Retiring abroad offers the exciting opportunity to embrace a new lifestyle, explore different cultures, and enjoy breath taking landscapes. However, before packing your bags, it’s essential to consider the logistics of relocating, especially when it comes to tax benefits and the ease of the relocation process.
For those wondering where to retire abroad, or indeed how to retire abroad, it's important to choose a country that not only offers an appealing environment but also has favourable tax laws and a smooth residency process. Navigating the complexities of international tax systems, visa requirements, and the bureaucratic hurdles of moving to another country can feel overwhelming.
To make the decision easier, we’ve put together a guide to the best five countries to retire abroad, focusing on nations that simplify the process and offer significant tax advantages, ensuring that your retirement years are stress-free and financially beneficial. So, here’s how to retire abroad and where!
Your pre-departure checklist for retiring abroad
Before we dive into the best countries for retirement, let’s first walk you through an essential pre-departure checklist to ensure a smooth transition. Moving abroad is an exciting step, but how do you retire abroad? Proper planning is key to avoiding unexpected hurdles. From sorting out visas and healthcare to understanding tax obligations and financial planning, there are several important factors to consider before making the big move. Taking the time to prepare thoroughly will help you settle into your new home with confidence and peace of mind. So, before we reveal the top destinations, let’s go over everything you need to check off your list before embarking on your retirement adventure.
Visa and residency requirements
Understanding the visa and residency rules of your chosen country is crucial. If you’re moving for work, your employer may assist with this process. However, if you’re retiring abroad or relocating independently, you’ll likely need to navigate the legal complexities yourself. In such cases, seeking professional assistance can make the process much smoother. Research the visa types available to retirees, the financial requirements, and whether your chosen country offers a straightforward path to permanent residency or citizenship.
Understanding tax laws
Every country has unique tax regulations, and your tax obligations may change significantly after moving abroad. It’s important to understand how your pension, investments, and other sources of income will be taxed in your new home. The UK has Double Taxation Agreements (DTAs) with many countries to prevent you from being taxed twice on the same income. Consulting with an international tax expert can help you optimise your tax position and ensure compliance with both UK and foreign tax laws.
Managing your UK property
If you own property in the UK, consider your options carefully - whether to sell, rent, or retain it as a holiday home. The timing of a sale could impact your Capital Gains Tax (CGT) liability, so seeking advice from tax and real estate professionals is highly recommended. If you choose to rent it out, you may still have UK tax obligations, so be sure to understand the financial implications before making a decision.
Researching your destination
Moving abroad is about more than just finances and legal requirements; it’s about building a new life. Research the local culture, healthcare system, cost of living, and climate to ensure it aligns with your expectations. Engaging with expat communities in your destination can provide valuable insights and help ease your transition into a new environment.
Key financial and tax considerations
Residency and domicile status
Your tax obligations depend not just on where you live but also on your residency and domicile status. Residency for tax purposes isn’t solely based on the number of days you spend in the UK but also on factors like family ties and accommodation arrangements. Meanwhile, domicile refers to your permanent home and affects how certain types of income, such as foreign earnings, are taxed. Understanding these factors is essential to avoid unexpected tax liabilities.
Double taxation relief
If you earn income from both the UK and your new country of residence, you might be subject to double taxation. Fortunately, the UK has DTAs with many countries, allowing for tax exemptions or credits. Familiarising yourself with these agreements will help you avoid paying unnecessary taxes. A tax professional specialising in international taxation can guide you in structuring your finances efficiently.
Capital Gains Tax (CGT) implications
If you plan to sell assets like property or investments before or after your move, understanding Capital Gains Tax rules is crucial. UK residents may qualify for tax reliefs or exemptions on the sale of their main residence, while non-residents might be taxed differently. The timing of your sale and residency status at the time of disposal can significantly impact your tax liability. Consulting a tax expert before making financial decisions can help minimise potential tax burdens.
Inheritance Tax (IHT) considerations
Even after moving abroad, UK Inheritance Tax (IHT) may still apply to your worldwide assets. Many expats assume that leaving the UK removes their IHT obligations, but domicile status plays a major role in determining your exposure to UK IHT. Planning ahead and seeking professional advice can help reduce future tax burdens for your heirs.
Ongoing UK tax reporting obligations
Even if you no longer live in the UK, you may still have to file tax returns if you receive income from UK-based sources, such as rental properties, pensions, or investments. Staying compliant with UK tax laws will prevent unexpected issues in the future. Make sure you are aware of any ongoing tax reporting requirements and deadlines.
Investment and income strategy
Relocating abroad can impact your financial strategy, particularly if you rely on pensions or investment income. Factors like local cost of living, currency exchange rates, and market risks in your new country should all be considered. Fluctuations in exchange rates can significantly impact your purchasing power, so understanding currency risk management is essential. If you plan to work in your new country, be mindful of potential language barriers and employment regulations. Seeking financial advice before your move will help you align your investment and income strategies for long-term stability.
Now that we’ve covered the essential pre-departure checklist, it’s time to dive into the most exciting part - choosing the perfect country for your retirement! With so many incredible destinations around the world, selecting the right place to settle down isn’t just about sunshine and stunning views. The best retirement destinations offer a blend of financial benefits, tax-friendly policies, and an easy residency process, making your transition as seamless as possible.
Whether you’re looking for a low-tax haven, a straightforward visa route, or simply a country with a vibrant expat community and excellent healthcare, there’s a destination to match your lifestyle and financial goals. Some countries offer generous tax incentives for retirees, while others make it incredibly easy to gain long-term residency with minimal hassle.
So, if you’ve been dreaming of spending your golden years by the beach, in a charming European town, or in a culturally rich and affordable paradise, keep reading! We’ve rounded up the top five countries to retire abroad, each offering fantastic benefits for British retirees. Let’s explore the best options and find your ideal retirement destination.
Croatia
Croatia is a hidden gem for retirees looking for an affordable, beautiful, and tax-friendly destination. With its Mediterranean climate, relaxed lifestyle, and easy access to the rest of Europe, it’s no surprise that more and more British retirees are choosing Croatia as their new home.
Firstly, Croatia has a favourable tax system for expats. Croatia does not tax foreign pensions if structured correctly, making it a financially attractive option for British retirees.
The country has a Double Taxation Agreement (DTA) with the UK, ensuring that retirees aren’t taxed twice on their pension or other income sources. It also has one of the lowest financial requirements for visa applicants looking to relocate.
Furthermore, the homeland of Luka Modric offers easy residency for retirees. British retirees can apply for temporary residence, which can be renewed and eventually lead to permanent residency after five years.
The Digital Nomad Visa is also an option for those with remote income, allowing up to a year’s stay with tax exemptions.
Croatia is part of the Schengen Area, making travel across Europe hassle-free for retirees who enjoy exploring.
Additionally, Croatia typically offers a low cost of living. Compared to the UK, Croatia offers a much lower cost of living, especially in smaller towns and inland areas. Rental prices and property costs remain affordable, particularly outside of major tourist hotspots like Dubrovnik and Split. Everyday expenses such as groceries, dining, and utilities are cheaper than in Western Europe, making it easier to enjoy a comfortable retirement.
The country also has high-quality healthcare. Croatia has a well-developed healthcare system, with both public and private medical services available.
Expats can access the public healthcare system by making social security contributions or opt for private health insurance, which is still much more affordable than in many Western countries.
Moreover, who doesn’t want a slice of warm weather? With its Mediterranean climate & stunning scenery, Croatia enjoys mild winters and warm summers, particularly along the Adriatic coast, making it ideal for retirees looking to escape the cold UK weather.
With 1,200+ islands, historic towns, and breathtaking national parks, there’s no shortage of places to explore.
Also, English is also widely spoken. Many Croatians, especially in tourist and expat areas, speak English, making it easier for British retirees to settle in without major language barriers.
Lastly, Croatia is one of the safest countries in Europe, with low crime rates and a strong sense of community.
The Mediterranean way of life encourages a slower pace, with long seaside walks, fresh local food, and plenty of outdoor activities.
Spain
Spain remains one of the top choices for British retirees due to its excellent climate, strong healthcare system, affordable lifestyle, and well-established expat community. With various visa options, easy travel links to the UK, and plenty of beautiful coastal and inland towns to choose from, Spain offers the perfect balance of relaxation and adventure for retirement.
Up first, the homeland of Rafa Nadal has very good tax benefits & residency options. Spain offers a Non-Lucrative Visa (NLV), ideal for retirees with passive income (pensions, savings, or investments). This visa allows long-term residence and can lead to permanent residency.
While Spain does tax worldwide income, the UK-Spain Double Taxation Agreement (DTA) ensures you won’t be taxed twice on your pension or income.
Some regions offer regional tax incentives, particularly in areas with lower living costs.
Espana also offers top-quality healthcare. Spain has one of the best healthcare systems in the world, ranking highly for accessibility and quality.
British retirees can access public healthcare by registering for Spain’s Convenio Especial scheme or via a private health insurance plan. Private healthcare is affordable and efficient, with English-speaking doctors available in expat areas.
At a time when the UK is in a cost-of-living crisis, our Spanish counterparts have an affordable cost of living. Spain offers a lower cost of living compared to the UK, particularly outside major cities.
Rent, groceries, and dining out are significantly cheaper, making it easier to enjoy a high quality of life. Public transport is affordable and reliable, reducing the need for a car in many areas.
Almost 18 million Brits headed to Spain on holiday in 2023, with its warm climate & outdoor lifestyle making it an attractive destination. Spain enjoys over 300 days of sunshine a year, with mild winters and warm summers.
Coastal regions like the Costa del Sol, Costa Blanca, and Costa Brava offer beautiful beaches, scenic landscapes, and an active outdoor lifestyle.
Many towns and cities have vibrant local markets, festivals, and cultural events, making everyday life enjoyable and engaging.
As you can imagine, there is a strong British expat community. Spain has one of the largest British expat communities, particularly in areas like Alicante, Málaga, Valencia, and the Balearic Islands.
English is widely spoken in expat areas, making integration easier. There are British-run businesses, international schools, and expat social groups, helping retirees feel at home.
And speaking of Britain, Spain is just a short flight from the UK, with frequent and affordable flights to major cities. Many retirees appreciate the convenience of being able to visit family and friends in the UK with ease.
Republic of Ireland
Trigger: ‘’I'm gonna live it up a bit. Disco's nightclubs, golden beaches, blue skies!’’ Rodney: ‘’Sounds Great Trig, where'y going?’’ Trigger: ‘’Ireland!’’
I know what you’re thinking - Ireland? That’s not exactly exotic! But stick with me, because there are some great reasons why it might just be the perfect retirement destination.
Ireland offers a wonderful combination of familiarity, ease of relocation, high-quality healthcare, and stunning natural beauty - making it a top choice for British retirees. With its relaxed lifestyle, welcoming people, and proximity to the UK, Ireland allows retirees to enjoy a comfortable and fulfilling life abroad without straying too far from home. You also only need £7,000 in your bank account to gain a visa, making it far more accessible than other destinations.
This may seem very obvious, but there is no language barrier. English is the primary language spoken in Ireland, making it an easy transition for British expats.
The shared language, culture, and history help expats feel more at home and ease any potential language barriers.
On that note, it is also close to home. Ireland is just a short flight from the UK, making it easy to visit family and friends. The proximity allows British retirees to enjoy the benefits of living abroad without being too far from the UK.
There is also a strong expat community, making it easier to integrate into the Irish way of life. Ireland has a welcoming and growing expat community, especially in areas like Dublin, Cork, and Galway.
The country’s warm, friendly people and small-town charm make it easy to integrate and build new social connections. British retirees often find that Ireland offers a sense of familiarity and community, making it easier to adjust.
Ireland also offers fantastic residency and tax benefits. British citizens do not need a visa to retire in Ireland due to the Common Travel Area agreement between the UK and Ireland.
Ireland’s retirement visa options are straightforward, and those wishing to stay long-term can apply for residence permits.
The country has a favourable tax system for expats, with no inheritance tax for non-residents, and it doesn’t tax foreign income for non-domiciled individuals.
While Ireland may be more expensive to live in than the UK, the Emerald Isle offers an affordable cost of living compared to other European destinations, especially outside of major cities like Dublin.
Rent and property prices, as well as daily living expenses, are more reasonable than in many other Western European countries, allowing retirees to live comfortably on a budget.
Ireland also boasts a high standard of healthcare, with both public and private options available. Expats can access the public healthcare system if they become residents, or they can opt for private health insurance for quicker service. The country’s advanced medical facilities and a strong focus on patient care ensure retirees can enjoy peace of mind when it comes to healthcare.
Ireland is not called the Emerald Isle for no reason. The Irish are quite rightly proud of their stunning scenery & relaxed lifestyle. Ireland is famous for its lush green landscapes, charming villages, and rugged coastlines - perfect for retirees looking for natural beauty.
The lifestyle is laid-back and relaxed, offering plenty of outdoor activities like walking, hiking, and coastal exploration. The climate is milder than the UK, with relatively moderate winters and cooler summers, ideal for those who prefer a temperate environment.
Lastly, Ireland presents easy travel within Europe. As part of the EU (even post-Brexit), Ireland offers easy travel access to other European countries, ideal for retirees who want to explore. Frequent flights and ferry connections allow for seamless travel between Ireland and the UK, as well as the rest of Europe.
If you want to learn more about the best countries to retire to as a British expat and the reason behind that, Penfold has put together this handy graph!
Italy
Italy offers a charming mix of culture, natural beauty, and an affordable lifestyle, making it one of the most appealing destinations for British retirees. With its world-class healthcare, relaxed living, and welcoming atmosphere, Italy is an ideal place for those seeking to retire in style and embrace la dolce vita.
Of course, Italy has its beautiful Mediterranean lifestyle & culture. Italia is famous for its relaxed lifestyle, where family, food, and community are at the heart of daily life.
Retiring in Italy means indulging in delicious local cuisine, exploring charming villages, enjoying the arts and culture, and embracing the sunny Mediterranean climate.
Whether you prefer the bustling streets of Rome, the romantic canals of Venice, or the quiet beauty of the Tuscan countryside, there’s a perfect corner of Italy for every retiree.
To make the most of those benefits, they offer favourable residency and visa options. Italy presents several visa options for retirees, with the Elective Residency Visa being one of the most popular for those with sufficient income (pensions or savings) to support themselves without needing to work.
The Elective Residency Visa is ideal for those planning to live off their savings or pension, and once granted, it allows you to stay in Italy for up to two years, after which it can be renewed. After five years of continuous residency, you can apply for permanent residency.
Italy has a tax-friendly approach for foreign income, and as a British retiree, you can benefit from Italy’s tax treaties with the UK, more specifically from the UK-Italy Double Taxation Agreement, which prevents you from being taxed twice on the same income.
There are also tax incentives for retirees who can demonstrate a regular income, such as pensions or dividends, helping to keep your overall tax burden low.
Pension income is often taxed at a lower rate, and Italy offers special tax incentives for retirees who relocate to southern regions (such as Sicily and Calabria), which can reduce tax liability significantly.
Expats who are considered non-residents for tax purposes (e.g., if they spend less than 183 days a year in Italy) may benefit from a more favourable tax treatment of foreign income.
Italy is renowned for its universal healthcare system, ranked among the best in the world. Retirees can access Italy’s public healthcare system by registering with the Italian health service (SSN), or they can opt for private health insurance for faster services. Healthcare costs are often significantly lower than in the UK, and medical standards are extremely high, particularly in larger cities.
While major cities like Rome, Milan, and Florence can be expensive, Italy offers affordable living options in smaller towns and rural areas.
Property prices, food, and daily expenses are often much more affordable than in many Western European countries. Italy’s regional variation allows retirees to choose between the charm of the countryside, the seaside, or the buzz of city life - all without breaking the bank.
As touched upon, Italy boasts a mild Mediterranean climate, with warm summers and mild winters, particularly along the coast. The country is home to some of the most breathtaking landscapes in Europe - rolling hills of Tuscany, the dramatic Amalfi Coast, charming lakes like Lake Como, and endless vineyards and olive groves.
The climate is perfect for retirees who enjoy outdoor activities such as hiking, cycling, or simply soaking in the sun.
Italy is also famed for its rich history and cultural heritage. Retiring in Italia means living amidst history, art, and culture. From the ancient ruins of Rome to the art galleries of Florence and the wine estates of Tuscany, Italy is a living museum.
Expats can easily immerse themselves in a country that celebrates its heritage, with plenty of festivals, museums, theatres, and a deep sense of pride in its traditions.
If you are nervous of starting afresh in a new country, Italy has a strong expat community, especially in areas like Tuscany, Rome, Milan, and Sicily.
Many expats are drawn to the relaxed lifestyle and ease of integration in Italy. English is widely spoken in popular expat areas, making it easier for British retirees to feel at home. There are also many British-run businesses, social clubs, and expat networks, helping newcomers build connections and settle in.
Furthermore, Italy’s central location in Europe makes it an ideal base for traveling across the continent. You’ll have easy access to the rest of Europe with short flights or train journeys, from the Alps to the Mediterranean coast. Plus, if you miss home, the UK is just a 2-hour flight away, making it convenient to visit friends and family.
Greece
Greece offers the perfect combination of affordable living, sunny weather, rich culture, and beneficial residency and tax policies, making it an ideal destination for British retirees. The Golden Visa, low-income tax rates, and the flat 7% tax on foreign pensions for qualifying retirees make it an even more attractive option. Whether you prefer a relaxed life on the Greek islands or a vibrant experience in cities like Athens, Greece has something for every retiree.
Much like Spain and Italy, Greece’s Mediterranean climate makes it a perfect place for retirees who enjoy sunny weather year-round.
The country enjoys hot summers and mild winters, particularly along the coast, where temperatures are ideal for enjoying outdoor activities like walking, cycling, or simply relaxing by the beach.
Areas like Crete, the Peloponnese, and the Greek islands offer a more tranquil pace of life with stunning beaches and picturesque landscapes, making it perfect for those seeking a peaceful retirement.
There is also an affordable cost of living. The cost of living in Greece is generally much lower than in the UK, particularly in rural areas and smaller towns.
Groceries, dining out, and transportation are far more affordable, and you can live comfortably without breaking the bank. Property prices in places like Crete, Corfu, and Pelion are still relatively low compared to other European destinations, giving retirees the chance to purchase a home or apartment by the sea for a fraction of the price they'd pay in the UK or other European countries.
Healthcare is also excellent. Greece offers tremendous healthcare, both public and private. EU citizens, including British retirees, can access the national health service (EOPYY) by registering with the local healthcare system. However, many expats choose to opt for private health insurance for quicker access to treatment.
Healthcare services in major cities like Athens and Thessaloniki are top-notch, and in the islands, private clinics can also provide high standards of care at lower costs than in the UK.
If you are looking for a relaxed lifestyle and culture, the homeland of Olympiacos and Nottingham Forest owner Evangelos Marinakis is for you!
Greece is famous for its laid-back lifestyle, where family and community are at the heart of everyday life.
The Greek way of life revolves around good food, good company, and enjoying life - whether that means having a meal with friends or taking a stroll through ancient ruins.
The country’s cultural richness offers endless opportunities to explore, from historic ruins in Athens and Delphi to charming villages and lively festivals in the islands. If you love nature, Greece has an abundance of hiking trails, beaches, and beautiful landscapes to explore.
Greece also has favourable residency and visa options. Greece offers a number of residency options for retirees, with the Golden Visa being one of the most attractive.
The Golden Visa Program allows retirees who invest in Greek real estate (with a minimum investment of €250,000) to gain residency in Greece. This program is especially appealing for retirees who want to secure long-term residence without the need to establish a permanent employment status.
Additionally, there is a specific retirement visa option for non-EU citizens (including British expats), which requires proof of sufficient income or savings to support yourself without working in Greece.
You can apply for a five-year residence permit under this visa, which is renewable as long as you continue to meet the requirements.
There are also tax considerations for British retirees. Greece offers tax incentives for retirees through its Non-Domestic Tax Regime.
The country’s tax laws are relatively beneficial to retirees. Greece has introduced a flat tax of 7% on foreign income (including pensions) for qualifying individuals who become tax residents. This can significantly reduce your overall tax burden compared to the UK, where the tax rates can be higher.
The 7% tax applies for ten years and is a great incentive for retirees looking to stretch their pension or savings further.
Additionally, Greece and the UK have a Double Taxation Agreement (DTA), meaning that you won’t be taxed twice on the same income, making it easier for British retirees to manage their tax affairs abroad.
If that’s not an enticing offer, Greece also has stunning scenery and natural beauty. Greece’s natural beauty is unrivalled, offering everything from pristine beaches to mountain ranges, olive groves, and vineyards.
The Greek islands, such as Santorini, Corfu, Crete, and Rhodes, provide serene living conditions with charming villages, beautiful coastal views, and endless opportunities for exploration. Whether you choose the mainland or one of the many islands, the landscape will not disappoint. It’s the perfect backdrop for a relaxing and fulfilling retirement.
Greece also boasts a growing expat community, with many British retirees choosing to live in popular locations like Athens, Crete, and the Peloponnese.
Expats often come together in social clubs and British-run businesses, providing a great opportunity to build connections and integrate into the local culture. English is widely spoken, particularly in larger cities and tourist areas, which helps retirees feel at home.
Greece is conveniently located for easy access to the UK, with regular flights from Athens, Thessaloniki, and other major cities to various UK airports. Flights between Greece and the UK are often affordable, and it only takes a few hours to travel back home, making it easy to visit family and friends whenever you wish.
Retiring abroad is a dream for many British expats, offering the chance to enjoy a new lifestyle, lower costs, and a more relaxed pace of life. Whether you're drawn to the stunning landscapes of Greece, the vibrant culture of Spain, the rich history of Italy, or the welcoming atmosphere of Ireland, there’s a wealth of options to choose from. Each country offers unique advantages, from tax benefits to residency options, making it important to understand the practicalities of moving abroad.
To ensure a smooth transition and make the most of your retirement abroad, it's essential to plan carefully. Reeves Independent is here to help you navigate the complexities of retiring overseas, from managing your finances and tax obligations to understanding residency requirements. We can help you tailor your retirement plan to suit your specific goals and needs.
Join our upcoming webinar on retiring abroad to get expert insights into the process and learn how to make your retirement abroad a reality. Book a free review with Reeves Independent today and let us help you achieve your retirement dreams with confidence. Your journey to a fulfilling life overseas starts here!
