Is my UK pension taxed in Cyprus or in the UK?
Short answer
Under the UK–Cyprus tax treaty, private and workplace pensions and the UK State Pension are taxed only in Cyprus once you live there. UK government service pensions stay taxable only in the UK, unless you are a Cypriot national.
The treaty, in force for UK income tax since 6 April 2019, says pensions paid to a resident of one country are taxable only in that country. Government service pensions, such as civil service and armed forces pensions, are the exception, and the transitional option to keep the old treatment ended on 31 December 2024.
In Cyprus, you can choose to pay a flat 5% on foreign pension income above €5,000 a year instead of the normal rates. From 1 January 2026, lump sums from approved UK pension schemes are tax-free in Cyprus.
HMRC's guidance treats a lump sum the same way as the pension under a tax treaty. A lump sum taken while abroad can still be taxed in the UK if you return within five years.
Sources
- UK–Cyprus double taxation convention (2018, as amended by the 2018 protocol) gov.uk
- HMRC manual DT5354: Cyprus, government pensions gov.uk
- GOV.UK: government service pensions under the UK–Cyprus convention gov.uk
- HMRC manual INTM163160: pension lump sums under tax treaties gov.uk
- Income Tax Law 118(I)/2002, consolidated text (CyLaw) cylaw.org
- Law 67(I)/2026 (CyLaw) cylaw.org
Information, not advice. This answer describes the published rules as they stand on 12 October 2026, checked against the sources listed. Tax and residence rules depend on your own circumstances and change; check your position with a tax adviser qualified in the UK and in Cyprus before you act on it.
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