Navigating the Shift: Why Cyprus Is the Perfect Alternative for UK Non-Doms

As of April 2025, the UK is bringing significant changes to its tax landscape, particularly for high-net-worth individuals (HNWIs) who previously enjoyed non-domicile (non-dom) tax benefits. With the abolition of the non-dom regime, UK residents will now face tax obligations on their worldwide income, leading many to seek tax-friendly alternatives. For those considering relocation, Cyprus stands out as a highly attractive destination, combining tax efficiency with lifestyle benefits.

The Changing UK Tax Landscape

The UK’s upcoming tax reforms mark a substantial shift, targeting HNWIs with increased tax liabilities. Key changes include the end of the non-dom status, which previously allowed foreign income and gains to remain untaxed in the UK, along with increased rates for capital gains and inheritance tax. Additionally, new provisions will bring foreign income and assets into the scope of UK inheritance tax, putting more pressure on UK residents with global wealth to consider tax-efficient jurisdictions.

Why Cyprus Appeals to UK Non-Doms

Cyprus offers a stable, advantageous tax environment for non-domiciled individuals. Under Cyprus’ Non-Dom Tax Regime, HNWIs benefit from multiple tax exemptions and a flexible residency system designed to meet international standards. 

Key Benefits Include:

• No Tax on Foreign Income: Cyprus non-doms are exempt from taxes on worldwide dividends, interest, and capital gains. This can result in significant savings for individuals with diverse income sources, allowing them to retain more of their global wealth.
  
  
• Low Corporate Tax Rate: At 12.5%, Cyprus has one of the most competitive corporate tax rates in the EU, attracting both investors and entrepreneurs seeking to optimize profits through efficient tax planning.
  
  
• IP Box Regime: For those with intellectual property assets, Cyprus provides a reduced tax rate as low as 2.5% on income derived from qualifying IP assets. This regime is particularly appealing to tech-driven and innovation-based businesses looking to protect and maximize their IP revenue.
  
  
• No Inheritance, Gift, or Wealth Taxes: Cyprus imposes no inheritance, gift, or wealth taxes, allowing wealth to be transferred seamlessly across generations and reducing tax burdens on personal and family assets. This makes Cyprus an ideal jurisdiction for long-term wealth preservation, succession planning, and efficient wealth management.
  
  
• Flexible Residency Rules: HNWIs can establish residency in Cyprus through the standard 183-day rule or the 60-day rule, which requires at least 60 days of presence in Cyprus per year, a residence, and Cyprus-based business or employment connections. This flexibility caters to various lifestyles and business needs, offering a practical alternative for global citizens.
  
  
• Trust Law Advantages: With the changes to UK trust laws, Cyprus presents an appealing alternative for HNWIs looking to protect assets and manage wealth. The Cyprus International Trust offers tax efficiency, asset protection, and confidentiality, along with exemption from inheritance tax, making it a powerful tool for those seeking a stable and flexible trust framework.

The 60-Day Residency Rule

Cyprus offers a unique path to tax residency through its flexible 60-day rule, which provides an alternative to the more common 183-day requirement. Under this rule, individuals can qualify as tax residents of Cyprus by spending just 60 days in the country each year, provided they maintain a residence and establish meaningful economic ties—such as employment, directorship, or business activity in Cyprus. 

This approach is especially appealing for global citizens who need a tax-efficient base without extensive relocation commitments. For HNWIs with international business interests, the 60-day rule opens the door to Cyprus tax benefits while supporting a globally mobile lifestyle.

Conclusion 

With the UK’s non-dom regime set to end, Cyprus positions itself as a prime choice for individuals seeking a tax-efficient, well-regulated, and flexible jurisdiction within the EU. Cyprus’s non-dom regime, low corporate tax rate, and absence of inheritance, gift, and wealth taxes make it a standout option for those looking to safeguard and grow their wealth. The benefits of Cyprus trust law add further advantages for asset protection and succession planning.

For HNWIs reassessing their tax residency, Cyprus provides a strategic solution that combines favourable tax policies with a high quality of life. By working with experienced advisors, individuals can navigate this transition smoothly, ensuring full compliance and optimization of their financial and tax strategy.

Additional Resources

Everything You Need to Know About Relocation to Cyprus 

Contact Us

This publication should be used as a source of general information only. It is not intended to give a definitive statement of the law. For a FREE Initial Consultation to discuss the specifics of your enquiry please contact Andreas Athinodorou on + 357 22 057 560 or andreas.athinodorou@atgcorporate.com.