Five things you should know about estate planning in Portugal
By International Adviser, 14 Feb 17
For British expats living in Portugal, or for those with Portuguese assets, the local equivalent of inheritance tax maybe relatively straightforward, says director of Blevins Franks Jason Porter, but succession law is very different. If advisers do not understand the rules, their client’s estate may not be distributed in line with their wishes or could attract more taxation than necessary.
A good start is getting to know the key features of the Portuguese system and how they might affect you.
Instead of inheritance or succession tax, Portugal charges a fixed ‘stamp duty’ of 10%. This applies only to Portuguese assets – namely real estate – passed on as an inheritance or lifetime gift, regardless of where the donor/beneficiary is resident. Spouses and direct family, however, are exempt from paying this tax.
While this is good news, note that Portugal takes a very traditional view of the family. Partners who are neither married nor in a civil partnership will pay 10% tax on Portuguese assets inherited or gifted between each other, as will step-parents and step-children.
However, after two years of living together, a couple can be considered married for tax purposes, so long as they have informed the Portuguese authorities. Legally adopted children will also be treated as direct family for stamp duty purposes.
Tags: Blevins Franks | Estate Planning | IHT | Portugal
