‘’At PAHALAW we strive to deliver tailor cut estate planning solutions for tax optimization, asset management and succession law purposes to protect our clients’ hard-earned savings while taking care of the stressful uncertainties of tomorrow ’’. Paris Hadjipanayis, CEO

As a head start, in this article we present you with a list of our ten most essential tips you need to be aware of prior to dealing with your estate planning matters in Cyprus:

  1.  Income, gains and profits generated abroad are tax exempt and do not bear any withholding tax or taxation on redemption of units or interest on dividend payments under a CIT or AIF structure for foreign investors or non-Cyprus tax residents;
  2. Profits generated by the disposal of shares, securities, dividends received, capital gains from the sale of shares / property companies abroad are tax free under an AIF set up;
  3. As of 2015 there is a Notional Interest Deduction for taxable profits on new equity held by the company (AIF) with a restriction of a 10 year bond yield +3%;
  4.  Full confidentiality and protection of anonymity for CIT’s class of beneficiaries and AIF’s unit holders;
  5.  An AIF umbrella structure can segregate its funds by allocating equity in multiple sub-funds and the respective unit holders of each sub fund will enjoy protection from any type of civil liability and creditor claims stemming out of a cross sub-fund (ring fencing of assets);
  6.  CITs may be also used for tax optimization purposes on worldwide assets and tax avoidance on foreign chargeable gains and be treated as exempted property for UK non-domiciles on an income, capital gains and inheritance tax basis that would otherwise be taxed on the arising basis of taxation by the HMRC in the UK post 06/04/2017;
  7.  Any type of investment via the setting up of a CIT or AIF of €2,000,000 will qualify for acquiring a Cyprus passport and gain access to EU market under a dual passport regime; A Permanent Residence Permit will allow you to change your tax residence to Cyprus upon purchasing a €350,000 estate and use it as your domicile of choice;
  8.  By setting up a CIT the settlor can avoid the “per stripe” formula distribution rule for non-disposable assets for family members up to the third degree of lineage.
  9. By contrast to drafting a Will which can be negated at any time during your lifespan when acquiring new assets or when a legal hair is born / added to the line of succession, a CIT will remain in force for an indefinite period of time regardless of such changes and serve your beneficiaries’ interests.
  10. Failure to plan your estate matters on time will always lead to a probate action taking place in court which will inevitably increase running costs as well as create a delay of up to 5 years for completion.

For more information please contact Mr. Paris Hadjipanayis via e-mail at [email protected] and get a free fee quote upon filling in our dedicated estate planning questionnaire.

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