# Trust in Portugal?



## unhep (Nov 18, 2015)

Hello Everyone, 

I am new to this forum and like every new person I come seeking advice.

My Grandmother recently passed away and she left some properties in Portugal to my Father who is a Portuguese citizen, although we live in South Africa.

He would like to set up a trust to take ownership of the assets left to him.

How do we go about this? Is it at all possible?


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## TonyJ1 (May 20, 2014)

If you Grandmother passed away, then if your father is the sole heir he automatically becomes the owner, if there are other siblings, they also inherit - you cannot disinherit a child, except in very exceptional circumstances. Though the formalities of establishing the right to the inheritance and registering the properties into his name needs to be done. In other words, he already owns these assets though the title deeds might not formally reflect this.

The concept of a trust as such is an Anglo concept and not recognised under Portuguese law (there are exceptions that have been brought in by legislation e.g. Madeira Business Centre legislation).

He can donate the land / property to his children / grandchildren without any taxes - there is some stamp duties on documents and such but these are minor. However if he donates these assets outside this immediate circle, it is subject to donations taxes. As he is resident in South Africa, he is subject to donations tax in South Africa even if the assets are in Portugal. There are also restrictions on donations e.g. he needs to keep enough assets to maintain himself and he may only donate a fraction (off memory, a maximum of a third) of his assets. If your mother is still alive, she may have rights to these assets as well - depends on the marriage regime, etc.

If he donates, say, to a company owned by an offshore trust, he will be subject to donations taxes. The company itself maybe subject to deemed income taxes. Depending where the company is registered, the property taxes (SA= rates and taxes) on property can be as much as 20 or 30 times greater than on an individuals name. There are other structures that can be utilised, but unless we are talking of great wealth, best to keep it simple.


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## unhep (Nov 18, 2015)

Thank you for the quick reply Tony! Great assistance.


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