As we move into 2026, many British expatriates living in Portugal are taking the opportunity to reassess whether their financial planning remains aligned with their long-term needs, lifestyle goals and plans for their family. Ongoing changes to taxation, pensions and inheritance rules both in Portugal and the United Kingdom, mean that strategies which once worked well may now require careful review.
Why the New Year Is the Ideal Time for a Financial Review
While your financial planning can be reviewed at any time, the start of a new year provides a natural prompt to take stock. A review allows you to check that your arrangements are up to date, reflect any regulatory or tax changes, and still match your personal circumstances.
However, an effective review should go beyond simple updates. Strategic financial planning considers the bigger picture — how your tax planning, investments, pensions and estate arrangements interact, and whether they continue to support your long-term financial security in Portugal.
Changes in income, retirement plans, family structure, health or residency status can all have far-reaching financial implications. Reviewing your position holistically can helps ensure that decisions made in one area do not create unintended consequences elsewhere.
Seeing the Bigger Picture: Strategic Financial Planning
Many people approach their finances in segments. They may have investments chosen years ago, speak to an accountant about Portuguese tax, consult a lawyer about a local will, and separately review their pensions. While each step may be sensible on its own, this piecemeal approach can lack coordination.
Strategic financial planning can bring these elements together. For expatriates in Portugal, this integrated approach is particularly important, as tax treatment, succession rules and pension outcomes are often interconnected across borders.
Residency and Taxation: Getting the Foundations Right
Establishing where you are resident for tax purposes is a fundamental first step, especially if you are new to Portugal or spend time between countries. Portuguese and UK residency rules differ, and misunderstandings can lead to unexpected tax exposure.
Once residency is clear, the focus shifts to structuring your assets and income in the most appropriate way. Regardless of how effective your UK tax planning may have been, it is rarely transferable without adjustment. What was tax-efficient in the UK may not remain so in Portugal.
British expatriates should also remain aware of recent UK tax reforms, many of which have long-term implications and can continue to affect you while living abroad. Reviewing your arrangements allows you to identify potential risks and explore compliant opportunities available in Portugal.
If you secured Non-Habitual Residence (NHR) status before the regime closed to new applicants, it is important to monitor how many years remain in your ten-year term. Once NHR ends, worldwide income and gains generally become subject to Portuguese taxation at standard rates. Forward planning can help ensure that assets are structured as efficiently as possible before this transition.
Estate Planning: Critical and Often Overlooked
Estate planning should not be left until the final stage of financial planning. When living in Portugal, it is essential to review how your assets will pass to your heirs and which rules will apply.
While Portugal does not levy inheritance tax in the same way as the UK, its forced heirship rules can restrict who may inherit certain assets. Without appropriate planning, this can lead to outcomes that do not reflect your wishes, particularly for blended or international families.
The UK’s move away from a domicile-based inheritance tax system towards a long-term residence approach has created opportunities for British expatriates. After a sufficient period of non-UK residence, it may be possible for assets to fall outside the scope of UK inheritance tax, subject to individual circumstances.
It is also important to note that from April 2027, most UK pension funds are expected to fall within the scope of UK inheritance tax. This change highlights the importance of integrating pension planning with wider estate planning well in advance.
Financial Structuring for Life in Portugal
A core principle of effective financial planning is that it must be tailored to you — your lifestyle, family situation, income needs, objectives, time horizon and attitude to risk.
If you do not already have a Portugal-specific financial plan, or if your arrangements have not been reviewed recently, it is worth considering whether your savings and investments remain suitable in the current economic environment.
Questions to explore include:
- Do your investments have an appropriate balance of risk and potential return?
- Are they sufficiently diversified?
- Can they provide income without unduly eroding capital?
- Would consolidation make them easier to manage?
- Are they structured in a tax-efficient way for a Portuguese resident?
It is also important to consider how these assets will ultimately pass to your heirs. Understanding potential tax exposure, probate implications and beneficiary outcomes helps avoid unnecessary delays or costs later.
Pensions: Decisions That Deserve Careful Thought
Pensions are often among the most valuable assets expatriates hold. Decisions around pensions can affect retirement income, tax efficiency and estate planning outcomes.
When reviewing your pension arrangements, it is important to explore all available options with regulated advice, ensuring that decisions align with your wider financial plan and long-term objectives. Pension planning should not be viewed in isolation from tax and estate considerations.
Pulling Everything Together
Every family’s circumstances are different, and there is no one-size-fits-all solution. Strategic financial planning means creating a cohesive wealth management strategy where tax planning, investments, pensions and estate arrangements all work together.
At Blacktower Financial Management, we specialise in cross-border financial planning for expatriates. By taking a holistic approach, we can help clients navigate complexity, avoid unintended consequences and build plans designed to potentially provide long-term financial security and peace of mind.
Spending time on a comprehensive financial health check now can help ensure you and your family are well positioned for 2026 and for the future beyond.
This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.
London – July 2019: Leading wealth management provider, Blacktower Financial Management Group has announced value of £100m under its Nexus Global Solutions Portfolio. 
The rules relating to pension transfers and inheritance tax could be set to change after HM Revenue & Customs (HMRC) announced that it is to review its guidance on the matter following a number of concerns raised by the Office of Tax Simplification (OTS) in a review published on July 5 2019.