Move to Cyprus - pay 5% on DC pot possible?

Miiade

So we are considering moving to Cyprus once retired (6/7 years away), for a trial period of 1/2 years to see if we like it.

After looking at tax rates it states that pension income from abroad is taxed at 5%. Does this mean I can take 25% of my dc pot whilst in the U.K., move Cyprus following year and draw rest at 5%.?

Tax is not the reason for wanting to go, but if the above is correct it’s a low rate. 

Does anyone know if this 5% applies to DC funds?

Thanks

Dazed_and_C0nfused

What about UK tax?

Miiade

Dazed_and_C0nfused said:

What about UK tax?

So as a tax resident of Cyprus I would have to pay both U.K. and Cyprus tax on my pension? 

bostonerimus

You need to look at Article 17 and maybe 18 of the UK/Cyprus tax treaty to see how your UK pensions will be taxed. But the rubric is pretty standard and reserves the right to tax pensions to the  country of residence.

Albermarle

Dazed_and_C0nfused said:

What about UK tax?

AFAIUI, there is a double taxation agreement between UK and Cyprus, which means someone resident in Cyprus can opt to pay lower taxes there. It is the reason Cyprus is popular with Brits.

Cyprus Specific Pension Information

All pensions originating from the UK are subject to tax in Cyprus. However, if you do not nominate Cyprus then the deduction of tax will occur in the UK, where the tax will be higher. Why? Income declared in Cyprus means the tax can be reduced to 5%.