Home Page | North Cyprus | Minimising Tax Liabilities

North Cyprus Beach

Minimising Tax Liabilities

From a tax perspective there are two ways to own a property in North Cyprus. The first is to own it as a foreign resident in the eyes of North Cypriot law. This means that your current country of residence, such as the UK for example, will be the country in which you declare your North Cyprus property assets for taxation purposes on income received from rental activities and any Capital Gains Tax due upon disposal. The second way is to own it as a resident of North Cyprus, so entailing that you apply for tax residency of North Cyprus.

How you plan your tax payments will be very much down to what you intend to do with your North Cyprus property. If you intend to retire to North Cyprus and once you have secured your residency status, you'll only have to pay 5% tax on pension income and there'll be no inheritance tax for your successors to have to pay on your property.If you are intending to gain an income from rental of your North Cyprus property then tax residency of North Cyprus will be advantageous for you too. The TRNC actively encourages investment in tourism, so depending upon your intentions you may be eligible for tax incentives, as well as being exempted from having to pay inheritance tax.

Capital Gains Tax (CGT) will be levied upon sale of your property regardless of whether you are a North Cypriot resident or UK resident. However, creative (and legal) tax planning before you make a purchase can significantly reduce the amount of CGT that you'll have to pay upon selling the property. For instance, if you buy property as a UK resident one way to avoid a hefty CGT bill is to ‘gift’ a percentage share of the property to your spouse. This will allow you to use a greater amount of personal capital gains tax allowance to offset capital gain. There are many other ways to reduce CGT, including the use of one of the most powerful tax reduction techniques available to UK residents - the business asset taper relief. We strongly advise that you seek counsel from a professional tax advisor to determine the best set of tax minimising solutions for you.

 

Property Search
Villa in Cyprus
Apartments
Special Offers
All for home
Rentals
Cyprus Map
Weather today
My status
Chat in Skype
+905338632008
 
Home | North Cyprus | Villas | Apartments | Land | Buyer's guide | News | Services | Site Map | Links | Contacts