The abolition of the non-domiciled (non-dom) tax regime in the United Kingdom, that took effect from 6 April 2025 under the Finance Act 2025, represents a pivotal shift in international tax planning for high-net-worth individuals (HNWIs).

For decades, the UK’s non-dom status offered a unique advantage, allowing individuals with foreign domicile to significantly reduce their UK tax exposure by limiting it to UK-sourced income and capital gains, or by taxing foreign income only upon remittance. However, with the new legislation, all worldwide income and gains will become fully subject to UK taxation, irrespective of remittance, inevitably lessening the UK’s appeal as a tax-efficient jurisdiction for globally mobile individuals and families.

In light of these transformative changes, many affected individuals are proactively seeking alternative jurisdictions for residency and strategic tax planning. Amidst this reassessment, Cyprus has rapidly distinguished itself as an exceptionally attractive option. As a respected European Union member state, boasting a robust legal framework, strategically favorable tax policies, and a high standard of living, Cyprus offers an optimal convergence of lifestyle, regulatory certainty, and fiscal efficiency.

A cornerstone of Cyprus’s appeal is its own compelling non-domicile (non-dom) regime, which extends significant tax advantages to new residents. Crucially, non-domiciled individuals benefit from exemption from the Special Defence Contribution (SDC) on both dividends and interest, regardless of whether the income is derived locally or internationally. Furthermore, foreign income – encompassing dividends, interest, and rental income – remains entirely untaxed in Cyprus, even upon remittance. This offers unparalleled planning flexibility and substantial tax relief.

Beyond these core benefits, Cyprus provides additional fiscal incentives, including an exemption from capital gains tax on the disposal of assets located outside Cyprus, and the complete absence of inheritance or gift tax. These features collectively position Cyprus as an attractive jurisdiction for robust long-term wealth preservation and seamless succession planning.

On the corporate front, Cyprus maintains a highly competitive tax environment, featuring a flat 12.5% corporate income tax rate – among the lowest in the European Union. This, coupled with a legal system grounded in English common law and a sophisticated ecosystem of legal, financial, and professional services, solidifies Cyprus’s standing as a modern, stable, and profoundly business-friendly destination.

At euroaudit, we possess extensive experience in guiding clients through the intricacies of international tax matters, particularly in securing and optimizing non-dom status in Cyprus. Our dedicated team is exceptionally well-equipped to assist individuals and families at every stage of the relocation and tax planning journey. Whether you are re-evaluating your options in direct response to the UK’s evolving tax reforms or are proactively exploring a more advantageous fiscal environment, we would be delighted to assist you in securing non-domicile status and fully harnessing the opportunities that Cyprus offers.

In today’s dynamic international tax landscape, Cyprus unequivocally presents a stable, strategic, and highly advantageous choice for those seeking a new and prosperous base.

George P. Christou FCCA, CPA(CY)

Managing Director