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Viewing posts categorised under: Non-habitual residency in Portugal

Tax efficient savings in Portugal

By Mark Quinn - Topics: non-habitual residency in Portugal, non-habitual resident, Portugal, Tax Efficient Savings, Tax in Portugal, UK ISA
This article is published on: 22nd December 2021


If you have arrived in Portugal from the UK there is a hope, or perhaps expectation, that there will be savings options similar to an ISA and other tax efficient investments.

Portugal does not have an ISA system but there is a similar investment, sometimes referred to as the “tax efficient, Portuguese compliant bond”. It is tax free whilst invested and has a very beneficial low taxation basis, especially if you require income from your investment.

The two big advantages with this structure are that there is no limit to the amount you can invest and it is portable to most other countries if you decided to move in the future.

There are many investment and currency options, so it is a simple and effective way of building a Portuguese compliant tax efficient savings structure to meet your personal objectives and needs.

Even if you have moved to Portugal to just take advantage of NHR (Non Habitual Residence status), and wish to return to your home country in the future, these structures can provide an incredible planning opportunity.

For example, if you return to the UK and the appropriate restructuring advice was to surrender the investment, the tax due on surrender would be proportional to the amount of time you have been in the UK. So, if you were non-UK resident for the whole period of ownership, then no tax is payable. If you were non-UK resident for 8 out of 10 years of ownership, the tax will only be calculated on the 2 year period of UK residence meaning you would benefit from an 80% tax saving!

For more information on the tax efficient, Portuguese compliant bonds, please contact us.

Non-Habitual Residency in Portugal

By Mark Quinn - Topics: non-habitual residency in Portugal, Portugal
This article is published on: 29th November 2021


What is Non-Habitual Residency (NHR)
and can I apply?

The Non-Habitual Residence (NHR) scheme is a 10 year beneficial scheme of taxation introduced to encourage individuals to come to live and work in Portugal.

Provided certain conditions are met, the primary scheme benefits are:

  • a 10% flat rate on non-Portuguese sourced pension income. Some forms of UK pension income, generally government service pensions, will always be taxed in the UK
  • tax free interest and investment income generated outside of Portugal
  • tax free capital gains generated outside of Portugal
  • 20% flat rate tax on earned income (self-employed or employed) for those with a qualifying profession. There is a prescribed list of qualifying professions

To meet the eligibility requirements, you:

  • must not have been tax resident in Portugal in the last 5 years
  • must have a permanent residence in Portugal. This residence can either be rented or owned

Applications for NHR must be submitted by the 31st March following your permanent arrival in Portugal.

If you are moving to Portugal, planning early is the key to favourably positioning yourself and obtaining NHR is highly advantageous as the tax savings can be very significant.

Having said this, whilst in the vast majority of cases NHR is beneficial, we have come across instances where NHR would have actually increased a clients’ tax liability.

We have written a detailed guide on the NHR regime that is available on our website. However, seeking advice is crucial and we welcome you to contact us.