Is there inheritance tax in Cyprus?
No, Cyprus has no inheritance tax, succession duties, or other death taxes. The government abolished inheritance tax in 2000 as part of broader tax reforms aimed at creating a more investment-friendly climate.
In concrete terms, this means: if you die as a tax resident of Cyprus, your heirs pay zero percent tax on what they inherit. No tax return, no exemptions to monitor, no tax rate structure. The assets are transferred in full.
This is one of the most underestimated benefits of Cyprus as a country of residence, certainly compared to countries like the Netherlands (up to 40%), Belgium (up to 55% for non-family members), or the UK (40% above £325,000).
What exactly does the law say about inheritance tax?
Inheritance tax in Cyprus was abolished on January 1, 2000.Since then, there has been no tax whatsoever on the inheritance of assets, regardless of the size of the estate or the relationship between the deceased and the heir.
That applies to:
- Real estate in Cyprus
- Shares in Cypriot companies
- Bank balances and investment portfolios
- Business interests and IP rights
- Foreign assets, provided the deceased was a tax resident of Cyprus
There is also no equivalent of an estate duty, stamp duty on inheritances, or a gift tax equivalent upon death.
So what do you actually pay on an inheritance?
No inheritance tax does not mean that an estate passes completely free of charge. There are two things to keep in mind:
1. Real estate transfer costs
When real estate is transferred to heirs via the Land Registry, registration and transfer fees are payable. These are significantly lower than inheritance tax in most other European countries, but they do exist. The exact amounts depend on the assessed value of the property.
2. Forced heirship
Although there is no inheritance tax in Cyprus, the law applies 'compulsory succession'. This means that your spouse and children inherit a predetermined share of your estate, regardless of what is stated in your will.
This is a point that surprises many expats. You cannot dispose of your estate completely freely if you have immediate family members (spouse, children). The statutory reserved shares (legitimate portion) are established in Cypriot inheritance law.
Solutions do exist. An International Trust under Cypriot law or a well-constructed holding structure can organize the transfer of assets outside the rules on compulsory succession, provided it is set up in a timely manner. This requires a tailored approach, not a standard.
Comparison: inheritance tax in Europe
| Land | Inheritance tax rate | Children's exemption | Note |
|---|---|---|---|
| Cyprus | 0% | not applicable. | Abolished in 2000 |
| The Netherlands | 10–20% | €25.187 | Progressive rate |
| Belgium | 3–30% (Flanders) | €50.000 | varies by region |
| Germany | 7–30% | €400.000 | Every 10 years |
| UK | 40% | £325,000 nil-rate band | Global application |
| Spain | 7,65–34% | Vary by region | Complex regional system |
| Portugal | 10% stamp duty | Immediate family exempt | No inheritance tax sensu stricto |
For an entrepreneur, choosing Cyprus as a country of residence potentially saves tens of thousands to hundreds of thousands of euros in taxes that heirs would otherwise pay.
Particularly relevant: the UK IHT changes from April 2025
Inheritance tax in the UK is 40% on estates above the nil-rate band of £325,000. As of April 2025, the UK has switched to a resident system: individuals who qualify as long-term residents of the UK are now subject to UK IHT on their worldwide wealth, not just on UK assets.
British expats remain subject to UK inheritance tax on their worldwide estate for up to 10 years after leaving the UK. Assets in the UK are always liable, regardless of how long you have been living abroad.
This is crucial if you are moving from the UK to Cyprus: the move alone is not sufficient. You must actively work on severing the UK domicile ties, and that requires more than just physical presence in Cyprus. UK assets will continue to fall under the UK IHT basis regardless of your domicile.
For Dutch, Belgian, and German nationals, the situation is generally simpler: after establishing residence as a tax resident in Cyprus and following the transitional periods applied by most tax treaties, the inheritance falls primarily under Cypriot law, provided a proper arrangement is in place.
Cyprus as an estate planning jurisdiction: the structuring options
The absence of inheritance tax makes Cyprus attractive, but the real gain lies in the combination of instruments:
Cyprus International Trust
An International Trust under Cypriot law is one of the most flexible estate planning instruments in the EU. Assets held in such a trust:
- Falls outside the estate of the settlor
- Is protected against claims from creditors (after two years)
- Can circumvent the forced succession rules
- Generates no Cypriot inheritance tax upon the death of the settlor
Condition: the beneficiaries may not be Cypriot residents at the time of incorporation, and the settlor may not be a Cypriot resident at the time of incorporation (the trust itself is subject to Cyprus law).
Cyprus Ltd as holding structure
Holding assets via a Cypriot Ltd (shares, IP, participations) has estate planning benefits: the shares are easily transferable, there is no transfer tax on share transfers, and the holding company itself pays 15% corporate income tax on profits while the shareholder, as a Non-Domain, pays 0% on dividends.
Upon death, the heirs inherit the shares, not the underlying assets directly. This can simplify the distribution and save costs, especially for real estate that would otherwise have to be transferred via the Land Registry.
Non-Domain + no inheritance tax: the combination
For most entrepreneurs and HNWIs coming to Cyprus via Cyprus-Consult, the broader picture is as follows:
- During your lifetime: Non-Dom status = 0% on dividends and passive income (only 2.65% GeSY, capped at €4,770/year), 0% capital gains tax on securities, 15% corporate tax via Cyprus Ltd.
- Upon death: 0% inheritance tax on the entire estate
The combination is virtually unique in Europe. The Netherlands, Belgium, and Germany tax your assets both during your lifetime (income tax, dividend tax, capital yield tax) and upon death. Cyprus does not.
Are you planning to move to Cyprus, set up a Cyprus Ltd , or restructure your estate? The inheritance tax position is typically one part of a broader picture that also includes residency, Non-Dom status , corporate structure, and estate planning.
Schedule a free introductory meeting with Cyprus-Consult for a complete picture of your situation.
Frequently Asked Questions about Inheritance Tax in Cyprus
Is there inheritance tax in Cyprus? No. Cyprus has no inheritance tax, succession duties, or estate tax. These were completely abolished in 2000.
Do I have to pay inheritance tax as an expat in Cyprus if I am an heir? Not to Cyprus. But please note: if the deceased had assets in another country (e.g. a house in the Netherlands or the UK), that country may levy tax on those specific assets, regardless of your place of residence.
Does the absence of inheritance tax also apply to foreign assets? Yes, provided the deceased was a tax resident of Cyprus. Cypriot law does not levy tax on foreign assets upon the death of a Cyprus resident.
Are there gift taxes in Cyprus? No. Cyprus does not have a gift tax. Assets can be freely transferred during lifetime or upon death without tax consequences at the Cypriot level.
What is compulsory succession and how do I circumvent it? Cypriot law reserves a portion of the estate for the spouse and children, regardless of what is stated in the will. This can be arranged through an International Trust or a holding structure. This requires tailored legal advice.
I am coming from the UK. Am I still subject to UK IHT after moving to Cyprus? You may remain subject to UK IHT on your worldwide assets for up to 10 years after leaving the UK. UK assets always remain within the UK tax base. Timely planning and potential disposal of UK assets is crucial.
