With less than six months to go until the day Britain officially leaves the EU, now is the time for UK nationals who wish to live in Cyprus, to ensure that they are registered as legal residents in our country.
All British nationals who live in Cyprus should apply for a MEU1 or MEU3 to make sure that they are lawfully resident and that their rights continue to be protected post-Brexit.
We have an estimated number of approximately 5,000 people who might need help to collate and complete all of the necessary paperwork, whilst some of them are facing challenges to do so, since they might be living in remote areas or have mobility issues.
According to the official information from the Cyprus Civil Registry and Migrant Department, British nationals have to register as a Cypriot resident if they are planning to stay in Cyprus for more than three months.
What is MEU1 and MEU3?
If a British national has not been living in Cyprus for five years, he, as an EU citizen, should be in possession of the Registration Certificate MEU1, commonly referred to as the 'yellow slip'. If he intends to live in Cyprus, he should apply for this registration certificate within four months of his date of entry into the country.
If he is a citizen of an EU Member State and has been living in Cyprus for five years, he should have applied for a "Permanent Residence Certificate" (MEU3).
He can apply for this after a five-year period of uninterrupted legal residence in the Republic of Cyprus. This is not affected by temporary absences, not exceeding six months in a year.
The UK citizen who has not completed five years of continuous residence in Cyprus will be able to remain in Cyprus to accumulate five years of continuous residence.
British nationals who want to come to Cyprus after 31 December 2020, i.e. after the end of the transition period, will have to meet the Cyprus immigration rules.
Take action now by starting the residency process – under current rules – as soon as possible.
The documents that British nationals need to provide for their application procedure are as follows:
- A valid Passport, which must be delivered to his lawyer so that the law firm will be able to book the relevant appointment with the authorities;
- The applicant must show proof of residence either at his private household or with a relative;
- The applicant must show proof of income which might be:
- A bank account in Cyprus or any other European Country which shows income;
- A bank account which clearly shows a balance, even without an income.
- Medical Insurance;
- Marriage Certificate (where applicable);
- Birth Certificate (where applicable).
Subject to having all the relevant documents prepared in time for the application, all British nationals can be assured of the approval of their yellow slip.
An application fee of €20 is payable to the authorities, and there is an additional fee for the law firm which will be discussed at the first meeting with his designated lawyer. The Cyprus Residency Permit is issued within the same day.
What are the benefits of being a resident in Cyprus?
Besides the lifestyle, the climate and the friendly people, there is also a very well-organized Health Care System (GESY), which operates in a similar way to the 'NHS' in the UK. The education system is of a high standard, since the public and private schools offer a multicultural environment for the children to learn and grow as global citizens. Cyprus is at the crossroads between Europe and the Middle East and it is an attractive place to live, invest and conduct business.
There are also tax benefits to being a resident, since Cypriot tax residents are liable to income tax on their worldwide income, and to their advantage the first €19,500 is tax free. Interest and dividends are liable to "special defence contribution" rather than income tax, but non-domiciled Cypriots are exempt from this. This means that foreigners generally do not have to pay this tax until they have lived here for 17 years. Rental income is liable to both income and defence tax.
A British national can choose whether his foreign pension income is taxed at the income tax rates or at a flat 5% rate (with the first €3,420 being tax-free).
All UK-sourced pension income is only taxable in Cyprus and not subject to UK tax, while there is no inheritance tax payable in Cyprus. There is no Capital Gains Tax on the sale of shares and when it comes to property, only real estate in Cyprus is taxable, but there are exceptions for the resident's benefit.
For example, if someone is a resident for a continuous period of 5 years, there is a tax exemption of the amount of €85,453 for each person. If the resident is in Cyprus for less than 5 years, then the tax exemption is of the amount of €17,086 for each person.
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Originally published by Michael Kyprianou, July 2020
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.