In Cyprus there is no inheritance tax which makes it an attractive jurisdiction to secure the future and well-being of your family and legacy.  In order to benefit from the favorable inheritance regime a person must be domiciled in Cyprus which, in short, means that they must either permanently reside or intend to permanently reside in Cyprus.

Despite the non-existence of inheritance tax, legal fees do exist and are calculated according to the value of a person’s estate at the time of their death.  Legal Fees are set according to the MINIMUM FEE LIMITS OF PRACTICING LAWYERS (OUT-OF-COURT CASES) REGULATIONS OF 1985 – 2006 which can be found by clicking here, however fee's can also be individually negotiated.

Will or No Will

Should you decide to draw up a will you will have the opportunity to appoint an executor and leave instructions for the distribution of your estate.  Upon your death the appointed executor will file letters of administration at the relevant District Court and request a grant of probate (a court order) which will allow them to act in the name of your estate and distribute your property and belongings according to your instructions.  

The executor can be any physical person of sound mind, sometimes a trusted family member or your lawyer who will have the legal knowledge and experience to execute your final instructions professionally. 

On the other hand where a person has not drawn up a will they will not have appointed an executor and as such it will be left to the living legal heirs to consent to the appointment of suitable administrator who will, like the executor, petition the District Court, for a grant of probate.

In the absence of a will the estate will be distributed in accordance with the provisions of the Wills and Succession Law Cap. 195 which provides 7 classes of legal heirs in a hierarchical order of priority based on the degree of relation to the deceased. Should the 1st class not exist then the 2nd class will inherit and so on. The first class of legal heirs, and the most common, is the Spouse (Husband or Wife) and the children of the deceased who usually will each inherit an equal share of the estate.

Forced Heirship

There is a provision in the Wills and Succession Law Cap. 195 which safeguards 25% (or more depending on the surviving class of heirs) of the deceased’s person’s estate in favor of the legal heirs. This is known as ‘forced heirship’ and prevents a person domiciled in Cyprus distributing 25% of their estate to persons other than the legal heirs. This rule now applies to foreign nationals domiciled in Cyprus who prior to Law 96(I) of 2015 were exempt from forced heirship. Nonetheless there are ways to circumvent this rule in cases where it may cause problems in relation to the administration of the estate.

Duties & Responsibities

In both cases, once an administrator or an executor has been appointed, their duty is to manage the estate under the supervision of the court. Their duties include, generally collecting the whole estate, whether it comprises of property, money, shares or personal belongings and distributing it to the legal heirs in accordance with the Will or the Law.  

As mentioned above the Court supervises the administration of the estate and the designated lawyer will have a responsibility to file an inventory of the estate to the courts. Subsequently they will file accounts with the registrar showing what has been done or what remains to be done in relation to the administration of the estate. By appointing a lawyer they can act in their double capacity as a lawyer and administrator under the supervision of the court saving time and expenses.  

Other duties which the administrator or executor may need to deal with include the obtainment of tax exemptions, filing any incomplete tax returns, the transfer of land or money deposits to the heirs, or even the sale of all or part of the estate to satisfy creditor demands.

Conclusion

The above is a general outline of the Inheritance regime in Cyprus which is unique to Cyprus and highly beneficial due to the fact that there is no inheritance tax. People that can benefit from the regime include foreign nationals with movable or immovable property in Cyprus and members of the Greek diaspora.

 

Zacharias Chr. Poutziouris,

Christos Poutziouris & Associates LLC

Lawyer, LLB

 

©Intellectual property of Poutziouris Law Firm

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