Golden visa Portugal

[PortugalDilemma]

My husband wants to move abroad because of the possible tax increases coming up - we have a lot of assets that he fears Labour will tax again in one form or another, having already paid ££££ in tax (from the sale of a business) and he’s also worried about the children having to pay inheritance tax in the future.

I don’t want to move abroad, mainly because of elderly parents who thankfully are doing well at the moment but who knows what’s around the corner (he doesn’t care so much about his family). Also I think just pay the tax - the children will still have more money than most people would have in their lifetime after paying IHT. And why worry about something that hasn’t happened yet (tax rises) and something that could change again in the future anyway with a different government.

He’s seen that we can get a golden visa for Portugal and get citizenship in 5 years so that if we need to move we’re all set to go.

Just wondered if anyone has done this/is in the process of doing this and if anyone has any advice. Is it as easy as he makes out?

Thank you.

The Portuguese government is in the process of changing the rules around the Golden Visa and uping the time for citizenship from 5 years to 10 years. To get citizenship you also need to demonstrate proficiency in Portuguese language

getgoldenvisa.com/portugal-golden-visa-program

Thanks for your reply. I don’t think my husband knows about the proposed changes to the length of time it takes to get residency. I’m not worried about learning the language - it says a basic level is sufficient and we know people from Portugal who could help us learn.

Correct me if I’m wrong but are you confusing citizenship and residency?
As a resident you will become a tax resident and pay tax on your worldwide wealth to Portugal.
I’m not sure if they have a dual taxation agreement with UK like Spain do.
What are considered the benefits of citizenship over residency?

If you become resident in Portugal you will pay tax on your worldwide income including CGT. You would need to speak to an international tax advisor before coming to a decision as tax may be more than you would pay in the UK depending on your unique situation. Without knowledge of your personal situation it is impossible to advise you on that.

IHT in the UK is based on domicile rather than residence, so even if you are resident in Portugal, you can become liable to IHT on death or on lifetime gifts if you have not taken the necessary steps to remove your UK domicile. Again, you need specific advice regarding your circumstances from a suitably qualified professional with knowlege of the tax in both jurisdictions.

It would be citizenship first. I understand we would have to pay taxes if we lived there and we would have course get advice re tax and the whole thing in general.

I think my husband wants free movement around the EU - funnily enough he voted for Brexit (I was against)!

You are taxed on world wide income ...
What's wrong with paying tax anyway? Surely we all should in a civilised society.

The guides produced by these people are quite useful as research when you are at the planning stage Living In Portugal, Tax-Efficient Solutions | Blevins Franks

Two thoughts

1. If it helps in the decision making process, you haven’t mentioned healthcare as a factor to be weighed in the balance and this becomes more important as you age. You may well be more likely to have access to decent healthcare (by European standards, not the lower British ones) if you move - probably far greater likelihood of surviving anything nasty and an eventually more pain free death in Portugal. Survival rates for almost any serious disease are better out of the U.K.
2. On IHT and the tax hit especially given the changes coming to count your pensions as part of your estate, bear in mind that if you stay your descendants may be faced with an enormous tax bill well before they can realise any assets to pay it - if you don’t want them to have to take out a loan etc you may consider taking out insurance. But it’s very expensive. That said, you need advice about what the comparative tax bill would be in Portugal.

For those saying you ought not to worry and just pay more tax, there cones a tipping point at which someone who has worked 18 hour days for years , paid tax already at high rates on all their income and donated generously on top of that says No. I didn’t work like a dog to spare my kids from want to have the government take the bulk of my already taxed assets. Such people leave the country taking their wealth with them. That serves none of us.

Think your husband needs to do A LOT more research and get advice specific to your needs … not just listen to Dave in the pub.
🥴

Thanks again everyone. I do know we would need to spend some time looking into this properly and not doing it in a whim. I’m of the opinion that we just pay whatever tax we need to but he’s of the opinion he’s worked very hard to earn this money and has already paid lots of tax already (he has/we have to be fair).

Portugal isn’t some sort of tax haven though ? He will still have to pay tax (up to 47%) depending on wealth.

We are looking to do the same, for a variety of reasons, tax and assets being one. But to really benefit from moving to portugal, you need to find out how you can qualify for NHR 2.0. Only then can you have a low tax rate and not pay taxes on foreign assets. It only lasts for 10 years though. Otherwise, portugal taxes are higher than the UK though they do not have the idiotic IHT so there is that.

It can be if you qualify for NHR 2.0

So Portugal is going to be taxing foreign pensions on the new NHR 2.0, correct? (Where it had not taxed them previously?)