There are some very significant differences between the tax regime in Portugal and the way your tax is levied in the UK and other countries and without professional help in understanding the differences there could be a serious negative effect on your wealth. There are even taxes in Portugal that Expats will not have encountered before such as Wealth Tax and Solidarity Tax.
As a resident of Portugal you could be liable for tax as follows:
Without proper tax planning you could end up paying considerably more tax than necessary. The rules are complicated and with the introduction of Common Reporting Standards the Portuguese authorities will automatically receive information about your income and asset holdings elsewhere so it is important to ensure that your tax declarations are correct.
Although the regime sounds onerous with our help you should be able to enjoy favourable tax treatment.
If you are a newcomer to Portugal the ‘Non-Habitual Residents’ (NHR) scheme gives special tax benefits to new residents for their first ten years in the country. It also offers a lower income tax rate of 20% if you’re employed in Portugal in a ‘high value’ activity and allows you to receive foreign income – for example investment income pensions and dividends tax-free.
Our advisers are here to help you structure your investments and pensions to ensure that you benefit from the tax efficient schemes available to Expats living in Portugal. It is really important that you recognize that tax efficiency means aligning your assets with your residential status. Holding onto UK investments when resident in Portugal can be detrimental to your wealth and it is equally important to review your pension arrangements preferably before you move to Portugal particularly if you intend to retire there.
Inheritance tax in Portugal is referred to as stamp duty. The tax rates are considerably more attractive than the UK equivalent and can even be 0% for direct family and spouses. What Expats need to remember is that living in Portugal does not necessarily remove your liability for UK Inheritance. UK domicile rules mean that your worldwide assets can still be subject to IHT.
With careful planning our Expat experts will guide you through this complex area of planning to help minimise your liabilities.
Speak directly to a locally based, professionally qualified, personal financial advisor, specialising in Expats in Portugal, about your personal financial planning needs.
Please contact us on Tel: +44 207 998 0570 or email enquiries@fwm.gi
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+44 207 998 0570Give us a call and tell us how we can assist with your financial planning needs. Our Expat experts are here to help you.
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