[BUYING AND SELLING REAL ESTATE IN CYPRUS]
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to hold it under the terms of the trust. Trustees are appointed by the settlor. The trustees’ main duties are to administer the trust property prudently and to comply strictly with the terms of the trust. The general rule is that the trustees do not have the power to vary the terms of the trust under any circumstances. ✓ The Cyprus International Trust (CIT) The Cyprus International Trusts Law has been coming in force in 1992 and the last amendment made in 2013. This legislation ranked the Republic of Cyprus as one of the best jurisdictions for the creation of an international trusts due to their advantages compare to other jurisdictions. The duration of the CIT may continue perpetuity. As provided in the legislation a CIT is deemed irrevocable. It may revoke only if it is clearly provided for such an option in the trust deed. Advantages Some of the advantages of the CIT are the exemption of the tax, for instance, income, gains and profits from non-Cyprus sources are exempt from income capital gains tax, special defence contribution or any other taxes in Cyprus. Additionally, worldwide income, profit and gains are taxable in Cyprus only where the beneficiary is a Cyprus tax resident; beneficiaries who are non- residents of Cyprus are taxed only on Cyprus sourced income in accordance with the Cyprus income tax laws. Dividends received by a CIT are not taxable and not subject to withholding tax in Cyprus. Also, there is no estate duty or inheritance tax in Cyprus. It is worth mentioning that CIT may be used to protect assets from risks arising in tort, contract or otherwise in relation to
transactions entered by the settlor. Confidentiality and reporting
The registration of the CIT is necessary, but confidentiality of the beneficiary is safeguarded. There are no reporting requirements in Cyprus for the CITs other than registration of its existence. Complicated family structures – family wealth management and estate planning This scheme is ideal for high-net-worth individuals with somehow complicated family structures Another form of beneficial ownership is the life interest reservation. This confers on the beneficial owner the right to possess or exploit the tenement for the period of his life while the title is in the name of another. This is usually a course adopted by parents when transferring their land to their children. F. Closing Cost – Completion Transfer of property in buyer’s name. The property is transferred in the name of the buyer at such time and upon such terms as stated in the sale contract. It is important to note that for the transfer of the property to be possible (a) the seller must obtain a Tax Clearance Certificate; and (b) Transfer Fees must be paid. Transfer fees are calculated by the Land Registry on the value of the property (as valued by the Land Registry) as follows:
Value
Rate Current rate of 50%
€0 - €85.000
3%
1,5%
€85.000,00 – €170.000 5%
2,5%
€170.001 and above
8%
4%
G. Recording Real Estate Documents The submission of the Contract of Sale or the
ILN Real Estate Group – Buying and Selling Real Estate Series
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