How much tax will I pay in Portugal? UK versus Portugal tax (2024)

Even if you cannot qualify for NHR or NHR 2.0, Portugal can still be an attractive place to live from a tax perspective.

Quick wins in Portugal compared to the UK

o Wealth tax – 0%
o Inheritance tax – 0%
o Succession tax – 10% but not for direct line ascendants or descendants and only applicable on Portuguese assets if it does apply
o Income tax similar to UK
o Structuring investments – it is possible to live on very low tax rates using structures such as the Portuguese Compliant Investment Bond (PCIB).

Standard rates of income and capital gains tax can be comparable or better than the UK, depending on each person’s situations and asset sources.

Employment and self employment income
UK - 20%, 40% or 45%
Portugal - 14-48%

Interest
UK - 20%, 40% or 45%
Portugal - 28% (35% blacklisted jurisdictions)

Dividends
UK - 8.75%, 33.75% and 39.35%
Portugal - 28% (35% blacklisted jurisdictions)

Pension income
UK - 20%, 40% or 45%
Portugal - 14-48%

Trust income
UK – 38.1% or 45%
Portugal - 28% (35% blacklisted jurisdictions)

Capital gains tax – non property

UK – 10% or 20%
Portugal – 28%, if held more than 365 days

Capital gains tax –property

UK – 18% or 24%
Portugal – 50% of gain added to income and taxed at progressive rates

Visas and tax

No relationship

Planning needed

Irrespective of which position you are in, planning is required, ideally before your leave your current country of residence as this will allow you to take advantage of allowances an exemptions in both counties.

For example, for some qualifying for NHR it may be more attractive to take part or all of your pension income in the UK before relocating to Portugal, for others it would be beneficial to take post relocation depending on each person’s position.

Another example relates to the sale of one’s UK main residence. Under NHR or NHR 2.0, there would be no tax on the gain in the property in Portugal whereas under standard tax regime, there would be tax due on the full gain, so ideally you would want to sell the property prior to leaving the UK.

IMPORTANT – PLEASE READ REGARDING THIS CHANNEL

The content on this channel is for educational and information purposes only. It should not be relied on as advice, and you should always take qualified advice before making any changes to your personal position.

Whilst I have experience in the financial and tax industry, this channel is for recreational purposes and is not an advertisement for my business or services. Its purpose is to share quality information.

Whilst every care is taken as to the accuracy of the information in these videos, the information provided is based on the understanding of the rules at the time, and rules can change with little or no notice.

Whilst I cover a wide range of issues on the channel, in my professional role I specialise in tax efficient investments, UK and overseas pensions, estate planning, and wealth management for expatriates based in Portugal. Unfortunately, I do not offer visa or tax return services, nor can I assist US nationals.

*Thank you for your support and understanding. I hope to continue to provide you with valuable information to help you with your life in Portugal. If you have any suggestions for content you would like to hear, please let me know*