. Registration with the Aliens Department. You can find the forms at: http://moi.gov.cy/new/index.php?m=62&sm=88&l=2

2. Information on moving overseas. You'll find more information about moving overseas from the UK Centre for Non-Residents at http://www.hmrc.gov.uk/cnr/ (including getting relief from UK Tax).

3. To get relief from UK Tax, You'll need a 'DTI Individual Form' (possibly more) that you can find at: http://www.hmrc.gov.uk/cnr/dtindividual.pdf

You'll need to register with the Aliens Department first and then, to register at the Cyprus Tax Office, you'll need:

Alien Registration Certificate (obtained from the Aliens Department).
Evidence of your pension (as you completed on the DTI Individual Form).
Contract to purchase a property - or your rental agreement.
CYP 1 Revenue stamp (whatever that is in Euros now).

Cheers,


Nigel Howarth
Independent information & advice for Cyprus property buyers
Contact Nigel Howarth
Read the latest Cyprus property news

Nigel Howarth
Site Admin
Posts: 2467
Joined: 24 Oct 2007 14:38
Location: Erimi, Limassol, Cyprus
Contact:

Re: Income Tax

Post by Nigel Howarth » 28 Apr 2008 13:55

Hi bitterlemons,

Just a quick update.

PricewaterhouseCoopers have now published the 2008 edition of their Cyprus Tax Guide. You can download it by clicking here.

Cheers,


Nigel Howarth
Independent information & advice for Cyprus property buyers
Contact Nigel Howarth
Read the latest Cyprus property news

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