What About Inheritance Tax in Bulgaria?

Australia was voted by 10% of Britons as the most popular overseas destination to live in the world whereas the most popular destination to live in Europe was France at 6%. Expats must be very careful they understand the tax implications involved in moving abroad and Inheritance tax can be a particular problem- especially in Spain and France. We are now seeing countries like Turkey attracting more Brits as permanent residents, but this is a territory with extremely complex , family orientated IHT planning laws and retirees could seriously lose out if they do not take expert advice- as in Spain and France. Cyprus has no inheritance tax but the country’s succession laws restrict the disposals of assets after death which can still lead to financial disadvantage. You have been warned !! 49,000 Brits moved to Spain in 2007, 27,000 to Australia, 20,000 to France, 16,000 to the USA and 3,000 to New Zealand. There is no inheritance tax charged in Australia. Inheritance tax is not an issue in Bulgaria and it is unlikely you would pay capital gains tax either in Bulgaria ( see tax liabilities section later on ).

A recent study by HiFX and psychologists showed that emigrating to an English speaking country does not mean the process will automatically be easier for expats. Factors such as currency fluctuation, alien legalities and different taxation systems mean that the US and Australia followed hot on the heels of South Africa when tested against a number of stress inducing factors which meant the above 3 countries came out worst in the study. Southern Cyprus, Canada, Italy and Spain did not score well in the study. Bulgaria’s currency is pegged to the euro- which helps greatly- their taxation system is simple and low but their admin. can be slow and laborious if you do not use the right professionals. English is generally understood by the average Bulgarian.

Expected Costs For Bulgaria Living

Income tax rates in many overseas jurisdictions are significantly lower than in the UK, particularly for pensioners and there are generally no restrictions on buying a pension annuity at aged 75. Spain and France have lower rates than the UK while anyone moving to Cyprus could be taking their pension as subject to 6% income tax while those seeing out their years in Dubai would pay no tax at all. Bulgaria operate a simple 10% uniform income tax rate.

Expected costs for Bulgaria living:

  • Local tax 200 lv per annum
  • Telephone land line rental 30 lv per month
  • Internet 20/60 lv per month
  • Sky TV connection fee 300 lv
  • SKY 300 lv per annum
  • Electric summer 30/40 lv per month winter 200/300 lv per month
  • Water meter, 30 lv per month
  • Septic tank 30 lv per month ( empty once a month )
  • Logs 500 lv per winter
  • Car rental 50 lv per day

Current exchange rate is 2.25 lv to the pound.

Note that there is an inflation problem in Bulgaria due to general prices being very low as above compared to western prices and foreigners should be aware as in any other emerging markets country that they should purchase houses with good security and preferably in an estate type of development with good neighbours and a neighbourhood watch type of set up- as westerners will be targeted by thieves because of their perceived wealth.

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