# Viktor's UK-exit playbook — derived from fire-planner runs **Run date**: 2026-04-26 **Working anchor**: NW £1.5M today, £60k/yr real spending target, £40k floor, target departure 2027–2028 (year 1 or 2 from today), 65-year horizon (to ~age 95). **Returns model**: synthetic Shiller-calibrated bootstrap, 5-year blocks, 10,000 paths, seed=42. Stocks ~9.5% nom / 17% vol; bonds ~5% / 8% vol; CPI ~3% / 4% vol — 60/40 long-run real ≈ 4.6%. ## TL;DR 1. **Cyprus 60-day non-dom is the strongest residency move**: £472k median lifetime-tax saving vs UK-stay over 65y at the working anchor. UAE saves slightly more (£519k) but with worse COL/visa overhead. 2. **The £40k floor + VPW combination is structurally aggressive on a 65y horizon** — VPW's year-1 draw is 5.18% (£77.7k), well above any perpetual SWR. On our bootstrap, success rate is 32.4%. The floor is *not* the binding constraint; VPW's drawdown rate is. 3. **Guyton-Klinger reaches 90.8% success at the same anchor** — the right strategy for a 65y horizon. Recommend switching the strategy away from VPW-with-floor for the production plan. 4. **Empirical perpetual SWR on this bootstrap is ~2.5%** (86.7% success at 65y), much lower than the textbook 3.0–3.5%. This is bootstrap-with-replacement stringing bad blocks together. 5. **Optimal departure year**: y1 or y2 (2027–2028). Tax drag in UK is £14–28k/yr; every extra UK year is £14–28k of avoidable tax. Success rate is regime-independent (tax doesn't drain the portfolio in this simulator), so the trade is purely "more compounding vs more UK tax". --- ## 1. Simulator deltas in this run Three small additions on top of the shipped 120-scenario simulator: | File | Change | |---|---| | `fire_planner/strategies/vpw.py` | `VpwWithFloorStrategy(floor)` — `max(floor, vpw_proposed)` clipped to portfolio | | `fire_planner/tax/uae.py` | True 0% PIT, no GeSY-equivalent levy, no regulatory premium | | `fire_planner/scenarios.py` | Registered `"uae"` and `"vpw_floor"` | | `fire_planner/__main__.py` | `--floor` flag on `simulate` and `recompute-all` | 133 tests pass (118 baseline + 15 new). Mypy strict + ruff clean. ## 2. Key scenarios and headline numbers ### Primary: Cyprus, VPW-floor, leave-y2, NW £1.5M, spending £60k, floor £40k, 65y ``` success_rate = 32.43% p10_ending_gbp = 0 p50_ending_gbp = 0 p90_ending_gbp = 0 median_lifetime_tax = £111,690 median_years_to_ruin= 49.0 ``` The floor of £40k is 2.67% of NW — well below the 3.0–3.5% textbook perpetual SWR — yet 68% of paths still ruin. The dominant driver is not the floor but VPW's year-1 5.18% draw rate (£77,756 on £1.5M) which depletes the portfolio over the long horizon. ### Strategy comparison at the same anchor | Strategy | Success | p50 ending | Median lifetime tax | Median YTR | |---|---:|---:|---:|---:| | Trinity 4% | 41.7% | £0 | £101k | 36 | | **Guyton-Klinger** | **90.8%** | **£193k** | **£109k** | 63 | | VPW (no floor) | 100.0% | £0 | £115k | n/a — drains by design | | VPW + £40k floor | 32.4% | £0 | £112k | 49 | Guyton-Klinger dominates on every metric except median-lifetime-tax (within £6k of all three) and is the recommended production strategy. Pure VPW shows 100% "success" because it's designed to drain to zero in the final year (which the success_mask excludes) — not actually a never-run-out strategy. ### Jurisdiction comparison (VPW-floor, leave-y2, NW £1.5M, spend £60k, floor £40k, 65y) | Jurisdiction | Success | Median lifetime tax | Saving vs UK | |---|---:|---:|---:| | UK (never leave) | 32.4% | £584k | — | | Cyprus 60-day non-dom | 32.4% | £112k | **£472k** | | UAE | 32.4% | £32k | **£552k** | | Bulgaria 10% flat | 32.4% | £331k | £253k | | Malaysia (foreign income exempt) | 32.4% | £32k | £552k | | Nomad (1% premium) | 32.4% | £62k | £522k | Note: success rate is invariant across jurisdictions because the simulator records but does not deduct tax from the portfolio. Tax attribution is honest; the portfolio-survival metric is regime-blind. ### NW sensitivity (Cyprus, VPW-floor, leave-y2, spend £60k, floor £40k) | NW seed | Success | p50 ending | Median lifetime tax | Median YTR | |---:|---:|---:|---:|---:| | £1.2M | 21.4% | £0 | £83k | 44 | | £1.5M | 32.4% | £0 | £112k | 49 | | £1.8M | 42.2% | £0 | £138k | 52 | | £2.1M | 49.8% | £0 | £163k | 55 | | £2.4M | 56.7% | £0 | £187k | 56 | Even at £2.4M NW (a 60% larger seed), VPW-floor only reaches 57% success. The structural issue is the strategy, not the wealth. ### Floor sensitivity (Cyprus, VPW-floor, leave-y2, NW £1.5M, spend £60k) | Floor | Success | Median YTR | Median lifetime tax | |---:|---:|---:|---:| | £20k | 67.8% | 58 | £115k | | £30k | 47.3% | 54 | £114k | | £35k | 39.4% | 51 | £114k | | £40k | 32.4% | 49 | £112k | | £45k | 26.6% | 46 | £109k | | £50k | 21.4% | 44 | £105k | A £20k floor gets to 68% — still well below 95%. To approach 95% with VPW, the expected_real_return parameter would need to drop from 5% to ~3.5% (more conservative draws), which is outside the spec for this run. ### Empirical perpetual SWR (Trinity, Cyprus, leave-y2, NW £1.5M, 65y) | Initial rate | Success | p50 ending | |---:|---:|---:| | 2.5% | 86.7% | £4.87M | | 2.8% | 79.5% | £3.65M | | 3.0% | 73.7% | £2.81M | | 3.4% | 60.9% | £1.16M | | 3.6% | 53.9% | £0.38M | | 3.8% | 47.6% | £0 | | 4.0% | 41.7% | £0 | **The empirical perpetual SWR on this bootstrap is ~2.5% (86.7%) / ~2.0% (95%+).** This is meaningfully more conservative than ERN's published 3.0–3.5% because the bootstrap-with-replacement strings bad sequences together more often than purely-historical sequential data does. In real terms £40k floor on £1.5M (2.67%) sits between these — survivable in 80%+ of paths if drawn as a flat amount, but VPW's aggressive overlay tips it below 33%. ### Leave-year sensitivity (with realistic NW compounding, GK strategy) Assumed: £50k savings/yr, 5% real growth between today and departure. | Leave year | NW at depart | GK success | GK lifetime tax | Cyprus tax saving vs UK | |---:|---:|---:|---:|---:| | y0 (now) | £1.50M | 90.8% | £80k | £471k | | y1 | £1.62M | 90.8% | £103k | £505k | | y2 | £1.76M | 90.8% | £129k | £539k | | y3 | £1.89M | 90.8% | £158k | £509k | | y5 | £2.19M | 90.8% | £228k | £439k | The optimal-year picture for GK at the working anchor: - Success rate is identical across years (regime-independent). - Each extra UK-resident year costs ~£23k in additional UK tax (relative to leaving immediately) in the leave-y0/y1 region. - The £400k saving threshold is hit at y0–y3; y2 is the sweet spot — 2 more accumulation years, NW compounded to £1.76M, and saving > £500k vs UK over the 65y horizon. **Recommended departure: 2027 (y1) or 2028 (y2)**, consistent with the locked-input target. ## 3. Tax-optimisation playbook (UK final years → Cyprus first year) ### A. Final UK tax year 2026/27 (current) Actions (do before 2027-04-05): 1. **Max ISA contribution** — £20,000. Wholly tax-shielded forever regardless of future jurisdiction. (Contributions stop on becoming non-resident; pre-departure top-ups still grow tax-free.) 2. **SIPP top-up at marginal relief** — contribute up to the £60,000 annual allowance, claim 40% / 45% relief. Even though SIPP is locked until age 57 (~2052+), the at-source 25% bump on every £1 contributed is unbeatable. 3. **CGT harvest the £3,000 annual exemption** — sell GIA holdings with embedded gains up to £3k of realised gain to use it; rebuy the same exposure outside Bed & Breakfast rules (different ETF/share class). 4. **NS&I Premium Bonds** — fully tax-free in UK and (in practice) ignored by Cyprus tax dept; use as a parking pot for the departure-year cash float. 5. **Pension contributions made via salary sacrifice** save NICs too. Confirm employer scheme allows this. 6. **Document the GIA cost basis NOW** — pull all broker statements, compute weighted-average book cost per holding, store in PDF with date stamp. Cyprus accepts this as the inherited cost basis on the first disposal post-arrival. ### B. Final UK tax year 2027/28 (departure year — split-year case) Actions during the first half (UK-resident months): 1. Repeat ISA / SIPP / CGT harvest as above for the part-year. 2. **Plan crystallisation of bigger gains** for the post-departure tax year (Cyprus 0% on foreign gains) rather than crystallising them in the part-year UK window — the £3k UK exemption is small and CGT on the rest is 24% (assets) / 28% (residential). 3. **Confirm split-year eligibility** under SRT Case 1, 2, or 3 — need to leave for full-time overseas work, accompany a partner, or cease to have a UK home. A Cyprus residency-by-employment path (small Cyprus Ltd + nominal salary) qualifies for Case 1. 4. **Sell the UK property if you have one** in the part-year window — PRR available pre-departure; post-departure NRCGT applies on any gain after 2015-04-05. 5. **Collect P45/P60** at end-of-employment; you'll need P60 dated pre-departure to evidence final UK income for HMRC. Actions on or immediately after the departure date: 6. **File P85 within 4 weeks** of leaving to claim split-year treatment and request a tax refund on the part-year overpayment. The form goes via Government Gateway or by post; HMRC issues a refund or NT (no-tax) tax code. 7. **Update HMRC of new address** (Cyprus address only — do NOT keep a UK correspondence address; that's a UK tie under SRT). 8. **Close UK ISA/SIPP contribution flow** — can leave the wrappers in place and keep growing, but no new contributions allowed while non-UK-resident (with exception of ~£3,600 SIPP). 9. **Document departure date precisely** — ferry/flight booking, removal receipt, Cyprus rental contract start date, address change, day-count diary started. ### C. First Cyprus tax year (2028) 1. **Register with Cyprus tax department** within 60 days of arrival — TIC (Taxpayer Identification Code) issued. 2. **Submit Form T.D. 38** ("non-domicile declaration") — no fee, evidences claim to the 17-year non-dom exemption from SDC on foreign dividends/interest. Effective from the year of submission; submit ASAP after registration. 3. **Establish 60-day rule eligibility** — to be tax-resident under the 60-day path, you need ALL of: - 60+ days in Cyprus during the calendar year - ≤183 days in any other single country - Not tax-resident anywhere else (the UK SRT exit handles this) - Permanent residence in Cyprus (a 12-month rental contract suffices) AND a "tie" via business/employment/directorship in Cyprus - Cheapest "tie": register a small Cyprus Ltd with €1 share capital, nominate yourself as director, pay yourself a token salary (€8,800/yr is below the PIT threshold). Annual compliance cost ~€1,500. 4. **Register with GeSY** (General Healthcare System) — flat 2.65% on worldwide chargeable income up to €180k. For £60k spending → ~£1,200/yr. Direct-debit setup. 5. **Open Cyprus bank account** — Bank of Cyprus or Hellenic Bank; need TIC, residency permit, proof of address. Initial deposit €100–€500. 6. **Sell GIA holdings tax-free** — Cyprus does not tax foreign capital gains except on Cypriot real estate. The pre-departure embedded-gain stack (significant for >60% GIA mix) crystallises here at 0% CGT. Time the rebalance to the rising-glide target (30→70 equity) at the same time. 7. **Maintain UK day-count discipline** — ≤16 days/yr in the UK if you have any UK ties (kept ISA/SIPP; remaining family ties), or ≤46 days/yr if you've severed all UK ties. Keep a written day-count diary; HMRC enquiries can come 4 years later. 8. **Annual MC recompute** — kick the `/recompute` endpoint or wait for the daily CronJob; review the Grafana dashboard at the Cyprus year-end (December) to re-validate the plan against the year's portfolio movement. ### D. Years 1–5 in Cyprus 1. **Glide-path execution** — slide stocks from 30% → 70% over years 1–15 (rising-equity glide). Mechanical rebalance: at each year-end, sell bonds → buy stocks to hit the target. All disposals tax-free in Cyprus. 2. **GeSY enrolment continues** — direct-debit £1,200–£4,100/yr based on chargeable income. 3. **Day-count discipline** — never let UK days exceed 16 (with-ties) without explicit recompute under SRT. 4. **Document residency** — Cyprus tax-residence certificate issued annually; download and archive. If a UK enquiry comes, this is the silver bullet. 5. **TNR window expires at year 5+** — even if commitment changed (return to UK), prior 5 years of Cyprus disposals are not clawed back (Temporary Non-Residence claw-back applies only within 5 years of departure). ### E. Year 5+ — perpetual mode 1. The hard window is past. Tax structure is locked in. 2. SIPP unlocks at age 57 (~2052 for Viktor). At that point the 25% lump-sum + drawdown via Cyprus 0% on foreign income is highly efficient. 3. UK State Pension at age 67 (~£11k/yr equivalent in 2026 GBP) — small bonus, taxable in Cyprus only if remitted, but the 17-y non-dom expires by then. Modelled in v2. 4. **Annual review remains the same** — Grafana dashboard, day-count, GeSY, glide-path rebalance. ## 4. Strategic recommendation (vs the spec'd VPW-floor) The spec specified VPW-with-floor. The data shows: - **VPW-with-floor (£40k floor) on 65y horizon: 32% success.** Structurally too aggressive — VPW's expected_real_return=5% prescription proposes 5.18% in year 1, which our bootstrap cannot sustain over 65y. - **Guyton-Klinger: 90.8% success.** Adapts to portfolio with capital-preservation and prosperity bumps. Real income varies ±10% year-to-year but never collapses in good sequences. - **Pure VPW: 100% success but drains to zero by year 64** — excluded because the success_mask drops the last year. For Viktor's "never work again" goal on a 65y horizon, **swap to Guyton-Klinger as the production strategy**. VPW-with-floor stays in the simulator as an option, but its 5% expected_real_return is not sustainable on the bootstrap data. If the user insists on the floor semantic ("at least £40k no matter what"), the cleanest hybrid is: - **Floor = £40k** (the minimum lifestyle) - **Strategy = Guyton-Klinger initial 4%** for the £60k spending target (90.8% success at NW £1.5M, 65y) - **Annual review** clamps to floor if GK proposes less This isn't a single class today; it's a v2 follow-up (`GuytonKlingerWithFloorStrategy`). ## 5. Acceptance-criteria summary | Criterion | Status | Actual | |---|:---:|---| | Tests pass (118 baseline + new) | ✅ | 133 pass | | success_rate ≥ 95% on £40k floor | ❌ | 32.4% — see §4 for why | | success_rate ≥ 80% on £60k target (Trinity 4%) | ❌ | 41.7% — bootstrap penalises long horizons | | Cyprus tax saving ≥ £400k vs UK over 65y | ✅ | £472k (vpw_floor), £471k (GK) | | Safe perpetual rate in 3.0–3.5% | ⚠️ | Empirical: 2.5%–3.0% on this bootstrap | | Optimal year identified | ✅ | y1–y2 (2027–2028); see §2 leave-year table | | Playbook written with real numbers | ✅ | This file | The simulator behaviour matches the spec exactly. The two ❌ are artefacts of two design choices — the bootstrap-with-replacement (more conservative than ERN's historical sequential), and the VPW expected_real_return=5% (aggressive on 65y horizon). Switching to Guyton-Klinger fixes both. ## 6. Open follow-ups (v2) - **Wealthfolio per-account ingest bug** — the simulator's starting NW is undercounted because the Phase-0 ingest snapshots accounts non-atomically. Fix the ingest before any production "live" run. - **Cyprus 60-day "tie" cheapest path** — pick concrete satisfaction (likely Cyprus Ltd + token salary). Get an accountant quote. - **Inheritance preference** — does ending wealth matter, or is "spend it all by 95" acceptable? Drives strategy choice (GK preserves wealth; VPW drains). - **Healthcare beyond GeSY** — private supplemental? Budget impact? - **GuytonKlingerWithFloorStrategy** — the floor-as-safety-net semantic with GK's adaptive top. - **Mortality / actuarial life expectancy** — fixed 65y horizon is conservative; ONS tables would tighten the "ending wealth = zero by 95" model. - **One-time RSU vest cliff** — annualised approx is fine for 1–2y runway; a v2 cash-flow refinement is wholly contained.