The start of a new year often encourages reflection and goal-setting — and for British expatriates living in Cyprus, who may wish to review whether their financial planning is still aligned with their lifestyle, long-term ambitions and family objectives in 2026. Changes to tax rules, pensions and inheritance frameworks in both Cyprus and the United Kingdom mean that financial arrangements should be reviewed regularly to remain appropriate and effective.
At Blacktower Financial Management, we have nearly 40 years’ experience supporting expatriates with cross-border financial planning. We understand that while Cyprus offers an attractive lifestyle and a favourable tax environment, managing wealth across jurisdictions requires careful, coordinated planning. A strategic financial review could support your financial arrangements, potentially providing clarity, confidence and long-term security.
Why the New Year Is the Right Time for a Financial Review
While financial planning can be reviewed at any point, January provides a natural opportunity to take stock. A review helps confirm whether your existing arrangements remain up to date, compliant and suitable — particularly in light of recent regulatory changes or shifts in personal circumstances.
Importantly, a meaningful review goes beyond checking investment performance or tax filings. Strategic financial planning looks at how all elements of your wealth — taxation, investments, pensions and estate planning — work together to support your future.
Changes in income, residency status, family structure, health or retirement plans can all have a significant impact on your financial position. Reviewing these elements together helps reduce the risk of unintended outcomes.
Strategic Financial Planning: Seeing the Bigger Picture
Many people manage their finances in separate parts. They may invest in funds chosen years ago, speak to an accountant about Cyprus tax rules, consult a lawyer to draft a will, and review pensions independently. While each step may be sensible, this fragmented approach can lack cohesion.
For expatriates, this can be problematic. The way investments are structured can influence tax exposure in Cyprus; pension decisions can affect estate planning outcomes; and UK tax rules may continue to apply even after relocation.
Strategic financial planning brings these areas together, creating a coordinated approach where each decision supports the wider plan.
Residency and Taxation: Establishing the Foundations
Understanding your tax residency position is a critical first step, particularly if you are new to Cyprus or divide your time between countries. Cyprus and UK residency rules differ and can be more complex than expected.
The double tax treaty between Cyprus and the UK helps determine where income is taxed, but it does not remove theneed for careful planning. Even individuals who planned meticulously in the UK may need to start afresh once resident in Cyprus.
What was tax-efficient in the UK may no longer be suitable. Exploring compliant structures available in Cyprus can help reduce unnecessary tax exposure while still meeting your financial objectives.
British expatriates should also remain aware of ongoing UK tax considerations, including income tax on certain government service pensions, pension allowances and the overseas transfer charge. Reviewing your arrangements regularly can help ensure that changes in legislation are properly accounted for.
Inheritance Tax: Understanding Opportunities and Risks
Inheritance tax (IHT) remains a key concern for many British families living abroad. UK nationals remain subject to UK IHT on worldwide assets for up to ten years after leaving the UK. After this period, only UK-situated assets generally remain within scope.
This creates planning opportunities. With careful structuring, it may be possible to reduce future UK IHT exposure by managing the level of assets retained in the UK, subject to individual circumstances and professional advice.
Cyprus itself does not levy inheritance tax, which can make it an attractive jurisdiction from an estate planning perspective. However, the interaction with UK rules must be carefully considered.
From April 2027, most UK-registered pension schemes are expected to form part of an individual’s estate for UK inheritance tax purposes. This significant change highlights the importance of proactive pension and estate planning for expatriates living in Cyprus.
Estate Planning: Don’t Leave It Until Last
Estate planning is often an integral part of an overall financial strategy, not an afterthought. The way assets are owned and structured can influence how efficiently they pass to heirs and what taxes apply.
For expatriates, this includes reviewing wills, beneficiary nominations and asset ownership to ensure they remain appropriate for life in Cyprus. Early planning can help ensure that your wishes are carried out smoothly and that beneficiaries are not faced with unnecessary delays or administrative burdens.
Considering estate planning alongside tax and investment planning helps avoid conflicts between jurisdictions and reduces the risk of unintended consequences.
Investments: Are They Still Suitable for Your Life in Cyprus?
Your investment strategy should reflect your current lifestyle, future plans, income needs and attitude to risk. If your portfolio has not been reviewed recently, it may be worth reassessing whether it remains suitable today.
Questions to consider include:
- Are your investments aligned with your current risk tolerance and time horizon?
- Are they appropriate for the current economic environment?
- Do you have sufficient diversification across asset classes and regions?
- Can your portfolio provide income without unduly eroding capital?
- Would consolidating holdings make management simpler and clearer?
Alongside performance, tax efficiency is an important consideration. Holding investments in appropriate structures can help reduce liabilities on income and gains in Cyprus. It is also important to consider how these assets will pass to your heirs and whether probate delays can be minimised.
Pensions: Reviewing a Key Component of Your Wealth
Pensions are often among the most valuable assets expatriates hold. Decisions around pensions can affect retirement income, tax exposure and estate planning outcomes.
When reviewing your pension arrangements, it is important to understand how UK rules continue to apply and how changes — including inheritance tax treatment from 2027 — may affect your plans. Pension decisions should always be considered in the context of your wider financial strategy and with regulated, cross-border advice.
Bringing Everything Together
Every family’s circumstances are unique, and there is no universal solution. Strategic financial planning can help create a unified approach where tax planning, investments, pensions and estate arrangements work together to potentially support long-term security and peace of mind.
At Blacktower Financial Management, we specialise in cross-border financial planning for expatriates. By taking a holistic approach, we can help clients navigate complexity, remain compliant and build strategies aligned with their goals for life in Cyprus.
A new year is more than a calendar change — it may present an opportunity to strengthen your financial foundations. Taking time now to review and refine your arrangements can help ensure you and your family are well positioned for 2026 and the years ahead
This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.
When relocating to a new country, it’s good to know all your options so you can ensure you have the smoothest transition possible. For one thing, there’s the financial side to worry about.
During these unprecedented times the Corona Virus pandemic has impacted so many lives in so many ways. The fact that every country in the world is affected and having to take measure to help support their economy will have such profound long-term consequences that governments are forced to take actions never before seen. You have probably seen the headlines: Australia pumping $66Billion into their economy, Spain €200 Billion, UK £500 Billion, USA $2Trillion, the list goes on.