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Keeping the NHR Tax Regime Could Be Good for Portugal in 2018

It now looks like both existing expat residents as well as those on the cusp of making the move will continue to enjoy the NHR’s tax-free pension income status as well as tax-free interest, tax-free non-resident dividends and tax-free royalties; it is worth noting that the latter of these things is of particular interest to high profile expat entertainers and musicians such as Madonna, Monica Belluci and Eric Cantona.

So, as 2018 moves swiftly on, expats can feel reassured that they will continue to enjoy ten years of the following benefits from the NHR scheme:

  • No minimum investment requirement
  • Tax-free royalties, interest and dividends
  • Tax-free lump sum or regular income pensions
  • 20% flat rate tax on high value activity

Keeping Portugal appealing for expats

The apparent about-face regarding the NHR regime means that Portugal remains the leader when it comes to favourable wealth management and residency planning jurisdictions. It also means that the country has every reasonable expectation of again finishing at the top of the pile of an exhaustive list of the most desirable countries in the world to migrate to, following on from its success in topping a 2017 survey.

The survey, which was carried out for the third year in a row, was administered by Henley & Partners, a UK-based firm that specialises in fiduciary-based citizenship planning. It looked at the relative merits of various country’s immigration and residency programmes and then ranked them accordingly.

Although the Southern European archipelago of Malta outperformed all challengers when it came to the attractiveness of its investment schemes enabling citizenship in exchange for a minimum level of investment, Portugal’s golden visa scheme ensured it finished top of the list of countries which allow residence in exchange for investment.

Each country’s residency-by-investment attractiveness was based on scores out of 10 for the following categories:

  • Lifestyle
  • International standing
  • Visa-free access
  • Visa processing times
  • Quality of visa processing service
  • Financial and taxation requirements
  • Bureaucratic and financial transparency
  • Residency requirements
  • Compliance
  • Relocation flexibility
  • Physical visit requirements

Portugal’s outstanding candidacy was founded on the strength of its Golden Residence Permit Program and earned a score of 79 out of 100, meaning it finished one point ahead of Austria and two points ahead of Belgium.

Those who currently enjoy the many benefits of expat life in Portugal are likely to agree with the findings of the survey while also taking enormous relief from the fact that the Portuguese government has appeared to accept that expat money is invaluable to the country’s economy and that every accommodation should be made to ensure the influx of expats is encouraged.

However, the alarm provoked by the proposed changes to the NHR programme should remind expats in the country of just how quickly things can change. Whatever happens, sound wealth management advice remains the best way to plan for a secure and prosperous financial future.

Other News

The EU Referendum


FRIDAY 24 JUNE 2016: The British electorate has given its verdict on the UK’s membership of the European Union in no uncertain terms. In spite of the more emotional appeals to the contrary, this is not a disaster. On this extraordinary day, it is worth remembering that on the 20 February 2016, when David Cameron announced that the EU referendum would take place, the FTSE 100 index was at 5950, the 10 year Gilt yield stood at 1.41% and the sterling/dollar exchange rate was 1.44. At lunchtime on Friday June 24 the FTSE 100 is trading at 6060, the 10 year gilt yield is 1.07% and the dollar exchange rate is 1.37. On the face of these numbers you could be forgiven for not knowing what has taken place in the past 24 hours.

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NEWS WRAP – Shadow Foreign Secretary’s Plan for Public Sector Pensions

Money BagLabour MP for Islington South and Shadow Foreign Secretary Emily Thornberry has published an article for Politics Home in which she calls for greater pensions freedoms for public sector workers.*

Written as part of her failed leadership campaign, the article named five major policy areas she felt the party needs to address in the future: climate crisis, the NHS, Social Care, affordable housing, and pensions.

In fact, the article was largely concerned with the issue of public sector pensions as Ms Thornberry warned that the country faced a “ticking time-bomb” in respect of the sums which will become payable in future decades. She quoted a 2017 estimate which suggested that public sector pension liabilities had a £1.7 trillion shortfall. She said that the public currently spends around £40 billion a year meeting this gap.

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