UK expats still attracted to Europe despite Brexit
By Robbie Lawther, 4 Jul 19
Financial adviser network Blevins Franks discusses the three countries that keep Brits interested with their attractive lower costs of living, tax breaks, insurance bonds and non-resident tax schemes.
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Portugal
Once an expat joins the 39,000 Brits resident in Portugal, they are liable to Portuguese tax on worldwide income and certain capital gains, as well as for some ancillary taxes (on revenue obtained from goods or services), so they need to be prepared for this.
Expats are usually considered tax resident after 183 days in Portugal, but it can be earlier – potentially even the day they arrive – if they relocate with the intention of making it their home.
“Be mindful of the residency rules in the UK” said Porter. “New rules were introduced from 6 April 2013.
“As an example, you could unintentionally trigger tax residency and come back in line for British taxes again after just 16 days there.
“If you plan ahead and have flexibility, it is possible to time your change of residency to minimise tax liabilities – and maximise opportunities – in both countries.”
Expat residents can enjoy significant tax benefits for their first 10 years through Portugal’s ‘non-habitual residence’ (NHR) regime.
To qualify, expats cannot have been resident within the last five tax years and should apply through the local tax office soon after their arrival.
“Besides offering a fixed 20% income tax rate to those employed in ‘high value-added’ professions, NHR lets you receive some foreign income – like UK pensions – tax-free,” said Porter. “You could also pay no Portuguese tax on gains from UK property.
“Even outside of NHR, Portugal can be highly tax-efficient for expatriates.
“While earnings are taxable at progressive income tax rates up to 48%, there are often fully compliant routes to lower taxes on investment and pension income, given the right financial advice.”
Tags: Blevins Franks | Expat | France | Portugal | Spain
