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Moving to Portugal – Important matters to consider

The following is a summary of the main provisions of qualification for NHR:

  • You must be resident in Portugal for more than 183 days in any calendar year.
  • You must own property which is considered as your main residence, available to you during any period within the 183-day provision.
  • The non-habitual resident will be exempt from income tax on income from a non-Portuguese source, provided the income is subject to taxation within the country of origin, but subject to any provisions of any double tax treaties.
  • Income derived in Portugal is generally subject to 20% PIT, presently a surcharge of 3.2% is applied, however this should be fully abolished within 2017.

The regime can prove beneficial for companies who wish to relocate to an alternative location and NHR can also prove attractive for individuals considering a life style change, pre-or post-retirement, owing to the beneficial taxation treatment of pension income.

Most types of pension income will be exempt from Personal Income Tax (PIT), subject to the provisions of any double tax treaty.

Most double tax treaties rights are granted to an individual’s country of residence, therefore in practice International Pension Income should not be liable to PIT. This system should enable Income to be sourced free from taxation, home state withholding taxes being applied.

A summary of the main Provision and Benefits of the NHR regime can be described as follows:

  • Normal wealth taxes do not apply together with the additional benefit of free movement of capital
  • Attractive financial planning opportunities exist utilising a combination of Investment Structures and Pension Planning.
  • Inheritance tax does not apply to assets held outside of Portugal. Any Portuguese situs assets passed to a spouse, descendants or ascendants, benefit from exemption to taxation.
  • A 10% fee may be payable in the form of a stamp duty on assets in Portugal passed to non-connected individuals.
  • Considerable taxation advantages can apply to NHR qualifying couples locating to Portugal in relation to Dividend Income and Capital Gains.  

In summary if you are considering a lifestyle change then a move to Portugal can offer considerable benefits and financial planning opportunities that most other European locations do not.

To maximise the benefits available professional guidance should always be sought at a very early stage in the planning cycle.

At Blacktower, we have been assisting clients in Portugal for over 30 years, based from offices located in Quinta do Lago and Cascais.

As one of Europe’s largest expatriate taxation and wealth management advisers, we are able to offer a comprehensive service assisting with all financial matters both here in Portugal and Globally.

Other News

Malta and Portugal have the best citizenship programmes

LighthouseWhen relocating to a new country, it’s good to know all your options so you can ensure you have the smoothest transition possible. For one thing, there’s the financial side to worry about.

This includes deciding on the best expat life insurance policy to buy as well as receiving expert pension transfer advice so that your retirement savings aren’t negatively affected by the move. 

Naturally, some nations offer a smoother residency transition, with Portuguese citizenship and Maltese citizenship among the best, according to research.

Understanding citizenship entry requirements

You will, of course, also need to be aware of the entry requirements for each country.

Several countries have systems in place with the goal of attracting expats who will be able to gain residency in return for an investment. In a post-Brexit world, these may be the best options for some overseas movers. Although not suitable for everyone, some of these systems are of a very high, reputable standard and hold a range of benefits for expats who are eligible. A recent survey has analysed which countries offer the best of these migration schemes, with people choosing to buy Malta citizenship and Portugal citizenship as a matter of priority.

What makes the best citizenship programmes?

Read More

Spotlight On … Cianon Yeo – Receptionist

Cianon YeoWhat is the most important aspect of your work, in relation to clients, or the part of your day-to-day role which gives you the most satisfaction?

I don’t have direct contact with clients unless they visit head office, and that’s become far less frequent over the last 18 months – I suppose the head office team are my clients and it’s my job to support them. As office receptionist my role has changed a lot since more of the day to day business interactions are taking place online and not face to face. But I keep busy by helping everyone in the office in whatever way I can, even if that’s just keeping them supplied with coffee! I get real satisfaction from being part of a team and knowing that I can help to ease someone else’s workload and make their day a little bit better.

Read More

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