Tax tips for retirees planning to emigrate to a European country

Tax tips for retirees planning to emigrate to a European country

Tax tips for retirees planning to emigrate to a European country

Amongst the many reasons retirees head form the UK to a friendly, somewhat familiar European country, tax regimes don’t play a major part, but can severely affect an otherwise enjoyable retirement

Quality of life, cheaper property and cost of living as well as better weather and a ready-made expat community are all reasons to retire away from the grim, grey shores of the UK. However, choosing the right haven for your financial circumstances is equally, if not more, important.

Although the EU is, at least nominally these days, a single market, its individual states all have different laws and tax systems, some of which might be detrimental to expat financial health. If substantial assets are spread across several countries, there’s even more reason to be careful in your choice of retirement haven.

Earlier this year Cyprus hit the headlines for all the wrong reasons, and the savings grab by its troubled banks is still reverberating around the expat community. However, income tax is still relatively low and capital gains tax is charged only on property sales, but tax is taken from dividends and bank savings account interest.

The Channel Islands are a good bet, as the flat rate of income tax is 20 per cent, and Gibraltar boasts capped income tax and no capital gains or inheritance taxes. Further afield, Malta only taxes overseas income if it’s remitted onshore, overseas capital gains are tax free and, if made via the disposing of a Maltese property, are fixed at a very low rate.

Portugal’s relaxed attitude to expat arrivals is shown in an attractive visa regime for those from outside the EU, offering benefits for retiring pensioners as well as skilled workers. Denmark, although expensive and hardly the best-known expat destination, offers the first five years of residency at a special flat rate, and incomers also receive tax breaks on capital gains and inheritance taxes.

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