Portugal

Portuguese taxes on residents can appear high: income tax up to 48%, a ‘solidarity tax’ of 2.5 or 5% on higher incomes, tax on capital gains, even a wealth tax on Portuguese property worth over €600,000. Non-residents can also be liable for property taxes.

But in our experience, with proper planning, the reality is that many UK nationals can save money in tax by moving to Portugal – with those who retire in Portugal enjoying particularly favourable tax treatment on their investments and pensions

The Incentive for Scientific Research and Innovation (IFICI) – often referred to as NHR 2.0 after the previous non-habitual residence regime – offers a flat 20% income tax rate for up to 10 years to qualified professionals working in high-value sectors. It also provides possible exemptions on certain foreign income and capital gains.

The Portuguese equivalent of inheritance tax is stamp duty, and it’s limited. The rate is just 10%, it’s only payable on assets based in Portugal, and spouses and children are exempt.

But many British expatriates may not realise that without effective planning, they could also face UK inheritance tax for up to 10 years after leaving, while UK assets are always liable. And they may not understand the principle of “forced heirship” in Portugal’s succession law, which means your direct family will inherit a pre-defined proportion of your estate regardless of your intention.

There are ways to overcome much of these issues, but they are complex and there can be unintended consequences. Our advice can make sure you get the outcomes that you want.

If you’re retiring to Portugal, with careful planning you can enjoy significant tax benefits on UK pension income and lump sums.

We can advise you on the pros, cons and tax implications of all your pension options, including Qualifying Recognised Overseas Pension Schemes (QROPS), so you can make a fully informed decision on the best solution for you.

Our specialist expertise can make sure your finances are structured as tax efficiently as possible for Portugal, with a strategy personalised to your situation and objectives.

We have access to some of the world’s best investment managers to make sure your money works as hard as it can for you.

Speak to Blevins Franks to take full advantage of the tax and investment opportunities available to British expatriates living in Portugal.

 Arrange a free consultation with a local adviser.

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; individuals are advised to seek personalised advice.