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Brexit – The Cyprus case

 

Brexit Cyprus case – withdrawal of the United Kingdom from the European Union

The publication sets out how Cyprus intends to practically implement the provisions of the Withdrawal Agreement concerning residence rights of United Kingdom (UK) nationals and their family members, including family members who are third country nationals, in view of the UK leaving the European Union (EU).

  1. UK nationals and their family members who, by 31 December 2020, have been continuously resident in Cyprus for five years will be eligible for permanent residence.
  2. UK nationals and their family members who already reside in Cyprus or arrive by 31 December 2020, but will not yet have been continuously resident in Cyprus for five years, will be eligible for residence, enabling them to stay until they have reached the five-year threshold, allowing them to apply for permanent residence.
  3. UK nationals and their family members who are covered by the Withdrawal Agreement, will be able to continue their lives in Cyprus, with the same access to work, study, benefits and public services that they enjoy now, subject to the specific provisions provided for in Withdrawal Agreement.

 

Withdrawal Agreement

The EU has reached an agreement with the UK on citizens’ rights, ahead of the UK leaving the EU on 29 March 2019. This Agreement will become legally binding once it is set into force.

 

Who it covers

The Withdrawal Agreement will protect those UK nationals and their family members who have already exercised or will exercise their free movement rights in Cyprus before 1 January 2021 (before the end of the transition period).

 

Transition period

It is the period immediately after the UK leaves the EU, which starts on 30 March 2019 and lasts until 31 December 2020. During this period free movement of UK nationals and their family members will continue.

 

How it works for UK nationals

  1. UK nationals and their family member who have already exercised or will exercise free movement in Cyprus before 1 January 2021 but, until 31 December 2020 will not have completed continuous residence of five years, will be eligible for residence in Cyprus.
  2. UK nationals who will have completed five years of continuous residence in Cyprus before 31 December 2020 will be eligible to acquire permanent residence in Cyprus.
  3. UK nationals who will not have completed five years of continuous residence in Cyprus, will be able to remain in Cyprus to build-up five years continuous residence. Commencement of this five-year period for both cases starts at the moment of exercising free movement rights, which may be at any time before and during the transition period.
  4. UK citizens who want to come to Cyprus after the 31 December 2020 (end of the transition period), will need to meet Cyprus immigration rules.

 

Evidence required for the 5 years

UK citizens must provide evidence that they have been legally residing in Cyprus for at least five years. If they cannot provide this through a rental agreement, they can use any other document which demonstrates a continuous period of residency of five year in Cyprus.

 

Resident documents

UK holders of current resident documents (MEU1, MEU2, MEU3) will be able to continue to use them as means of proof for residence rights in Cyprus. Applications received up until the end of the transition period will be examined on the basis of the current free movement rules, and, if approved, will result to the issuance of the current residence documents. After the end of the transition period, UK holders of residence documents and eligible persons arriving in Cyprus will have the right, upon application, to receive a new type of residence document, which will include a statement that it has been issued in accordance with the Withdrawal Agreement.

 

Key dates

UK leaving the EU:
29 March 2019

Transition period:
30 March 2019 – 31 December 2020

 

Cyprus personal taxation benefits for UK nationals living in Cyprus

  1. The first 19,500 euros of worldwide earnings is tax-free, follow the link to view full Cyprus resident individual’s taxation tables
  2. Pension income for UK nationals who will be tax resident of Cyprus is taxed at a flat rate of 5%. UK pension income is not taxed in Britain.
  3. Cyprus has no inheritance tax for unspent pension funds.
  4. Income exemption from Cyprus personal taxation (Special Contribution for Defense) on rents (3% on 75% on rent income), interest (30%) and dividends (17%) which are applicable to Cyprus domiciled individuals.
  5. Taxation benefits for highly paid individuals. Please follow the link for more information
  6. Other individual’s taxation benefits. Please follow the link for more information

For further  information about “Brexit – Cyprus case” please download the full publication issued by REPUBLIC OF CYPRUS

 

How we can help

  1. Assist UK nationals with Cyprus residence permits (Cyprus yellow slip)
  2. Undertake all relevant arrangements to move to Cyprus
  3. Make all relevant tax declarations in Cyprus and be taxed in Cyprus
  4. Obtain the non – dom status exemption on rentals, interest and dividends in Cyprus
  5. Our lawyers are also happy to assist you in estate family planning and Wills and Trust administration  both in Cyprus and abroad

 

Contact details

Tel +357 22 462727

Email: [email protected]

(Publication date: October 2018)

 

The authors expressly disclaim all and any liability and responsibility to any person, entity or corporation who acts or fails to act as a consequence of any reliance upon the whole or any part of the contents of this website.

Accordingly no person, entity or corporation should act or rely upon any matter or information as contained or implied within this publication without first obtaining advice from an appropriately qualified professional person or firm of advisors, and ensuring that such advice specifically relates to their particular circumstances.

PKF / ATCO Limited is a member firm of the PKF International Limited network of legally independent firms and does not accept any responsibility or liability for the actions or inactions on the part of any other individual member firm or firms. This publication is for information purposes only and should not be considered as professional advice.

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