Relocation abroad to a more relaxed environment may be a real consideration for older individuals either imminently facing retirement or already in their retirement years. The numerous crises the UK is now facing due to the coronavirus pandemic, highly inflammatory political situations and economic recession may very well be the tipping point for some people. Italy is ranked as one of the best destinations as a retirement location, a beautiful country, wonderful cuisine and wine, amazing cultural heritage and a low cost of living.
Many financially sound people who previously believed that they would enjoy a comfortable retirement and certainly do not relish the prospect of the financial strain a deep recession will place on their retirement years; together with the risk of coronavirus crisis that may possibly hover over us for the foreseeable future and the daunting potential for explosive episodes erupting on the streets, (however understandable).
Relocating to a slower-paced environment may be a viable alternative. Italy has provided a number of innovative tax solutions for the foreign retired with a view to building up the populations of small villages that have seen substantial migration of young people in recent years, which will breathe life into these areas enabling businesses to survive and recover their profitability.
The tax schemes and other incentives have been sensibly thought out, aiming to appeal to particular sections of society, such as the retired, that are the most likely to be financially stable and have the capacity to bolster the local economy with their spending power. The current UK retirement generation is ideally placed to take advantage of the new tax regime in Italy that was recently introduced. Aimed at encouraging retired foreign immigrants who are “younger” in attitude and lifestyle, which includes an active social life where dining out and other activities are frequent features will help to bolster the local business.
Retired individuals who do not yet live in Italy could be eligible for the highly attractive tax scheme providing a 7% flat-rate tax on all their foreign income for the first six years of residence in Italy, making Italy one of the most advantageous places to retire to.
The favourable tax scheme requires the foreign retired to meet the following criteria to qualify:
· They must be newcomers, and may not have been resident in Italy in the previous five years.
· They must be in receipt of a pension paid for by a foreign government.
· The country from which the pension arises must have an administration cooperation agreed with Italy.
· The relocation must be to a town or village with 20,000 or fewer residents
· Comprehensive medical insurance is required.
The areas involved in the scheme are predominantly mid to southern Italy, from Sicily to Abruzzo and as well as Sardinia. The benefits of the scheme work both ways, Italy encourages individuals who are completely financially secure, who will never seek to lean on Italy financially in any way but will add their economic weight to a region in Italy that requires assistance and the foreign immigrant gets something money can't buy as they will enjoy life in a beautiful relaxed environment where not only will their economic power be far greater but also their peace of mind.
Originally published 15 June, 2020
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