Benjamin Franklin famously said “…in this world nothing can be said to be certain, except death and taxes.'”
It is however possible to plan for the unavoidable. Estate planning can reduce or eliminate taxes payable by an estate following death. Estate planning allows individuals to take action to reduce or eliminate taxes which maybe imposed on their estate. At the same time it also allows individuals to decide exactly who will benefit from their estate and to what extent.
When property is given away during life or bequeathed at death, taxes it is common many jurisdictions for taxes to be imposed. Such taxes are known as gift and inheritance taxes.
Gift taxes exist in many jurisdictions in order to prevent persons from bypassing inheritance tax. Simply, if it is possible to make unlimited gifts during lifetime, inheritance tax would be reduced or extinguished.
There is no gift tax in Cyprus. This is largely related to the absence inheritance tax provisions.
There is no inheritance tax applicable for persons who were “domiciled” in Cyprus and have passed after 2000.
The word “domicile” refers to an individual who not only lives in Cyprus but can establish to the tax authorities in their country of origin that they have the intention that to reside in Cyprus for the rest of their life. It should be noted that the issue of domicile is not only of vital importance but also highly complicated, consequently appropriate tax advice should be sought.
Drafting a Will
If a foreign national who is domiciled in Cyprus dies without leaving a Will, their estate will be distributed according to Cyprus law.
An EU national is entitled to declare in their Will whether they wish Cyprus law or the law of their country of nationality to be applicable law to their estate (Regulation (EU) 650/2012).
We are highly experienced in helping clients who have inherited property in Cyprus. If you own property or have assets in Cyprus, we can also help you with making a Cyprus Will.
If you have inherited property in Cyprus, we can provide clear, reliable guidance in plain English, giving you the confidence to deal effectively with your property in Cyprus
We can also advice on the establishment and administration of Trusts.