Article by: Sam Orgill info@proactpartnership.com Published: 13/11/2008

Tax on Income and Inheritance

Sam Orgill of ProACT Partnership features important Tax events.

Sam Orgill of ProACT Partnership highlights issues for expats abroad.

It is easy to take for granted that inheritance, property, probates and tax laws are ok but for people living, working, retired or investing in property abroad expensive and distressing problems can arise by not planning for the worst.

Taxation

Income and capital gains in Cyprus are as low as 5% on income. UK expats can pay flat rate taxes. UK capital gains on business and property sales, but you must be a non resident before any disposal decisions. If you’re not registered for tax aboard the UK could assess you on worldwide income and capital gains taxes. Plan ahead to ensure you maximise tax savings on income and capital gains.

Inheritance tax

Between spouses there is no inheritance tax generally but on second death worldwide assets are taxed at 40%. This taxation is avoidable by planning ahead. This does not have to be complicated and expensive schemes because Cyprus is a tax efficient location. Gifts on death or a lifetime Cyprus trust can avoid any Cyprus and UK taxes.

Trusts

Trusts can be set up when making a will or stand alone. ProACT ensure the family stay in control and your wealth is passed to the people you want with the minimum tax and running expenses.

The two problems with trusts are firstly that in countries like the UK there are restrictive tax penalties. This is not the case in Cyprus.

Secondly does the person creating the trust have enough trust in himself and his family to execute the deed? The major benefits of trusts Is that they can stop family fall outs when people die. Ensure who gets what, and avoid the expense and cost of probate.

Probate costs

Tax, time and expense are the scourge of probate. In Cyprus legally fixed prices means solicitors can charge 5-10% or more of an estate for probate work. You control this by putting the family members in legal ownership and use trusts to avoid probate. Plan for the worst, and the inevitable and you can ensure your wealth is protected and passed to your family.

Title deeds

Title deed ownership is a major problem in Cyprus. Weak laws and poor enforcement tied up with bureaucracy means people can wait for years to get title deeds.

Let’s be clear – if the title deeds are not in your name you don’t own them. Many people own a right to receive title deeds under a contract of sale. The bank, developer and land owner are all interested in your property when you want to sell or when you die. This can cost time, money and worry to resolve in your lifetime or on death. Plan ahead by reviewing your contract of sale with an independent UK solicitor - before you sign.

ProACT Expatriate Advice

ProACT Partnership offer professional expatriate advice to expat family and business living, working retired or investing in property abroad covering tax returns and rebates, making a will, trusts and estates, investment and pensions. ProACT offer free reviews and seminars in Cyprus & the UK on the topics contained in this article or for more information;

Sam Orgill

Tel: +357 26819424

Contact us at info@proactpartnership.com

Or see www.proactpartnership.com

External Article Link: http://www.property-partnership.com/overseas-property-guides/overseas-property-guide.cfm?id=175

Article Link: http://www.property-partnership.com/overseas-property-guides/overseas-property-guide.cfm?id=175

Please contact the author at info@proactpartnership.com for more information.