UK vs Cyprus taxes (2026): non-dom dividends, 60-day residence and IHT

United Kingdom vs Cyprus tax rates at a glance

Tax	🇬🇧 United Kingdom	🇨🇾 Cyprus
Income tax	Personal income tax: 20% to 45% Personal allowance: GBP 12,570 Scottish top rate: 48% Employee National Insurance: 8% Employer National Insurance: 15%	Personal income tax: 0% - 35% Top marginal rate: 35% Tax-free threshold: €22,000 Employee social insurance: 8.8% Employer social insurance: 8.8% GESY employee rate: 2.65%
Corporate tax	Corporation tax: 25% Small profits rate: 19% Marginal relief band: GBP 50,000 to GBP 250,000 VAT: 20%	Standard CIT: 15% Domestic minimum top-up tax: 15% Share disposal gains: 0% Dividend WHT: 0% / 5% / 17%
Capital gains tax	Annual exempt amount: GBP 3,000 Basic rate CGT: 18% Higher and additional rate CGT: 24% Business Asset Disposal Relief: 18%	Property gains tax: 20% Securities gains: 0% Crypto gains: 8% Listed shares: 0%
Dividend tax	Dividend allowance: GBP 500 Basic rate dividend tax: 10.75% Higher rate dividend tax: 35.75% Additional rate dividend tax: 39.35% Withholding tax on ordinary dividends: 0%	General dividend WHT: 0% SDC on resident dividends: 5% Dividend WHT to low-tax jurisdictions: 5% / 17% Non-dom dividends: 0%
Wealth tax	Net wealth tax: 0% Inheritance tax: 40% Capital gains tax: 24% ATED scope: GBP 500,000+	Net wealth tax: 0% Net worth tax: 0% Annual asset tax: 0% Immovable property tax: 0%
Inheritance / estate tax	Standard inheritance tax: 40% Nil-rate band: GBP 325,000 Residence nil-rate band: GBP 175,000 Lifetime gifts: Potentially 0% to 40%	Inheritance tax: 0% Estate duty: 0% Gift tax: 0% Probate tax: 0%
VAT / GST / sales tax	VAT: 20%	VAT: 19%
Standard VAT	20%	19%
Typical resident dividend tax	10.75% / 35.75% / 39.35%	0% SDC for many non-doms; 5% SDC if domiciled

Who wins on each tax

Personal income taxCyprus

Cyprus personal rates are 0% to 35% with a EUR 22,000 0% band from 2026, below the UK's 45% (48% in Scotland) plus National Insurance.

Corporate taxCyprus

Cyprus corporate tax is 15% from 2026, below the UK's 25% main rate and 19% small-profits rate.

Capital gains taxCyprus

Cyprus generally charges 20% on Cyprus immovable property and property-rich companies, with a broad exemption for share disposals. UK individuals pay 18% or 24% on many investment gains from 6 April 2026.

Dividend taxCyprus

Non-dom Cyprus residents usually pay 0% SDC on dividends. UK additional-rate dividends are 39.35% from April 2026.

Inheritance taxCyprus

Cyprus has no inheritance tax. The UK charges 40% and can include worldwide assets for long-term residents.

The verdict

Cyprus is the lighter EU personal base in this pair. Income tax runs from 0% to 35% with a EUR 22,000 tax-free threshold from 2026. Non-domiciled Cyprus tax residents are generally exempt from Special Defence Contribution on dividends, so many dividend receipts are 0% in Cyprus. The UK charges 10.75%, 35.75% or 39.35% on dividends from April 2026 after a GBP 500 allowance.

The 60-day Cyprus residence route and the non-dom overlay are planning tools, not a guarantee. The 2026 reform updated the 60-day rules, so days, business and ties need a fresh review. The UK uses its statutory residence test and, for inheritance tax, a long-term residence test that can put worldwide assets into 40% IHT.

Choose Cyprus for an EU company at 15% and for dividend-heavy owners who actually qualify as non-dom. Choose the UK when London markets or English-law work are the point. Cyprus CGT is mainly 20% on immovable property, while UK individuals pay 18% or 24% on a much wider set of gains.

How to read this comparison

Cyprus is one of the few EU systems that still looks light next to the United Kingdom on both company profits and personal investment income. The comparison only holds if residence is real.

From 2026 Cyprus personal income tax starts with a EUR 22,000 0% band and rises to 35%. Social insurance and GESY still sit on employment. The UK reaches 45% outside Scotland and 48% in Scotland, with National Insurance on wages. Cyprus companies pay 15% from 1 January 2026, against UK corporation tax of 19% or 25%. Share-disposal gains are often exempt in Cyprus, while UK individuals pay 18% or 24% from 6 April 2026 after a GBP 3,000 annual exempt amount. Cyprus CGT at 20% is mainly a property and property-rich-company tax.

Dividends are the marketing line, and they need the domicile split. Cyprus generally withholds 0% on dividends. Non-domiciled Cyprus tax residents are usually outside Special Defence Contribution, so many dividend receipts stay at 0%. Domiciled residents can owe 5% SDC on dividends from 2026 profits. The UK, by contrast, taxes resident shareholders at 10.75%, 35.75% or 39.35% from April 2026. Inheritance tax is the other cliff: Cyprus has none; the UK has 40% and can include worldwide assets once you are a long-term UK resident.

The 60-day residence test is why Cyprus appears on founder shortlists. It is also why people get this pair wrong. The 2026 reform changed the 60-day conditions. A few trips and a shelf company will not do. The UK statutory residence test and IHT long-term residence test work in the opposite direction: they are hard to drop accidentally. A four-year foreign-income-and-gains claim can soften the first UK years after a decade abroad, but it does not match a standing Cyprus non-dom dividend exemption.

Which one fits you

🇬🇧 Choose United Kingdom if you're a…

Businesses that need UK customers, talent or capital markets
People who value the UK treaty network and English-law courts
Qualifying newcomers using the four-year foreign-income-and-gains regime

🇨🇾 Choose Cyprus if you're a…

Non-domiciled residents who want 0% Cyprus dividend SDC
Founders using a 15% EU company rate
People who can meet the 60-day or ordinary residence tests with real ties

Frequently asked questions

Is Cyprus cheaper than the UK for tax?

Usually yes for personal income, company profits, dividends for non-doms and inheritance tax. VAT is close (19% versus 20%). UK CGT can still be competitive on a broad share sale because Cyprus property-rich gains are 20% and UK listed-style gains are 18% or 24%.

Do Cyprus non-doms pay dividend tax?

Usually no Special Defence Contribution applies to non-domiciled Cyprus tax residents on dividends. Cyprus-domiciled residents can owe 5% SDC on dividends from 2026 profits. Income tax generally does not apply to dividends.

Can I become Cyprus resident in 60 days?

A 60-day route exists, but the 2026 reform updated the conditions. Days in Cyprus, days elsewhere, a business or employment link and a permanent home still need checking. It is not a paper residence.

Does the UK still tax dividends if I move to Cyprus?

UK tax residence and UK-source rules can still apply. Leaving the UK is a statutory residence-test question, not a Cyprus company question. Long-term UK residence can also keep worldwide assets in the 40% IHT net.

United Kingdom vs Cyprus taxes