Look before you leap into the expat life

This is the time of year when people get itchy feet and tourists think about becoming expats.

Britons, in particular, ponder turning a holiday on Cyprus into a way of life. They are here on vacation and they are enjoying the weather, the food, the relaxed pace.

Understandably, they think how nice it would be to make the holiday permanent. Think again, is my advice. And think hard.

Cyprus is indeed a wonderful destination for expats and a move here could be a step that will change your life for the better.

But it is a big step. Do your research before you burn your bridges. Consider first your reasons for moving. Do you intend to do business here or are you planning to retire?

If you see Cyprus as a business base, check out the practical implications - broadband, government supports, export and import rules, bureaucratic restrictions.

Start with social media - it is not the most reliable guide, but it will give you a flavour of the expat life.

Then check the relevant government sites both here and in your home country and - most importantly - make contact with some expats who can give you an unbiased rundown on life in this lovely but often perplexing country.

If you plan to retire here, check how your pension will transfer and, whether you are coming to work or to retire, explore the implications of Brexit. Ask plenty of questions.

Get all the facts and get them straight - and that includes facts about taxation. As a financial adviser, I am surprised at the number of Britons who come looking for advice on taxation AFTER they have made the move.

Whether the move is permanent or temporary, there are tax implications and HM Revenue and Customs (HMRC) must be kept in the loop.

You don’t need to tell the taxman if you’re abroad for holidays or even a short business trip, but trips longer than a full tax year need to be declared.

Britons should fill in HMRC’s form P85 either online or by post. HMRC will use the form to calculate if you owe or are owed a refund for the portion of the tax year you were in the UK.

Self-assessment tax returns cannot be completed online once you leave the UK.

Instead you must send it by post, use special software, or go through an accountant. Remember, the deadline is shorter for paper returns – you must file by October 31, compared to January 31 for online returns.

If you have non-resident status (if you spend fewer than 16 days in the UK, for example) you do not pay tax on income generated abroad.

However, you may need to pay tax on UK earnings even if you are non-resident, typically on income earned from British property, private pensions or saving accounts.

Last year, the UK and Cyprus signed a double taxation agreement, aimed at ensuring you do not pay tax twice on the same earnings.

It gives the holders of many private pensions the option of paying tax either in Cyprus or the UK. The right choice will vary from pensioner to pensioner, depending on your circumstances.

How do you know which is the best option? In this, as in all matters concerning pension payments to expats, it is wise to take professional advice.

My company, the Woodbrook Group is an international firm of financial advisers. We are not owned by any financial institution or life insurance company and can offer you unbiased and impartial advice. We offer a free pension review to help clients plan for the future. We can help you understand your options and how to address your income needs. Michael Doherty is CEO of the Woodbrook Group www.woodbrookgroup.com contact@woodbrookgroup.com