NHR Portugal
What happens when your non-habitual residence status ends?

Portugal after NHR

Act now to lower your future tax bill

Portugal’s non-habitual residence (NHR) regime has closed for new applicants, but if you already have NHR status you continue to receive the tax advantages until your 10-year term ends. At that point, you become liable to Portuguese tax on your worldwide income and gains. Take advantage of your NHR benefits and restructure your assets now to vastly improve your post-NHR tax bill.

Non-habitual residents can often receive foreign income completely free of Portugal tax. British expatriates with NHR status therefore receive UK interest, dividends, capital gains on real estate and most rental income tax free, as well as non-Portuguese employment income. UK and other foreign pension income generally benefits from a flat 10% tax rate.

Portugal tax after NHR – rates up to 48%

Once your 10 years are up, your worldwide income and gains become liable to Portuguese taxation at the full rates.

The income tax scale rates start at 13.25% for income up to €7,703, then climb up to 48% for income over €81,199.

Interest and other investment income is taxed at a flat 28%, although you can opt for the scale rates. Where assets are held in a jurisdiction on Portugal’s ‘tax haven’ blacklist, the rate increases to 35%.

If you sell a property anywhere in the world without NHR, 50% of the gain is taxable in Portugal at the income tax rates. Your main home (which can only be in Portugal if you live here) may be exempt, depending on circumstances and how you use the proceeds.

Portugal after NHR – act while you still have benefits

Don’t wait until you’re coming to the end of your NHR term, start planning years in advance. Allow plenty of time to restructure your assets for the most tax-efficient transfer out of NHR possible. This applies whether you stay in Portugal or move to pastures new.

At Blevins Franks, our clients are usually pleasantly surprised by how much tax our specialist knowledge and strategic financial planning can save them. With our expertise, the Portuguese tax regime provides compliant opportunities to enjoy extremely favourable tax treatment on capital investments. Retires who reinvest real estate gains into these tax-efficient arrangements may be also exempt from capital gains tax on the property gain.  Additionally, there can be very attractive tax options for residents in a position to encash their pension, making it comparable to NHR benefits.

Precise planning is needed – and Blevins Franks can help

Blevins Franks has been advising UK nationals in Europe for almost 50 years, with offices in Portugal for over 25 years. With our in-depth local knowledge and cross-border expertise, we can:

  • Clarify what tax you’ll pay once your non-habitual residence status ends.
  • Calculate how much tax you could save with a strategic financial plan.
  • Help you restructure your assets accordingly.
  • Compare tax residency in other countries if you’re thinking of leaving Portugal.
  • Provide integrated advice covering tax, succession, investing and pensions.
  • Deliver long-term solutions for you today, tomorrow and also your family in future.
  • Share our decades of expertise in Portugal and around Europe.
  • Regularly review and revise your arrangements to reflect any changes.

The clock is ticking, don’t leave it too late.

Get in touch with Blevins Franks today to find out how much tax we can save you.

Fill in our online form below and we will contact you to arrange an initial, no obligation, consultation, or contact our local offices:

TELEPHONE  289 350 150  |  EMAIL  [email protected]

OUR PORTUGAL OFFICES  Loulé, Cascais

The tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; an individual should take personalised advice.

 

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