From 6 April 2025, the United Kingdom moved to abolish the long-standing non-domicile regime, replacing it with a far more limited four-year foreign income and gains (FIG) exemption. For UK-connected families — whether staying in the UK, relocating, or planning succession across borders — the landscape is shifting quickly.
While uncertainty prevails, Cyprus stands out as one of the most effective jurisdictions to secure tax efficiency, mobility, and succession certainty in a globalised world. With its non-domicile tax regime, favourable residency rules, no inheritance tax, and corporate opportunities, Cyprus offers a complete toolbox for families seeking stability.
This article explores three key areas UK families must consider — mobility, taxation, and succession — and how Cyprus provides practical solutions in each.
- Global Mobility: Options With and Without Relocation
Residence without uprooting
Increasingly, families want to establish second residency or citizenship options without physically leaving the UK. This provides an insurance policy against political or tax uncertainty, while keeping daily life unchanged.
Cyprus is ideal for this:
- Tax residency under the 60-day or 183-day rules (subject to conditions). The 60-day route is particularly valuable for internationally mobile professionals.
- English-speaking legal system and familiar business environment, making it simple for UK nationals to integrate.
- Banking and investment diversification within the EU, supported by a strong UK–Cyprus Double Tax Treaty.
Full relocation when lifestyle and tax align
For those prepared to leave the UK, Cyprus offers:
- Mediterranean lifestyle with excellent international schools and healthcare.
- Lower cost of living than other EU hubs such as Monaco or Malta.
- Easy access to the UK (just a 4–5 hour flight).
For families balancing lifestyle with genuine tax savings, Cyprus is a natural EU base.
- Tax: Navigating UK Changes and Cyprus Opportunities
The UK from April 2025
- Non-dom abolished; new arrivals receive only a four-year FIG exemption before being taxed on worldwide income and gains.
- Greater transparency — full disclosure of foreign income and enhanced reporting on crypto and offshore structures.
- Inheritance tax (IHT) remains in force, with worldwide estates taxable after 10 years of UK residency.
This creates winners (those who remain non-UK resident for 10 years) and clear losers (long-term UK residents who previously relied on the remittance basis).
Why Cyprus non-dom works
For individuals relocating from or connected to the UK:
- No Special Defence Contribution (SDC) tax on worldwide dividends and interest for up to 17 years (out of 20) of Cyprus tax residence if non-domiciled in Cyprus.
- No wealth tax, no inheritance or estate tax — a major advantage for succession planning.
- Flat 5% tax rate on foreign pension income (subject to thresholds).
- Capital gains tax limited to Cyprus-situated real estate, meaning worldwide disposals are tax-free (subject to anti-avoidance rules).
Corporate and investment opportunities
- 12.5% corporate tax rate, fully EU-compliant.
- Intellectual Property Box regime: effective 2.5% rate on qualifying IP profits.
- Participation exemption on dividends from qualifying subsidiaries.
Together, these make Cyprus an attractive jurisdiction for holding, trading, and IP companies with real EU substance.
- Succession: Cross-Border Simplicity and Control
Wealth preservation across generations requires careful structuring. Cyprus provides:
- EU Succession Regulation (650/2012): UK nationals resident in Cyprus can elect for English law to govern their estate, avoiding forced heirship rules in other EU states.
- Trusts under Cyprus law (based on English common law traditions) to ringfence assets and support long-term planning.
- No succession tax in Cyprus — ensuring wealth passes without estate erosion.
Practical solutions include:
- Using two coordinated wills: one covering Cyprus and EU assets, and one for non-EU property (e.g. US real estate).
- Aligning powers of attorney and guardianship provisions across relevant jurisdictions.
- Including digital assets and crypto in estate planning, with executor access protocols.
Practical Scenarios
Scenario A: Leaving the UK
A UK family decides to relocate. By securing Cyprus residence under the 60-day rule, they access the non-dom regime, eliminating dividend and interest taxes and removing inheritance tax exposure. Proper planning ensures UK Statutory Residence Test (SRT) compliance. The major requirement under the 60-day non-dom route is that the family must not reside in any other country (such as the UK) for more than six months in a calendar year.
Scenario B: Retaining UK Ties, Becoming Cyprus Resident
An entrepreneur continues business with UK links but establishes residence in Cyprus. With a Cyprus company for consulting income and the non-dom regime for personal investment income, worldwide taxation is minimised.
Scenario C: Succession Planning
A family with property in Cyprus, the UK, and the US coordinates wills under the EU Succession Regulation, electing English law for their estate. Assets pass smoothly, without conflicting legal claims or Cyprus succession tax.
Conclusion: Why Cyprus Should Be in Every UK Family’s Plan
For UK-connected families navigating uncertainty:
- Mobility: Cyprus offers optionality, with or without relocation.
- Tax: The non-dom regime delivers significant savings compared to the UK’s new regime.
- Succession: EU rules, common-law trusts, and no succession tax provide clarity and control.
To explore how Cyprus can work for your family, contact Savva & Associates for a confidential consultation. Our team will review your situation and design a tailored strategy to optimise tax efficiency, ensure compliance, and protect wealth across generations.
Please get in touch with our team at:
| Charles Savva Managing Director BA, MBA, TEP, CA [email protected] +357 22516671 | Mina Pieri Senior Manager FCCA, MBA [email protected] +357 22510207 | Makis Pavlou Account Manager FCCA [email protected] +357 22510257 |