Property acquired in Cyprus after January, 1976 from remittances from abroad is exempt where the deceased had his domicile in Cyprus at the time of his death and was at any time before his death permanently residing outside Cyprus. Any property held by the deceased as trustee is not taxable.
Property includes movables and immovables of every kind, including money or investments. In the case of a deceased person who was not domiciled in Cyprus, the following will be excluded:
- shares in a company owning a Cyprus ship
- shares in a Cyprus offshore company
- bank deposits in Cyprus, whether with an onshore or offshore bank.
In arriving at the amount chargeable to estate duty certain expenses, including the following, are deductible:
- debts
- taxes
- donations to charitable institutions up to C£50.000
- donations to the Government or local authority for public purposes
- reasonable funeral expenses.
The following allowances are also deductible:
Exemption - Immovable property of the deceased up to the total value of £150,000 which immediately before his death was exclusively used for residence by him or his family.
- for a surviving spouse C£75.000
- for each surviving child under 21 years of age C£150.000
- for each surviving child of any age who is physically or mentally handicapped C£150.000
- for each surviving child of 21 years of age or over C£75.000
- for each surviving child under 21 years of age of each predeceased child C£150.000
- for each surviving child over 21 years of age of each predeceased child C£75.000
- donations to approved charities up to C£50.000
- gifts to the Government - Unlimited
The tax rates of estate duty are progressive as follows: C£ Tax rate % The first 20.000 nil The next 5.000 10 The next 10.000 13 The next 20.000 15 The next 25.000 17 The next 25.000 20 The next 45.000 23 Any balance 30
The estate duty may be reduced by "quick succession relief", and also by the deduction of foreign estate duty on property held abroad. Duty not paid carries interest at 9% p.a. after the expiration of one year from the date of death.
NB. The abolishing of the Estate Duty Law as from 1 April 1997 has been withdrawn.
This information was correct as of 12 February 1997.
The contents of this article are intended to provide a general guide to the subject matter. Specialist advice should be obtained before any action is taken.