Moving from the UK to Europe: Your Tax Reasearch

Moving from the UK to Europe in 2025

Who This Guide Is For

This guide is designed for UK citizens—including employees, contractors, company founders, high-net-worth individuals (HNWIs), remote workers, and retirees—who are planning a permanent or long-term move to any country within the European Union (EU), European Economic Area (EEA), or Switzerland. It is intended for the diligent planner who seeks a comprehensive understanding of the tax, residency, and healthcare implications before engaging professional advisors.

Key Decisions That Shape Your Tax Bill

Relocating from the UK to Europe involves a series of critical decisions, each with significant financial consequences. The most impactful choices include:

• Timing of Departure: The precise date you leave the UK can determine your tax residency status for the entire tax year, affecting your liability on income and capital gains.
• Choice of Country: European nations offer vastly different tax environments, from high-tax, high-service models to jurisdictions with special regimes for expatriates.
• Work Structure: Your tax and social security obligations will differ fundamentally depending on whether you are an employee of a local or UK company, a self-employed contractor, or a director of your own limited company.
• Property Decisions: Whether you buy or rent in your new country, and whether you sell or keep your UK home, has profound implications for tax residency, wealth taxes, and capital gains tax.
• Healthcare Planning: Post-Brexit, securing comprehensive health coverage is a legal and practical necessity, often forming a mandatory part of the visa and residency process.

Top 5 Tax Optimisation Levers

Successfully navigating a cross-border move involves leveraging several key strategic pillars to legally minimise your global tax burden. This guide provides in-depth analysis of these levers, which include:

1. Mastering UK and EU Residency Rules: Proactively managing your physical presence and personal ties to achieve a clean break from UK tax residency and establish it clearly in your chosen European country.
2. Leveraging Double Taxation Treaty Benefits: Using the "tie-breaker" rules in bilateral treaties to ensure you are not taxed on the same income in both the UK and your new home country.
3. Utilising Special Expatriate Tax Regimes: Taking advantage of favourable tax schemes offered by countries like Spain, Italy, the Netherlands, and others to attract foreign talent and investment.
4. Strategic Timing of Asset Disposals: Planning the sale of assets, such as shares or investment properties, to align with your residency status, potentially realising gains in a lower-tax environment.
5. Aligning Corporate Structure with Personal Residency: For business owners, ensuring the location of company management and control aligns with personal residency to prevent unintended corporate tax liabilities.

Compliance Disclaimer

This guide provides general information only and does not constitute tax, legal, or financial advice. Tax rules are complex and change frequently. We strongly recommend seeking personalised advice from qualified professional advisors in both the UK and your destination country before making any decisions. All rates and rules are based on information available for the 2025 tax year and were last reviewed on the date specified at the top of this article.

2. UK Foundations Before You Move: Mastering Your Exit

A successful and tax-efficient move to Europe begins with a meticulously planned exit from the UK. Failure to correctly navigate His Majesty's Revenue and Customs (HMRC) rules can result in the UK continuing to tax your worldwide income and assets for years after you have physically left. This section details the fundamental concepts you must understand to achieve a clean break.

2.1. The UK Statutory Residence Test (SRT): Are You Truly Leaving?

Since 6 April 2013, whether an individual is a UK tax resident is not a matter of choice but is determined by a prescriptive and complex set of rules known as the Statutory Residence Test (SRT). The test is applied for each tax year (6 April to 5 April) and must be worked through in a specific order.

Part 1: Automatic Overseas Tests

If you meet any one of these tests for a tax year, you are automatically considered non-resident for that year, and no further tests are needed. This is the most conclusive way to sever UK tax ties.

• Fewer than 16 days in the UK: You are automatically non-resident if you were UK resident in one or more of the three preceding tax years and you spend fewer than 16 days in the UK in the current tax year.
• Fewer than 46 days in the UK: You are automatically non-resident if you were not UK resident in any of the three preceding tax years and you spend fewer than 46 days in the UK in the current tax year.
• Full-Time Work Overseas: You are automatically non-resident if you work full-time overseas for the tax year with no 'significant break', spend fewer than 91 days in the UK, and work for more than three hours in the UK on fewer than 31 days. This is often the most effective route for those moving for employment.

Part 2: Automatic UK Tests

If you do not meet any of the Automatic Overseas Tests, you must then check if you meet any of the Automatic UK Tests. If you meet just one, you are automatically UK resident for the tax year.

• The 183-Day Rule: You are automatically UK resident if you spend 183 days or more in the UK in the tax year. This is the first and most straightforward test to consider.
• The 'Only Home' Test: You are automatically UK resident if you have a home in the UK for a period of more than 90 days, you are present in that home on at least 30 separate days during the tax year, and you have no home overseas (or if you do, you are present in it for fewer than 30 days). A 'home' is a substantive concept implying a degree of permanence and stability, not just temporary accommodation.
• Full-Time Work in the UK: You are automatically UK resident if you work full-time in the UK for any period of 365 days with no significant break, where at least part of that period falls within the tax year.

Part 3: The Sufficient Ties Test

If your position is not determined by either of the automatic tests, your residency status depends on a combination of the number of days you spend in the UK and the number of "ties" you have to the UK. The more ties you have, the fewer days you can spend in the UK before becoming resident.

The five ties to consider are :

1. Family Tie: Your spouse, civil partner, cohabiting partner, or minor child is UK resident.
2. Accommodation Tie: You have accommodation available to you in the UK for a continuous period of at least 91 days, and you spend at least one night there. Accommodation with a close relative can be ignored if you spend fewer than 16 nights there.
3. Work Tie: You work in the UK for more than three hours a day on at least 40 days in the tax year.
4. 90-Day Tie: You spent more than 90 days in the UK in either or both of the two preceding tax years.
5. Country Tie (for recent residents only): You spent more days in the UK in the tax year than in any other single country. This tie only applies if you were resident in one or more of the three preceding tax years.

The number of days you can spend in the UK without becoming resident depends on how many of these ties you have. For example, an individual who was resident in the UK in one of the previous three years can spend up to 120 days in the UK if they have only one tie, but this drops to just 16 days if they have four ties.

Key Considerations for the SRT:

• Day Counting: A day in the UK is generally counted if you are present in the country at midnight. Meticulous record-keeping, including flight tickets, boarding passes, and travel diaries, is essential to prove your day count to HMRC.
• Exceptional Circumstances: Up to 60 days of presence in the UK can be disregarded if your presence is due to exceptional circumstances beyond your control, such as sudden illness, civil unrest, or natural disaster. HMRC interprets this rule very narrowly, and it is subject to a strict 60-day annual limit.
• Split-Year Treatment: In the year you leave the UK, it may be possible to apply 'split-year treatment'. This divides the tax year into a 'UK part' (where you are taxed as a resident) and an 'overseas part' (where you are taxed as a non-resident). This is not automatic and is only available if you meet one of eight specific qualifying cases, such as starting full-time work overseas. This is a critical tool for timing income recognition and capital gains.

2.2. Domicile vs. Residence: The Critical Distinction for Inheritance Tax (IHT)

For decades, UK Inheritance Tax (IHT) exposure on worldwide assets has been governed by the complex and subjective concept of 'domicile'. However, a seismic shift is underway. From 6 April 2025, the UK is moving to a new residence-based system for IHT, making the implications of UK tax residence far more significant and long-lasting.

The Old System (Pre-April 2025)

Historically, if you were domiciled (or 'deemed domiciled') in the UK, your entire worldwide estate was subject to UK IHT at 40% on death, above the available allowances. Domicile is a concept of general law, broadly meaning the country you consider your permanent home. For most UK citizens, this is a 'domicile of origin' in a part of the UK, which is notoriously difficult to shed, even after decades of living abroad.

The New System (From 6 April 2025): A Residence-Based Revolution

The new rules replace the subjective domicile test with a more objective, residence-based framework for determining IHT exposure on non-UK assets.

• Long-Term Resident (LTR) Status: An individual will be considered a Long-Term Resident for IHT purposes if they have been UK tax resident for 10 out of the 20 tax years preceding a chargeable event (e.g., death or transfer to a trust). A split tax year counts as a full year of residence for this test.
• The IHT "Tail": Crucially, becoming non-UK resident does not immediately remove your worldwide assets from the UK IHT net. If you are an LTR when you leave, your worldwide estate remains subject to UK IHT for a "tail" period. The length of this tail depends on your residence history, extending up to a maximum of 10 years of non-residence. This means that even a decade after moving to Europe, a former long-term UK resident could still face a 40% UK IHT charge on their worldwide assets.
• Impact on Trusts: The IHT treatment of trusts will also be linked to the settlor's LTR status. This means that transfers into trust while an LTR (even after leaving the UK but still within the 'tail') could trigger entry charges, and the end of the IHT tail could trigger an exit charge on non-UK assets held in the trust.

The interaction between the strict, mechanical nature of the SRT and the severe, long-term consequences of the new IHT regime creates a formidable challenge for anyone planning to leave the UK. The SRT's complex rules on day counts and 'ties' make it easy to inadvertently remain a UK tax resident. The new IHT rules mean that each year of UK residence, whether intentional or accidental, now counts towards the 10-year LTR threshold. This combination effectively creates a tax 'pincer movement', where the difficulty of achieving a clean exit is matched by the escalating and long-lasting consequences of failing to do so. Meticulous planning to definitively break UK tax residence is no longer just about optimising income tax; it is now a fundamental requirement for protecting a family's entire worldwide estate from a 40% tax charge for potentially a decade after relocating.

2.3. Double Taxation Treaties (DTTs): The Ultimate Safety Net

A Double Taxation Treaty (or Agreement) is a bilateral agreement between two countries designed to prevent individuals and companies from being taxed on the same income or gains in both jurisdictions. The UK has an extensive network of over 130 such treaties, including with every EU and EEA country and Switzerland. A DTT overrides the domestic law of both countries.

The most critical function of a DTT for an individual mover is its set of "tie-breaker" rules. It is possible to be a tax resident of both the UK (under the SRT) and, for example, Spain (under its 183-day rule) in the same year. This is known as being a 'dual resident'. The DTT's tie-breaker tests resolve this conflict by assigning treaty residence to just one country. The tests must be applied in sequential order until a definitive answer is found :

1. Permanent Home: In which country do you have a permanent home available to you? A home does not need to be owned; a long-term rental property qualifies. If you have a home in both countries, move to the next test.
2. Centre of Vital Interests: If a permanent home exists in both countries, in which country are your personal and economic relations closer? This is a highly factual test that considers family, social connections, business activities, location of bank accounts, and where personal assets are administered. This is often the deciding factor but can be the most contentious.
3. Habitual Abode: If the centre of vital interests cannot be determined, in which country do you have a habitual abode (i.e., where do you spend more time regularly)?.
4. Nationality: If you have a habitual abode in both or neither, your nationality becomes the deciding factor.
5. Mutual Agreement: If you are a dual national, the tax authorities of the two countries must come to a mutual agreement to resolve your residency status.

Achieving "treaty non-resident" status in the UK is a powerful outcome. It generally restricts the UK's taxing rights to UK-source income only (e.g., rental income from a UK property or a UK government pension). Your new country of residence, where you are "treaty resident," gains the primary right to tax your worldwide income, including employment income for work performed outside the UK, foreign investment income, and most pensions.

2.4. Your Pre-Departure Financial Checklist

Proper administrative and financial planning before you leave is vital to ensure a smooth transition and avoid costly errors.

Notifying HMRC

You must inform HMRC that you are leaving the UK permanently or to work abroad full-time for at least one full tax year.

• If you do not file a Self Assessment tax return: You must complete and submit Form P85, "Leaving the UK - getting your tax right." This form helps HMRC determine your residency status for the departure year, process any tax refund you may be due, and update your records.
• If you do file a Self Assessment tax return: You do not file a P85. Instead, you complete the 'residence' section (form SA109) of your tax return to declare your departure and residency position.

ISAs and SIPPs

• Individual Savings Accounts (ISAs): Once you become non-resident, you can no longer make contributions to your ISAs (unless you are a Crown employee). You must inform your ISA provider of your change in residency status. While you can keep your ISAs open and the funds within them will continue to benefit from UK tax relief on income and gains, this tax-free status is not recognised by other countries. The income and gains generated within your ISA will almost certainly be taxable in your new country of residence. It is often tax-efficient to sell assets within a Stocks & Shares ISA
  before you cease to be a UK resident to crystallise gains free of UK CGT.
• Self-Invested Personal Pensions (SIPPs): You can continue to hold and manage your SIPP after moving abroad. When you start drawing income, the tax treatment is typically governed by the DTT between the UK and your country of residence. Most treaties grant the sole taxing rights to the country of residence, meaning your UK pension income will be taxed in Europe, not the UK. You can continue to receive UK tax relief on contributions of up to £2,880 net (£3,600 gross) per year for the first five full tax years of non-residence.

Capital Gains Tax (CGT)

• Timing of Disposals: A key planning opportunity is to time the sale of assets (e.g., a share portfolio) to fall in the 'overseas part' of a split year or in a tax year where you are fully non-resident in the UK. This can remove the gain from the scope of UK CGT. However, this must be carefully planned to avoid falling foul of the Temporary Non-Residence rules.
• Temporary Non-Residence Rules: These rules are designed to prevent individuals from leaving the UK for a short period simply to dispose of assets tax-free. If you were a UK resident for at least four of the seven tax years before you left, and you return to the UK within five years of your departure, any gains made during your period of non-residence on assets you owned before you left will become chargeable to UK CGT in the tax year of your return.
• UK Property: Non-residents remain fully liable for UK CGT on gains arising from the disposal of UK residential and commercial property. You must report the gain and pay any tax due to HMRC within 60 days of the completion of the sale, using the online Capital Gains Tax on UK property service.

UK Property Decisions

• Sell or Keep? If you sell your main home, any gain is usually exempt from CGT due to Principal Private Residence (PPR) Relief. However, the final period of ownership that qualifies for relief is now only nine months (down from 36 months previously), so a long delay between moving out and selling can lead to a portion of the gain becoming taxable. If you keep your UK property and rent it out, the rental income remains subject to UK income tax, which you must declare to HMRC, typically through the Non-Resident Landlord Scheme or a Self Assessment tax return.
• Stamp Duty Land Tax (SDLT): If you retain your UK home and later decide to buy another property in the UK (e.g., as a holiday home or on a return visit), you will be subject to the 3% SDLT surcharge for additional dwellings. Furthermore, non-UK residents purchasing property in England or Northern Ireland are subject to an additional 2% SDLT surcharge on top of all other rates.

Data notes: Deadlines and forms are correct as of August 2025. Sources:

3. Living Arrangements & Tax Exposure

Your lifestyle choices and business structure in Europe are not just personal decisions; they are fundamental drivers of your overall tax exposure. How you live, where you stay, and how you work will directly influence your tax residency, wealth tax liability, and compliance obligations.

3.1. Buy vs. Rent in Europe

The decision to buy or rent a home in your new country has significant tax consequences that go far beyond simple finances.

• Impact on Tax Residency: Owning a property creates a powerful connection to a country. Under Double Taxation Treaties, having a "permanent home" is the first and most important tie-breaker test. Owning a home in, for example, France, while only renting a small flat in another country, would strongly suggest your treaty residence is French. Renting, particularly on a short-term basis, offers greater flexibility and can make it easier to argue that your centre of vital interests remains elsewhere if you have stronger ties (such as family or business) in another jurisdiction.
• Wealth Tax Exposure: Several European countries, including Spain, Switzerland, and Norway, levy an annual wealth tax on an individual's net assets. Owning real estate directly places its value into the wealth tax calculation. For a tax resident, this applies to worldwide property; for a non-resident, it applies to property located in that country. Renting completely avoids this direct exposure to wealth tax on your primary residence.
• Entry and Exit Costs: Buying property involves substantial transaction costs, which are detailed in the country-specific sections. These typically include a property transfer tax (analogous to SDLT) which can be as high as 10% or more, plus notary, registry, and legal fees. Total upfront costs can often reach 10-15% of the property's value. Renting involves much lower entry costs, typically a security deposit of one or two months' rent.

3.2. Single vs. Multi-Country Stays: The "Digital Nomad" Dilemma

The rise of remote work has enabled a more nomadic lifestyle, but this freedom brings considerable tax complexity. Spending significant time across multiple European countries without a clear plan is a high-risk strategy.

• Day-Count and Dual Residency Risks: Each country has its own domestic rules for determining tax residency, most commonly a 183-day presence test. Spending, for example, 150 days in Portugal and 150 days in Spain within a calendar year could leave you non-resident in both under the simple day-count test. However, if you have other ties, such as a rented home or business activities in one of them, you could still be deemed resident. Spending over 183 days in more than one country in overlapping 12-month periods can result in dual residency, creating a complex web of filing obligations that must be untangled by applying the DTT tie-breaker rules for each country pair.
• Permanent Establishment (PE) Risk: This is a critical issue for remote employees and self-employed contractors. A PE is a fixed place of business through which an enterprise's activities are carried on. If a remote worker's home office in another country is deemed to be at the continuous disposal of their foreign employer, it can create a PE. This would make a portion of the employer's profits subject to corporate tax in that country, a situation most employers are keen to avoid. Similarly, a UK contractor operating through their own limited company from a home office in Europe could create a PE for their own company, triggering local corporate tax obligations.
• Social Security Coordination: For individuals moving between EU/EEA countries and Switzerland, social security contributions are generally payable in only one country at a time. The default rule is that you pay where you work. For multi-state workers, it is crucial to obtain an A1 certificate from your home social security authority. This document proves that you are paying contributions in one member state and exempts you and your employer from paying them in the others where you are temporarily working.

This complexity highlights a critical gap that national health systems cannot fill for a mobile population. While a GHIC provides emergency cover, it is not comprehensive. For those living or working across borders, securing continuous and adequate health coverage is essential. Specialist brokers like WeCovr can arrange international private medical insurance (IPMI) to keep you covered when living abroad, including for multi-country living, ensuring peace of mind regardless of your location.

3.3. Entrepreneurs & Founders: Where to Base Your Business?

For UK founders and company directors, personal relocation cannot be separated from corporate tax strategy. The location from which you run your business is paramount.

A common and dangerous misconception is that a UK-registered limited company will always be tax resident in the UK. This is incorrect. The key test for corporate tax residency is "central management and control". If a sole director and shareholder of a UK Ltd company moves to Spain and makes all key strategic decisions from their Spanish home office, the Spanish tax authorities can—and likely will—argue that the central management and control of the company is in Spain.

This outcome is far more severe than creating a mere Permanent Establishment. It means the entire UK Ltd company is treated as tax resident in Spain. Consequently, its worldwide profits become subject to Spanish corporation tax (currently a flat 25%), not UK corporation tax. Any UK tax already paid cannot be automatically offset, leading to a complex and expensive process of trying to reclaim it from HMRC while paying the Spanish liability. This places founders on a tax tightrope: they must either cede genuine control to other UK-resident directors or accept that their company's tax residency will follow them to their new home.

Other key considerations for entrepreneurs include:

• Controlled Foreign Company (CFC) Rules: UK CFC rules are an anti-avoidance measure designed to prevent UK residents from artificially diverting profits to low-tax offshore subsidiaries. If you move abroad but your company remains UK-resident, and you set up an overseas subsidiary, these rules could still apply if control is deemed to be exercised from the UK.
• Profit Extraction Strategy: The optimal mix of salary and dividends depends heavily on the interaction between corporate and personal tax rules in your country of residence. A low salary/high dividend strategy that is tax-efficient in the UK may be highly inefficient in a country with high tax rates on dividends or different social security treatment.

4. Legal Tax-Optimisation Strategies (Overview)

Effective cross-border tax planning involves more than just compliance; it requires a proactive strategy to legally structure your affairs in the most efficient way. The following strategies represent the primary levers available to individuals moving from the UK to Europe. Each requires careful planning and robust record-keeping.

• Residency Planning: This is the cornerstone of any international tax strategy. It involves proactively managing your UK day counts and ties to ensure you become non-resident under the SRT. Simultaneously, it means establishing clear and defensible ties to your new country to solidify your residency there and achieve a favourable outcome under the DTT tie-breaker rules.
• Asset Sequencing: This strategy concerns the timing of capital gains. Where lawful and compliant with anti-avoidance rules, you can plan to sell assets (such as a share portfolio) during a period when you are tax resident in a jurisdiction with a lower or zero rate of capital gains tax. This might involve becoming non-resident in the UK before becoming resident in your new, higher-tax European home, creating a window of opportunity. This requires careful navigation of the UK's Temporary Non-Residence rules.
• Corporate Structuring: For entrepreneurs and contractors, choosing the right business structure is critical. This could mean continuing to operate through a UK limited company (if management and control can genuinely remain in the UK), establishing a new company in the destination country, or registering as a self-employed individual (autónomo, freiberufler, etc.). The optimal choice depends on a blend of corporate tax rates, social security costs, administrative burdens, and the rules governing profit extraction (salary vs. dividends).
• Social Security Coordination: Navigating the EU Social Security Coordination Regulations (which the UK continues to participate in post-Brexit) is essential. By obtaining an A1 certificate, you can ensure you and your employer only pay social security contributions in one country at a time, preventing costly double charges. This is particularly important for multi-state workers and those on temporary assignments.
• Pension Planning: While you cannot move your UK State Pension, private pensions like SIPPs offer flexibility. Understanding the relevant DTT article on pensions is key to ensure income is taxed in your country of residence, often at favourable rates. For those with larger pension pots considering a permanent move outside the UK, a transfer to a Qualifying Recognised Overseas Pension Scheme (QROPS) may be an option, though this is a highly specialist area requiring expert advice due to complex rules and the Overseas Transfer Charge.
• Wealth and Inheritance Planning: This involves a dual-pronged approach. First, understanding the UK's new residence-based IHT rules and your potential exposure via the 10-year "tail". Second, integrating this with the inheritance and gift tax rules of your new country. This may involve making gifts before moving, utilising trusts where appropriate, and ensuring your will is valid and tax-efficient in both jurisdictions.
• Evidence and Record-Keeping: No tax strategy is effective without the evidence to support it. Meticulous record-keeping is non-negotiable. This includes detailed travel diaries, flight and train tickets, bank and credit card statements to prove your location, minutes of company board meetings, and employment contracts that clearly define your place of work. In a dispute with a tax authority, the burden of proof often lies with the taxpayer.

Data notes: This table provides a strategic overview. Specific rules and risks vary by country and individual circumstances. Sources:

5. Country-by-Country Deep Dives

This section provides a detailed analysis of the tax and residency landscape in every EU and EEA country, plus Switzerland. Each country is presented in a standardised format to allow for direct comparison. All tax rates and figures are for the 2025 tax year unless otherwise stated.

5.1. Austria

5.1.1. Residency Rules & Special Regimes

• Standard Residency Test: An individual is considered a tax resident in Austria if they establish an "abode" (a dwelling used with the intention to stay) or if they are physically present in the country for more than six months (183 days) in a calendar year. Nationality is not a primary criterion but can be an indicator in cases of doubt.
• Special Regimes: Austria does not offer a broad special tax regime for expatriates comparable to those in Spain or Italy. Taxation is generally based on the standard progressive rates for all residents.

5.1.2. Headline Taxes (2025)

• Personal Income Tax (PIT): Residents are taxed on their worldwide income. Austria applies a progressive tax scale. For 2025, the income tax brackets have been adjusted for inflation.
  • Up to €13,308: 0%
  • €13,309 to €21,617: 20%
  • €21,618 to €35,836: 30%
  • €35,837 to €69,166: 40%
  • €69,167 to €103,072: 48%
  • €103,073 to €1,000,000: 50%
  • Above €1,000,000: 55% (this top rate is temporary and scheduled to revert to 50% after 2025).
• Capital Gains & Dividend Tax: Gains from the sale of securities and dividend income are typically subject to a special flat tax rate of 27.5%. Interest from bank deposits is taxed at 25%.
• Wealth Tax: Austria does not levy a net wealth tax.
• Inheritance & Gift Tax: Austria abolished its inheritance and gift tax in 2008. However, a real estate transfer tax applies to gratuitous transfers of property, and certain gifts must be reported to the tax authorities.

5.1.3. Social Security & Healthcare

• Social Security Contributions: Contributions are mandatory for employees and cover pensions, health, unemployment, and accident insurance. The total employee contribution is approximately 18.12% of gross salary, capped at a monthly assessment ceiling of €6,330 for 2025. The employer's contribution is approximately 21.03%.
• Healthcare Access: The public healthcare system is funded by social security contributions and provides high-quality care to all residents. UK citizens moving to Austria must register with the Austrian Health Insurance Fund (Österreichische Gesundheitskasse, ÖGK). An S1 form can be used by UK state pensioners to access state healthcare. A UK-issued GHIC covers temporary stays.

5.1.4. Housing: Buy vs. Rent Taxes & Costs

• Purchase Costs:
  • Real Estate Transfer Tax (Grunderwerbsteuer): A standard rate of 3.5% of the purchase price.
  • Registration Fee: 1.1% for registering the title in the land register.
  • Other Costs: Notary fees (approx. 1-3% + VAT), legal fees, and real estate agent commission (typically 3% + VAT) bring total acquisition costs to around 10-11% of the property value.
• Annual Ownership Costs:
  • Property Tax (Grundsteuer): A local tax based on an assessed value of the property, which is typically much lower than the market value. The amount is generally modest.
  • Imputed Rental Income: Austria does not tax imputed rental income for an owner-occupied main residence.

5.1.5. UK-Austria Double Taxation Treaty

The UK-Austria DTT ensures that income is not taxed twice. Key provisions include:

• Pensions: Private and state pensions are generally taxable only in the country of residence (Austria).
• Government Service Pensions: Taxable only in the source country (UK), unless the recipient is a national and resident of Austria.
• Rental Income: Income from UK property remains taxable in the UK, with a credit provided against Austrian tax due.

5.1.6. Remote Work & Business Considerations

• Permanent Establishment (PE) Risk: A home office used regularly and continuously for the business of a foreign employer can create a PE in Austria, especially if the employer has no other office in the country. This would subject the employer's profits attributable to the Austrian operations to Austrian corporate tax.
• Self-Employment: Operating as a self-employed individual (selbständig) requires registration with the Social Insurance Institution for the Self-Employed (SVS) and the tax office.

5.1.7. Illustrative Case Studies

• Employee: A UK citizen moving to Vienna with a salary of €80,000 will pay progressive income tax and social security contributions. Their marginal tax rate will be 48%. They will have access to public healthcare via their social security payments.
• Retiree: A UK state pensioner retiring to Salzburg will register their S1 form to access Austrian healthcare. Their UK pension will be taxed in Austria at progressive rates, after applying personal allowances.

5.1.8. Pros & Cons Summary

• Pros: High quality of life, excellent public services and healthcare, no general wealth or inheritance tax.
• Cons: High income tax and social security rates, significant property purchase costs, limited special tax regimes for expats.

Tax Overview Table: Austria (2025)

Property Cost Table: Austria (2025)

Residency & Visas/Work Permits: Austria (for UK Citizens)

Social Security & Healthcare Snapshot: Austria (2025)

5.2. Belgium

5.2.1. Residency Rules & Special Regimes

• Standard Residency Test: An individual is considered a tax resident if their main home or "seat of wealth" (centre of economic interests) is in Belgium. Registration in the national population register creates a rebuttable presumption of tax residency.
• Special Regime for Inbound Taxpayers & Researchers: Belgium offers a special tax regime for qualifying expatriates and researchers, which was significantly reformed from 1 January 2022.
  • Benefits: Eligible individuals can benefit from a tax-free expense reimbursement equal to 30% of their gross annual taxable income, capped at €90,000 per year. Certain other costs like school fees and moving expenses can also be reimbursed tax-free.
  • Eligibility: The individual must not have been a Belgian tax resident, lived within 150km of the Belgian border, or been subject to Belgian non-resident tax on professional income in the 60 months prior to arrival. A minimum gross annual salary of €75,000 is required for executives (this does not apply to researchers). The regime is available for 5 years, with a possible 3-year extension. As of 2025, the salary threshold is set to be reduced to €70,000, and the 30% allowance may increase to 35% with the cap removed, pending final legislation.

5.2.2. Headline Taxes (2025)

• Personal Income Tax (PIT): Residents are taxed on their worldwide income. Belgium has one of the highest tax burdens in Europe. The federal tax rates for the 2025 income year are progressive :
  • Up to €16,320: 25%
  • €16,321 to €28,800: 40%
  • €28,801 to €49,840: 45%
  • Above €49,840: 50%
  • Municipal Surcharges: On top of the federal tax, municipalities levy a surcharge, typically averaging 7% of the federal tax due. This brings the effective top marginal rate to approximately 53.5%.
• Capital Gains Tax: Capital gains on shares realised by individuals as part of the normal management of their private estate are generally tax-exempt. However, gains on real estate sold within five years of acquisition are taxed at 16.5%. A new 10% tax on capital gains from financial assets is under discussion for introduction in 2026.
• Dividend Tax: A flat withholding tax of 30% applies to most dividend and interest income.
• Wealth Tax: There is no general net wealth tax. However, an annual tax of 0.15% is levied on the value of securities accounts that exceed €1 million.
• Inheritance & Gift Tax: This is a regional tax with different rates in Flanders, Wallonia, and the Brussels-Capital Region. Rates are progressive and depend on the value of the inheritance and the relationship to the deceased. Direct descendants and spouses face rates up to 27% (Flanders) or 30% (Brussels/Wallonia), while unrelated beneficiaries can face rates up to 80%.

5.2.3. Social Security & Healthcare

• Social Security Contributions: Employee contributions are high, at a flat rate of 13.07% of gross salary with no cap. Employer contributions are approximately 27%.
• Healthcare Access: The healthcare system is funded by mandatory social security contributions. Residents must register with a health insurance fund (mutuelle/ziekenfonds). The system is a reimbursement model; patients typically pay for services upfront and are reimbursed for a significant portion (e.g., 75-80%) by their insurance fund. A UK GHIC covers temporary stays, and an S1 form can be used by UK state pensioners.

5.2.4. Housing: Buy vs. Rent Taxes & Costs

• Purchase Costs: Property transfer tax (droits d'enregistrement/registratierechten) is a regional responsibility with significant variations.
  • Flanders: The standard rate is 12%. For a sole, primary residence, the rate is 3%, reducing to 2% from 1 January 2025.
  • Wallonia: The standard rate is 12.5%. For a sole, primary residence, this will be reduced to 3% from 1 January 2025, but existing deductions will be abolished.
  • Brussels: The standard rate is 12.5%, with a tax-free allowance (abattement) of €200,000 on the purchase of a sole, primary residence.
  • Total Costs: Including notary fees and other charges, total acquisition costs are typically 15-16% in Brussels and Wallonia, and 5-6% in Flanders for a primary home.
• Annual Ownership Costs:
  • Property Tax (Précompte immobilier/Onroerende voorheffing): An annual tax based on the notional rental value (revenu cadastral/kadastraal inkomen) of the property. The amount varies significantly by region and municipality.

5.2.5. UK-Belgium Double Taxation Treaty

The treaty prevents double taxation. Key points include:

• Pensions: Private and state pensions are taxable only in the country of residence (Belgium).
• Government Service Pensions: Taxable only in the source country (UK), unless the recipient is a national and resident of Belgium.
• Rental Income: UK rental income is taxable in the UK. It is exempt from tax in Belgium but is included to determine the progressive tax rate applicable to other Belgian-source income (exemption with progression).

5.2.6. Remote Work & Business Considerations

• Permanent Establishment (PE) Risk: A fixed home office in Belgium used for the business activities of a foreign employer can create a PE, subjecting the employer's profits to Belgian corporate tax.
• Director/Founder Risk: A UK company director residing and managing the company from Belgium risks shifting the company's tax residency to Belgium under the "place of effective management" test.

5.2.7. Illustrative Case Studies

• Employee: A UK national seconded to Brussels by a multinational, earning €120,000. Under the impatriate regime, they receive a tax-free allowance of 30% (€36,000). The remaining €84,000 is taxed at progressive rates. They pay 13.07% social security on the full €120,000.
• Retiree: A UK couple retiring to Flanders. Their UK private pensions are taxed in Belgium. They purchase a home and pay the 3% (2% from 2025) registration tax. Their worldwide assets are not subject to a general wealth tax, but their securities portfolio over €1 million is subject to the 0.15% tax.

5.2.8. Pros & Cons Summary

• Pros: Excellent location in the heart of Europe, attractive impatriate tax regime for qualifying individuals, capital gains on shares are often tax-free.
• Cons: Very high personal income tax and social security rates for those not on the special regime, complex regional differences in property and inheritance tax, high property transaction costs outside Flanders.

Tax Overview Table: Belgium (2025)

Property Cost Table: Belgium (2025)

Residency & Visas/Work Permits: Belgium (for UK Citizens)

Social Security & Healthcare Snapshot: Belgium (2025)

5.3. Bulgaria

5.3.1. Residency Rules & Special Regimes

• Standard Residency Test: An individual is a Bulgarian tax resident if they have a permanent address in Bulgaria (and their centre of vital interests is in Bulgaria), reside in the country for more than 183 days in any 12-month period, or have their centre of vital interests in Bulgaria.
• Special Regimes: Bulgaria does not have specific tax regimes for expatriates; its main attraction is its low, flat tax rate which applies to all residents.

5.3.2. Headline Taxes (2025)

• Personal Income Tax (PIT): Bulgaria has one of the simplest and most attractive tax systems in the EU. A flat tax rate of 10% applies to almost all types of personal income, including employment, self-employment, rental, and capital gains income.
• Capital Gains Tax: Taxed at the flat 10% rate. However, gains from the sale of one residential property per year (if owned for more than three years) and up to two other properties (if owned for more than five years) are tax-exempt. Gains from shares traded on an EU/EEA regulated stock market are also exempt.
• Dividend Tax: A final withholding tax of 5% applies to dividends paid by Bulgarian resident companies to individuals. Dividends received from EU/EEA companies are not taxed in Bulgaria.
• Wealth Tax: There is no net wealth tax in Bulgaria.
• Inheritance & Gift Tax: Inheritance tax is levied on Bulgarian and foreign citizens. Spouses and direct-line relatives are exempt. Siblings and their children pay rates from 0.4% to 0.8%, while all other beneficiaries pay 3.3% to 6.6%. Gift tax follows similar principles.

5.3.3. Social Security & Healthcare

• Social Security Contributions: The total contribution is 33.4%, split between the employer (19.62%) and the employee (13.78%). Contributions are capped on a maximum monthly income of BGN 3,750 (approx. €1,917) for 2025.
• Healthcare Access: The public healthcare system is funded by mandatory health insurance contributions, which are part of the overall social security payments. All residents, including registered UK citizens, are entitled to access the public system.

5.3.4. Housing: Buy vs. Rent Taxes & Costs

• Purchase Costs:
  • Property Transfer Tax: A local tax levied by municipalities, with rates ranging from 0.1% to 3% of the higher of the purchase price or the tax-assessed value.
  • Other Costs: Notary fees are capped and based on the property value. A land registry fee of 0.1% also applies. Total transaction costs are relatively low, typically in the range of 2-5%.
• Annual Ownership Costs:
  • Real Estate Tax: An annual municipal tax with rates between 0.01% and 0.45% of the property's tax assessed value.
  • Garbage Collection Fee: A separate municipal fee, which can be significant in some areas.

5.3.5. UK-Bulgaria Double Taxation Treaty

The treaty ensures income is taxed appropriately.

• Pensions: Private and state pensions are generally taxable only in Bulgaria.
• Government Service Pensions: Taxable only in the UK, unless the recipient is a Bulgarian national and resident.
• Rental Income: UK rental income is taxable in the UK, with a credit available against the 10% Bulgarian tax.

5.3.6. Remote Work & Business Considerations

• Permanent Establishment (PE) Risk: A home office in Bulgaria could create a PE for a foreign employer if it is used on a continuous basis for the employer's business, potentially exposing the employer to Bulgaria's 10% corporate income tax.
• Self-Employment: Registering as a freelancer is a common and straightforward option, with income taxed at the 10% flat rate after a 25% statutory deduction for expenses.

5.3.7. Illustrative Case Studies

• Remote Worker: A UK citizen working remotely for a UK company from Sofia. They pay a flat 10% tax on their salary and 13.78% social security (up to the cap). Careful management is needed to avoid creating a PE for their UK employer.
• Retiree: A UK pensioner moving to a rural Bulgarian village. Their UK pensions are taxed at 10% in Bulgaria. They purchase a property with very low transaction and annual property taxes.

5.3.8. Pros & Cons Summary

• Pros: Very low flat tax rate of 10% on income, 5% on dividends. Low property and transaction taxes. Low cost of living. Exemptions for capital gains on property and EU-listed shares.
• Cons: Social security contributions are relatively high on income up to the cap. Bureaucracy can be challenging. The public healthcare system may not be of the standard some expatriates are used to.

Tax Overview Table: Bulgaria (2025)

Property Cost Table: Bulgaria (2025)

Residency & Visas/Work Permits: Bulgaria (for UK Citizens)

Social Security & Healthcare Snapshot: Bulgaria (2025)

5.4. Croatia

5.4.1. Residency Rules & Special Regimes

• Standard Residency Test: An individual is a Croatian tax resident if they have real estate at their disposal for an uninterrupted period of at least 183 days, or if they are physically present for at least 183 days in one or two calendar years. If an individual has homes in both Croatia and another country, residency is determined by where their family resides or their centre of vital interests lies.
• Special Regimes: From 1 January 2025, a new tax incentive for "returnees" has been introduced. Croatian citizens who have lived abroad for at least two years can receive a 100% tax relief on their employment income for a period of five years upon returning.

5.4.2. Headline Taxes (2025)

• Personal Income Tax (PIT): Residents are taxed on their worldwide income. From 2025, the system has been reformed, giving municipalities the power to set their own rates within specified ranges.
  • Lower Rate: Ranges from 15% to 23% (previously a flat 20%).
  • Higher Rate: Ranges from 25% to 33% (previously a flat 30%).
  • Income Threshold: The threshold for applying the higher rate has been increased from €50,400 to €60,000.
  • If a municipality does not set its own rates, default rates of 20% and 30% apply.
• Capital Gains Tax: Capital gains from the sale of financial assets (e.g., shares) held for less than two years are taxed as investment income at a rate of 10% plus local surcharges. Gains on assets held for more than two years are exempt.
• Dividend Tax: Dividend income is taxed at a rate of 10% plus local surcharges.
• Wealth Tax: There is no net wealth tax in Croatia.
• Inheritance & Gift Tax: A flat rate of 3% applies to inheritances and gifts. However, spouses, direct descendants and ascendants, and other close relatives are exempt.

5.4.3. Social Security & Healthcare

• Social Security Contributions: Contributions are levied on gross salary for pension insurance. The employee pays 20% (split between two 'pillars' of the pension system). There is no employee contribution for health or unemployment insurance. Employer contributions for health insurance are 16.5%.
• Healthcare Access: The public healthcare system (HZZO) is funded by employer contributions and provides universal coverage for residents. UK citizens must register with HZZO upon becoming resident. S1 forms and GHICs are applicable for pensioners and temporary visitors, respectively.

5.4.4. Housing: Buy vs. Rent Taxes & Costs

• Purchase Costs:
  • Real Estate Transfer Tax: A flat rate of 3% is levied on the market value of resale properties.
  • VAT (PDV): New builds are subject to VAT at 25%, which is included in the purchase price. In this case, no transfer tax is due.
  • Other Costs: Legal and agent fees typically add another 2-4% to the total cost.
• Annual Ownership Costs:
  • Property Tax: There is no recurrent annual property tax based on value. However, owners of holiday homes (properties not used as a main residence) pay a municipal tax, typically ranging from €0.66 to €1.99 per square metre per year.

5.4.5. UK-Croatia Double Taxation Treaty

The treaty, effective from 2016, follows the OECD model.

• Pensions: Private and state pensions are generally taxable only in Croatia.
• Government Service Pensions: Taxable only in the UK, unless the recipient is a Croatian national and resident.
• Rental Income: UK property rental income is taxed in the UK, with Croatia providing a credit to relieve double taxation.

5.4.6. Remote Work & Business Considerations

• Digital Nomad Visa: Croatia offers a specific visa for digital nomads (non-EU/EEA citizens working remotely for a foreign company). A key benefit is that income earned under this visa is exempt from Croatian income tax.
• Permanent Establishment (PE) Risk: For those not on a digital nomad visa, a home office could create a PE for a foreign employer, leading to corporate tax obligations in Croatia.

5.4.7. Illustrative Case Studies

• Digital Nomad: A UK freelance software developer obtains a Croatian digital nomad visa. Their income from UK clients is not subject to Croatian income tax for the duration of the visa. They are not required to pay Croatian social security if they can prove coverage elsewhere (e.g., via voluntary UK National Insurance contributions).
• Employee: A UK citizen moves to Zagreb to work for a Croatian company, earning €70,000. They will pay income tax at the local progressive rates (e.g., 20% up to €60,000 and 30% on the excess, plus any municipal surtax) and 20% pension contributions.

5.4.8. Pros & Cons Summary

• Pros: Attractive digital nomad visa with tax exemption, no annual property tax on main residences, capital gains on financial assets exempt after two years, low inheritance tax with broad exemptions.
• Cons: Relatively high social security contributions for employees, income tax rates can be high depending on the municipality, bureaucracy can be slow.

Tax Overview Table: Croatia (2025)

Property Cost Table: Croatia (2025)

Residency & Visas/Work Permits: Croatia (for UK Citizens)

Social Security & Healthcare Snapshot: Croatia (2025)

5.5. Cyprus

5.5.1. Residency Rules & Special Regimes

• Standard Residency Test (183-Day Rule): An individual who spends more than 183 days in Cyprus in a calendar year is a Cyprus tax resident.
• 60-Day Rule: An individual can become a tax resident by spending just 60 days in Cyprus if they are not a tax resident elsewhere, do not spend more than 183 days in any other single country, maintain a permanent home in Cyprus, and carry on a business or are employed in Cyprus.
• Special Regime: Non-Domicile Status: This is a highly attractive regime for foreigners moving to Cyprus. An individual who is a Cyprus tax resident but is not domiciled in Cyprus is exempt from the Special Defence Contribution (SDC) tax. This means worldwide dividend and interest income is completely tax-free in Cyprus for non-domiciled residents. This status can be maintained for up to 17 years.
• Special Regime for Employment Income: There are two key exemptions for individuals taking up employment in Cyprus:
  • 50% Exemption: 50% of the remuneration from employment in Cyprus is exempt from income tax for 17 years for individuals with annual remuneration over €55,000 who were not resident in Cyprus for at least 10 consecutive years prior to their employment.
  • 20% Exemption: For individuals with remuneration below €55,000, there is an exemption of 20% of their employment income (capped at €8,550 per year) for up to 7 years.

5.5.2. Headline Taxes (2025)

• Personal Income Tax (PIT): Residents are taxed on their worldwide income. The rates are progressive. A tax reform proposal for 2025 aims to increase the tax-free threshold and adjust the brackets.
  • Up to €19,500: 0%
  • €19,501 to €28,000: 20%
  • €28,001 to €36,300: 25%
  • €36,301 to €60,000: 30%
  • Above €60,000: 35%.
• Special Defence Contribution (SDC): This tax applies to dividend, interest, and rental income for individuals who are both resident and domiciled in Cyprus. The rates are 17% for dividends, 30% for interest (reduced to 3% on bank deposit interest), and 3% on 75% of gross rental income. Non-domiciled residents are exempt.
• Capital Gains Tax: A 20% tax is levied on gains from the disposal of immovable property located in Cyprus and shares of companies that own such property. Gains from the sale of other securities, such as shares listed on a recognised stock exchange, are exempt.
• Dividend Tax: For non-domiciled residents, there is no tax on dividends. For domiciled residents, dividends are subject to SDC at 17%.
• Wealth Tax: There is no net wealth tax in Cyprus.
• Inheritance & Gift Tax: There is no inheritance or gift tax in Cyprus.

5.5.3. Social Security & Healthcare

• Social Security Contributions: The employee contribution is 8.8% of gross salary, and the employer contributes 12.1%. Contributions are capped on an annual salary of €62,868 for 2025.
• Healthcare Access (GESY): The General Healthcare System (GESY) provides universal coverage to all residents. It is funded by contributions from individuals, employers, and the state. The employee contribution is 2.65% of their gross earnings, also capped at the social security ceiling.

5.5.4. Housing: Buy vs. Rent Taxes & Costs

• Purchase Costs:
  • VAT (ΦΠΑ): New properties are subject to VAT at the standard rate of 19%. A reduced rate of 5% may apply to the first 130 sq.m. of a primary residence (up to a value of €350,000).
  • Property Transfer Fees: For resale properties, transfer fees are levied on a progressive scale from 3% to 8% of the property's market value. However, these fees are currently reduced by 50%, and no fees are payable if the transaction is subject to VAT.
  • Stamp Duty: A small stamp duty is payable on the purchase contract, with rates up to 0.2%.
• Annual Ownership Costs:
  • Immovable Property Tax: This was abolished in 2017.
  • Local Authority Fees: Municipalities charge annual fees for services like refuse collection, which are generally very low.

5.5.5. UK-Cyprus Double Taxation Treaty

The treaty is comprehensive and ensures income is not taxed in both countries.

• Pensions: Private and state pensions are generally taxable only in Cyprus.
• Government Service Pensions: Taxable only in the UK, unless the recipient is a Cypriot national and resident.
• Rental Income: UK rental income is taxable in the UK, with Cyprus providing a tax credit.

5.5.6. Remote Work & Business Considerations

• Digital Nomad Visa: Cyprus offers a digital nomad visa for non-EU nationals working for employers outside Cyprus. While it facilitates residency, it does not come with specific tax breaks beyond the standard Cypriot tax system.
• Permanent Establishment (PE) Risk: A remote worker in Cyprus could create a PE for their foreign employer, potentially subjecting the company's profits to Cyprus's 12.5% corporate tax rate.
• Company Formation: Cyprus is a popular jurisdiction for holding companies due to its 12.5% corporate tax rate and favourable tax treatment of dividends and capital gains on securities.

5.5.7. Illustrative Case Studies

• HNWI: A UK entrepreneur becomes a Cyprus tax resident and obtains non-domicile status. They receive €200,000 in dividends from their UK company, which are received completely tax-free in Cyprus. Their worldwide assets are not subject to wealth or inheritance tax.
• Employee: A UK citizen is hired by a Cypriot tech company with a salary of €80,000. They benefit from the 50% income exemption, meaning only €40,000 is taxable, resulting in a significantly lower tax bill.

5.5.8. Pros & Cons Summary

• Pros: Highly attractive non-domicile regime making dividends and interest tax-free. Generous exemptions for employment income. No inheritance or wealth tax. Low property taxes.
• Cons: SDC rates are high for domiciled residents. Capital gains tax on Cypriot real estate. The cost of living in some coastal areas can be high.

Tax Overview Table: Cyprus (2025)

Property Cost Table: Cyprus (2025)

Residency & Visas/Work Permits: Cyprus (for UK Citizens)

Social Security & Healthcare Snapshot: Cyprus (2025)

5.6. Czech Republic

5.6.1. Residency Rules & Special Regimes

• Standard Residency Test: An individual is a Czech tax resident if they have a permanent home in the Czech Republic (an owned or rented residence with the intention to live there permanently) or if they are present in the country for 183 or more days in a calendar year.
• Special Regimes: The Czech Republic does not offer significant special tax regimes for general expatriates. The tax system is relatively straightforward, with two progressive rates applying to most income types.

5.6.2. Headline Taxes (2025)

• Personal Income Tax (PIT): Residents are taxed on their worldwide income. The Czech Republic applies a two-bracket progressive system.
  • Basic Rate: 15% on annual gross income up to CZK 1,676,052 (approximately €67,000).
  • Higher Rate: 23% on annual gross income exceeding this threshold.
• Capital Gains Tax: Gains from the sale of securities are generally taxed as other income at the progressive rates of 15% or 23%. However, gains are exempt from tax if the securities have been held for more than three years. From 2025, this exemption will be capped at a maximum annual sales price of CZK 40 million.
• Dividend Tax: Dividends received from Czech companies and most foreign companies are subject to a final withholding tax of 15%.
• Wealth Tax: There is no net wealth tax in the Czech Republic.
• Inheritance & Gift Tax: Inheritance and gift tax has been abolished. Gratuitous transfers to relatives and persons living in a common household are exempt from income tax. Gifts to others may be subject to income tax at the 15% rate.

5.6.3. Social Security & Healthcare

• Social Security Contributions: The employee contributes 7.1% (6.5% for pension, 0.6% for sickness) and the employer contributes 24.8% of the gross salary. There is an annual cap on contributions, which is CZK 2,110,416 for 2025.
• Healthcare Access: Health insurance is mandatory for all residents. The employee contributes 4.5% and the employer 9% of the gross salary, with no income cap. The public system provides comprehensive care.

5.6.4. Housing: Buy vs. Rent Taxes & Costs

• Purchase Costs:
  • Real Estate Transfer Tax: This tax was abolished in 2020, making property purchases more attractive.
  • VAT (DPH): New residential properties are subject to a reduced VAT rate of 12%.
  • Other Costs: Legal, notary, and land registry fees are relatively low, typically totalling 1-2% of the purchase price.
• Annual Ownership Costs:
  • Real Estate Tax: An annual tax is levied by municipalities based on the area and location of the property. The amounts are generally very low compared to other European countries.

5.6.5. UK-Czech Republic Double Taxation Treaty

The treaty prevents double taxation in line with OECD standards.

• Pensions: Private and state pensions are generally taxable only in the Czech Republic.
• Government Service Pensions: Taxable only in the UK, unless the recipient is a Czech national and resident.
• Rental Income: UK rental income is taxable in the UK, with a credit available in the Czech Republic.

5.6.6. Remote Work & Business Considerations

• Digital Nomad Visa: The Czech Republic offers a "zivno" visa for freelancers and a digital nomad program, which allows remote workers to reside and work in the country. Income is taxed under the standard self-employment rules.
• Permanent Establishment (PE) Risk: A home office used for the business of a foreign employer could create a PE, especially if used on a long-term, continuous basis.

5.6.7. Illustrative Case Studies

• IT Contractor: A UK citizen moves to Prague on a "zivno" visa. They can opt for a lump-sum expense deduction (typically 60% of revenue for most trades, up to a cap), significantly reducing their taxable income, which is then taxed at 15%. They are responsible for their own social security and health insurance payments.
• Employee: A UK national is hired by a Czech company in Brno with a salary of €80,000 (approx. CZK 2,000,000). Their income exceeds the first tax bracket, so they will pay 15% on the first CZK 1,676,052 and 23% on the remainder.

5.6.8. Pros & Cons Summary

• Pros: Relatively low income tax rates, no property transfer tax, capital gains on shares are exempt after three years (subject to new cap), no inheritance or wealth tax, low cost of living.
• Cons: High social security and health insurance contributions for employers, the 23% tax rate kicks in at a relatively moderate income level for high earners.

Tax Overview Table: Czech Republic (2025)

Property Cost Table: Czech Republic (2025)

Residency & Visas/Work Permits: Czech Republic (for UK Citizens)

Social Security & Healthcare Snapshot: Czech Republic (2025)

5.7. Denmark

5.7.1. Residency Rules & Special Regimes

• Standard Residency Test: An individual becomes a tax resident if they acquire an accommodation in Denmark or stay in the country for a continuous period of at least six months. Full tax liability means being taxed on worldwide income.
• Special Expatriate Tax Regime (Forskerordningen): This highly advantageous regime is available for qualifying foreign researchers and highly-paid employees.
  • Benefits: Allows the individual to be taxed at a flat rate of 27% on their gross salary, plus an 8% labour market contribution, for a total effective rate of 32.84%, for up to seven years (84 months). No other deductions are permitted against this income.
  • Eligibility (2025): The key condition for employees is a minimum average monthly salary of DKK 78,000 before employee pension contributions. This salary requirement is set to be lowered to DKK 63,000 (in 2025 terms) from 2026, broadening the regime's appeal.

5.7.2. Headline Taxes (2025)

• Personal Income Tax (PIT): Denmark has one of the highest tax burdens in the world. The system is complex, combining state taxes, municipal taxes, and a labour market tax. The total marginal rate cannot exceed 52.07% (excluding labour market tax and church tax).
  • Labour Market Tax (AM-bidrag): A flat 8% tax on gross employment income.
  • Municipal Tax (Kommuneskat): A flat rate that varies by municipality, with a national average of 25.068%.
  • State Taxes:
    • Bottom Tax (Bundskat): 12.01% on personal income.
    • Top Tax (Topskat): 15% on personal income exceeding DKK 611,800 (after deducting the 8% labour market tax).
• Capital Gains & Dividend Tax: Share income (dividends and capital gains on shares) is taxed at 27% on amounts up to DKK 67,500 (DKK 135,000 for a married couple) and at 42% on amounts above this threshold.
• Wealth Tax: There is no net wealth tax in Denmark.
• Inheritance & Gift Tax: A flat 15% inheritance tax applies to assets passing to close family (spouses are exempt). An additional 25% tax applies if assets pass to more distant relatives or non-relatives. Gift tax follows similar principles.

5.7.3. Social Security & Healthcare

• Social Security Contributions: The Danish system is primarily tax-funded. Employee social security contributions are very low, consisting mainly of the mandatory ATP pension contribution of DKK 1,188 per year. The 8% labour market tax also funds social schemes.
• Healthcare Access: The public healthcare system is of a very high standard and is available to all residents free at the point of use. It is funded through