As of 2025, some British retirees living in Cyprus and getting a UK state pension are set to see the amount they receive fall as it will no longer be taxed on the island, but in the UK.
The tax rates on pensions imposed in Cyprus are more generous than those in the UK, and could impact people’s choice of where to live. Those set to change are pensions paid to UK government workers.
READ MORE
Expat Brits fear pensions loss
-
memory man
- Posts: 5406
- Joined: Wed Dec 28, 2016 7:30 am
- Location: on top of ATLANTIS
- Contact:
Re: Expat Brits fear pensions loss
This change isn't necessarily a bad thing, so have a serious think about your own circumstances.
A friend of mine receives a UK police pension from her deceased husband, together with a UK state pension. Prior to the change she is taxed on both in Cyprus, and actually paid tax. The change means the police pension is taxed in the UK and the state pension remains taxed in Cyprus. Both are below the tax free threshold in their respective countries. The result being that she no longer pays tax in either country and is a happy bunny.
A friend of mine receives a UK police pension from her deceased husband, together with a UK state pension. Prior to the change she is taxed on both in Cyprus, and actually paid tax. The change means the police pension is taxed in the UK and the state pension remains taxed in Cyprus. Both are below the tax free threshold in their respective countries. The result being that she no longer pays tax in either country and is a happy bunny.
Re: Expat Brits fear pensions loss
It has been a good day for me because a few pence will be knocked off by 25% UK pension, but a popular vote on Sunday has increased my 75% Swiss pension from 12 to 13 months per year! 
Re: Expat Brits fear pensions loss
On the subject of UK Service pensions being taxed at source in UK ( not OAP which may continue to be taxed in Cyprus) does anyone know how to fill in the Cyprus tax return where world wide income should be shown?
Re: Expat Brits fear pensions loss
To show any UK Government pensions, including UK military pensions, that are exempt from Cyprus tax (Double Taxation agreement) I suggest the following:
Under B1 Pensions, enter the type of Pension (I put in 'UK Government Pension') and enter '3' under the code column and the annual amount.
The total below will show all the pension amounts. BUT at the end of the form under Self Assessment Deductions it will show the UK Government pension amount as separate from any income/other pensions liable for Cyprus tax. You will only be taxed on other income if over the tax threshold.
I have done it this way for a couple of years and the returns have been accepted as Assessment Applied.
Chris
Under B1 Pensions, enter the type of Pension (I put in 'UK Government Pension') and enter '3' under the code column and the annual amount.
The total below will show all the pension amounts. BUT at the end of the form under Self Assessment Deductions it will show the UK Government pension amount as separate from any income/other pensions liable for Cyprus tax. You will only be taxed on other income if over the tax threshold.
I have done it this way for a couple of years and the returns have been accepted as Assessment Applied.
Chris
