"Guaranteed income" for a 10-year retirement residency visa

@gordon081257 You can show either a total amount of USD18,000 in your bank account or periodic payments of USD1,500 per month.

If the monthly is a problem, then show a lump sum in your account (which has been there for at least 6 months) of USD18,000.

This has to be shown annually. But as long as you have USD18,000 now, you can get the ball rolling.

Thanks SafferCA. By "your account" do you mean a UK account or Mauritian account? Presumably the former as this is pre-visa? So the sources of the USD18,000 lump sum or USD1,500pcm don't matter, so long as you can show the sums on bank statements?

Good afternoon. A friend (57) wishes to apply for a 10-year retirement residency visa, but we're both struggling to establish what income will be treated by EDB as "guaranteed income" for the visa. He's not yet entitled to his company or state pensions - which would of course rank as "guaranteed income" - but what about his rental income from his UK property when he emigrates to Mauritius? Thanks. - @gordon081257

@gordon081257

Hello Gordon,

Great question! I’m struggling with the same thing! My retirement income will not be enough this cover the monthly requirement so I will need additional income. Best of luck to you!

@freegwendolyn

Thanks. You may have seen other replies about having a lump sum in an account instead.

@gordon081257 Correct. Also, if you're going for the US$1,500 per month, they don't care whether it is a pension, a gift or a salary. As long as it is a constant flow that equals US$18,000.

My application was approved on a lump sum. It was much simpler to deal with and the only proof was a bank statement from my foreign account. I have since transfered the money to Mauritius.

@SafferCA

That is the main criteria nowadays I think. Show the money in your bank account abroad; it is understood then that you will transfer money into Mauritius for living expenses once you have opened your local bank account. $1500 is fine for a single person, or even a couple living simply. However, if you do have this coming into your account per month, and you become tax resident in Mauritius, do you have to pay your taxes as per local rules? Or is this exempt?

Best wishes.

@Tookays If you become a tax resident, which you would be if you are in Mauritius for more than 183 days, as I will be this year, you pay tax on your income. If it is a lump sum, for example savings or investments, you will only pay tax on taxable income. No capital gains. The tax rates are generally lower than most other jurisdictions. There are double taxation agreements with many countries to prevent you paying tax on both sides.

@SafferCA

Thank you. The retirement permit specifically says I cannot have paid employment or perks in the country.

Are funds remitted from outside the country, say UK, which have already been taxed, be taxed again in Mauritius? Probably not.  However, if my pension is sent to Mauritius, without tax paid in the UK, I think I will be taxed in Mauritius anyway since I presume this will be treated as 'income'.

I must look up the tax rules in Mauritius for expats on a retirement permit. As you say, the thresholds are better in Mauritius.

Best wishes.

@Tookays yes you cannot get your income from within Mauritius. Any discussion on this assumes it comes from a foreign source. You may well be taxed in that foreign jurisdiction but if you are a Mauritian tax resident you will be taxed again. There are tax treaties and credits that prevent double taxation. This you will need to sort out depending on your circumstances.

@SafferCA

Thanks!

@SafferCA

Thanks.

@SafferCA

As far as I know, there are tax agreements between Mauritius and the UK. If I can persuade my wife to move, I shall definitely become tax-resident in Mauritius. All my 'income' will be from the UK so hopefully my tax status will be better.

Best wishes.

But if at 64, my ‘income’ is derived from funds secured through the sale of my company shares in 2018 and already taxed in the Uk as Capital gains, and I’ve lived off those funds with no additional income (as acknowledged by HMRC) since then, and will for the remainder of what’s left of my life, surely I have ‘no’ tax to pay in Mauritius?

Very interesting point and I would agree with you. I have a communique from the Mauritius revenue Authority:

Taxation of gains from sale of shares or other securities

2. In order to simplify taxation of gains from sale of shares and securities, the

MRA issued a Practice Note dated 30 October 2006 to clarify as follows:

i. any gains derived from sale of shares and other securities by an

individual resident in Mauritius are considered as capital gains and

therefore not subject to income tax;

I don't think I can attach pdfs. If you want to PM me with your email address I will send you the full Communique.

Chris

@david6363

It depends on how you want to structure your finances. If you transfer some of your money into Mauritius every month/year as required for the permit, then you do not have to pay taxes in Mauritius if you have paid taxes in the UK. You could transfer in just enough to remain within the tax bracket anyway. You could transfer in a large amount and earn interest in a Mauritius bank account, and if that interest is under the tax threshold in Mauritius (as income) the again no tax. If your UK money is earning interest then you may be liable for tax depending on how much interest you are getting.

However, Uk has changed its tax laws recently making it difficult to become tax-resident elsewhere if you have any ties to the UK -- you still have to pay taxes in the UK. If you only have money in a bank account which has already been taxed, you should be fine. But I am not a tax expert.

I suspect you will be fine in Mauritius. Good luck.

@Tookays thanks, I am a duel citizen of SA and UK, having been an immigrant to SA in 1974. I derive no interest of substance on my UK bank accounts. I merely live off the capital. Not had to pay tax over and above the capital gains previously mentioned. UK bank interest is dismal to say the least, would much prefer to transfer balances to interest earning accounts in Mau. Thx for feedback.🙏

@david6363

If I was living in Mauritius and was tax resident there, I would transfer most of my money to Mauritius. Savings interest rates are definitely higher than in the UK.

Example interest rates:

Skipton International Building Society

Instant Access - Minimum deposit £10K - 3.15%

Fixed term bond - circa 4 months - Minimum deposit £10K - 4% - Not sure this is still available

Afrasia Bank - quoted last week

Amount: MUR 2,100,000

Tenor: 3 months

Rate: 3.25% p.a. fixed interest payable at maturity

Does anybody have access to significantly better rates for GBP or MUR?

The other factor you need to consider is devaluation of the MUR against GBP.

1 year - 8.6%

2 year - 6.9% - total across 2 years not per year

Source is XE.

I have seen some long term forecasts suggesting that the MUR will devalue further, but who really knows.