Malta: Escape high UK tax for a Mediterranean location?

Following on from our last blog connected to those choosing to leave the UK to mitigate their UK tax position, where we then focused on Dubai, there are many seeking an overseas destination that is a little closer to the UK. This is usually with a view to making return visits to family and other UK connections as easy as possible, but they are also keen to enjoy the Mediterranean lifestyle. Something which they have perhaps aspired to for most of their working lives.

When looking at low tax jurisdictions that essentially ‘tick this box’, Malta does feature as one of the top destinations for British expats. With its mix of financial advantages, cultural richness, and enviable climate, Malta offers an alternative that blends opportunity with luxury.

A Tax system that works for you

Malta has earned a reputation as a top destination for expats and global businesses thanks to its highly attractive blend of British-influenced legal and tax systems. See below a high-level outline of the current Maltese tax landscape:

• Foreign (non-Maltese) income and Gains – only taxed if remitted to Malta
• No tax in capital or savings transferred to Malta
• No Wealth Tax
• No Inheritance Tax
• 15% Flat rate of tax on remitted income
• Visa-free access across the Schengen area
• Depending on the visa, no requirement to provide a minimum day count of physical presence in Malta

Tax efficiency for individuals

At the core of Malta’s appeal is its non-domicile tax regime. UK expats who take residence in Malta are taxed only on income that is earned in Malta or remitted there from abroad. For those with international earnings, this provides a level of tax efficiency that is no longer achievable in the UK.

Income is taxable at graduated progressive rates, ranging from 0% to 35%. The 35% tax bracket is reached at an annual chargeable income in excess of €60,000. By comparison, in the UK, income tax bands range from 20% to 45% (up to 48% for Scotland), with the highest rate applying to income above £125,140.

Just as importantly, Malta does not impose inheritance or estate taxes. For high-net-worth individuals focused on succession planning, this policy alone can mean substantial long-term savings and greater control over wealth preservation. The only consideration is a duty on documents and transfers, between 2 and 12% on real estate and 2% on securities. Even then, exceptions apply, especially for shareholders with interests beyond Malta’s shores.

Seamless integration for Brits

Relocating abroad often comes with cultural and language barriers – but Malta makes the transition easy. English is an official language, and with a long history of British influence, everything from driving on the left to familiar banking systems feels reassuringly familiar. With over 300 days of sunshine a year, Malta provides a stark contrast to the UK’s grey and often gloomy climate. For many, this lifestyle upgrade is priceless. Add in a vibrant international community, and Malta quickly feels like home.

A strategic European base

Post-Brexit, Malta offers Brits something the UK no longer can: an EU foothold. Residency in Malta means smoother travel across the Schengen Area, closer ties to European markets, and the freedom to maintain a truly global lifestyle. Conveniently, the islands are just a three-hour flight from London, keeping the UK within easy reach.

Residency made simple

Whether you’re a retiree, digital nomad, or entrepreneur, Malta has designed residency programmes tailored for expats. The Digital Nomad Visa makes remote work abroad seamless, while the Global Residence Programme and other schemes provide clear, structured pathways for long-term relocation. Compared to many European alternatives, the process is refreshingly straightforward.

Malta retirement programme

Retirees from the EU, EEA, Switzerland, and non-EU countries whose main income comes from a pension can take advantage of the Malta Retirement Programme, also known as the Malta Retirement Visa, adding a level of security to retirement. This tax residency scheme allows participants to benefit from a preferential 15% tax rate on foreign income remitted to Malta, with a minimum annual tax of €7,500.

Long-term stability – Malta’s 2025 Budget

Malta is renowned for its favourable tax regime, and in terms of long-term economic stability, the 2025 Malta Budget introduces a targeted set of tax reforms aimed at supporting individuals, families, and businesses while strengthening Malta’s competitive position.

Key measures include the widening of personal income tax brackets, expected to deliver key annual savings. Pensioners who remain in the workforce will be able to exclude up to 80% of their pension income from taxation, encouraging active participation in the labour market.

For businesses, the Budget promotes corporate social responsibility by offering tax credits to enterprises that contribute to community initiatives.

Collectively, these measures balance fiscal responsibility with social equity, reinforcing Malta’s reputation as an attractive and forward-looking jurisdiction for both residents and businesses.

There are many tax aspects to consider when relocating overseas, not least ensuring there is a clear break from UK tax residence to be able to take full advantage of any tax-efficient jurisdiction. We would therefore always recommend that holistic tax advice is provided to ensure a joined-up approach across both the country of departure and arrival. To that end, we work closely with our Maltese network associates to ensure this joined-up approach to both UK and Maltese Tax advice, well in advance of any planned relocation.

If you are considering a move overseas and need help with your tax position, please contact Lynn Gracie or Kirsty Ringland or your usual AAB contact.