# Nhr



## stumo

Hello All.

Hope someone can help shed some light on the subject of NHR.
I appreciate that this subject has been mentioned many times but cannot see any answers to my particular questions.

I am a UK resident. I was a temporary resident in Portugal from 2005.(with the old green card) later changed to a bit of paper with EU stars on it.
However I returned to UK to live permanently in 2009, after selling my house and paying capital gains in Portugal. 
I was Tax resident in Portugal at the time, so I have a tax record which I can still access on Finances web site.
I did not inform SEF about my move, the way I saw it at the time was that my Temp residency would expire in 2010 anyway.

I bought a plot of land in 2016 to build a small house.
Intention was to remain a UK resident but just to winter in Portugal, as before.
The house build was started earlier this year and will be finished (I hope) in October.
It was when applying for the build license that I noted that I was still registered with my old accountants address in Portugal. So I changed it to a UK address in Nov 2017.(after sale of house in Portugal)

I would still like to have had the opportunity of remaining a UK resident but to winter (that means 5 months to me) but am concerned that Brexit might make this impossible. (90 day rule)

Despite my best efforts to understand what is going on I am still not sure of best course of action at this late stage (had hoped all would be clear by now).
I have thought about trying to obtain NHR, but see that one criteria is that you must not have been a tax resident in Portugal during the previous 5 years, and of course it looks as if I have been, in fact I have not been, as they were told of my reinvestment of property in UK when I paid capital gains. 
But the address the Finances was not changed to a UK address, and was left as my old accountants address to clear up any matters that might have arisen after the sale of my house. 
After paying the capital gain in 2009, I have not had any correspondence from the Portuguese Taxman.

So a few questions:
1) Will Brits be able to stay in Portugal for more than 3 months in any year after 30th March 2019?
2) After that date will we subject to entry stamping of passport in the EU, with restrictions on time?
3) Or does the talked about extension mean nothing will change before 2021.
4) If I applied for and was accepted under NHR would I still be able to have normal UK citizen access to UK NHS, (I would still own a property in UK where I would live when not in Portugal.

Sorry if all a bit vague, not really too sure which way to turn nor what questions to ask.
But all suggestions or advice will be appreciated


----------



## travelling-man

No-one can see into the future & nothing has been agreed until it's all agreed so there is no answer to questions 1, 2 & 3.

As for question 4: You can only be registered resident in one country at any one time and if you register as resident in Portugal before Brexit is complete then you'd be entitled to NHS care here & until Brexit is complete a Portuguese EHIC card will cover you in other EU countries but again, no-one knows what will happen after Brexit is complete. 

As for NHR status, you have to be a PT resident to get it & you have to apply in the same fiscal year as you register residency but the good news is you can now do apply online fairly easily & at no cost so if you do register residency then you can apply online & if they refuse you, you'll know why.  

Which isn't much of an answer but I reckon it's probably reasonably accurate.


----------



## stumo

thnks for reply travelling man.
I guess with me having had what is a Portuguese address on my fiscal card up until I changed it last year, my concern is that if I applied online, and if refused, there is no right of appeal, then I miss the chance of someone like my old accountant/ lawyer being able to talk with the authorities prior to making an application, to at least explain why the address did not reflect my Tax status (cant be a tax resident in previous 5 years from application date)


----------



## robc

stumo said:


> thnks for reply travelling man.
> I guess with me having had what is a Portuguese address on my fiscal card up until I changed it last year, my concern is that if I applied online, and if refused, there is no right of appeal, then I miss the chance of someone like my old accountant/ lawyer being able to talk with the authorities prior to making an application, to at least explain why the address did not reflect my Tax status (cant be a tax resident in previous 5 years from application date)


I would think this through very carefully before jumping in as you may find that Financas may/could/possibly will interpret this differently to the way in which you are.

1. They could justifiably argue that it is your responsibility to change the address out of Portugal. Your error.................... not their problem.
2. They could conclude that as you have a "registered" address in Portugal then you continued to be resident.
3. Following point 2 above, if they deemed you resident, where are your annual returns?
4. I think that you may be pinning your hopes on the fact that you invested money in Property outside of Portugal as demonstrating that you were not PT resident. That may, in the eyes of a Financas employee not necessarily follow.

I understand the "lure" of NHR, we applied in 2010 when it was in its infancy but I would be absolutely certain of what I was doing before "sticking my hand in the hornets nest" so to speak.
There is a groundswell against NHR and Golden Visa (Portugal News archives are a good place to start) 

HTH
Rob


----------



## RichardHenshall

robc said:


> ... 4. I think that you may be pinning your hopes on the fact that you invested money in Property outside of Portugal as demonstrating that you were not PT resident. That may, in the eyes of a Financas employee not necessarily follow. ...


Doesn't the rollover relief for capital gains relief only apply to the principal dwelling? Therefore, if the rollover into a UK property was accepted it would/should imply a recognition that the OP was becoming non-resident - even if there were failures in other communications with AT.

It's also possible that the OP was correctly recorded as non-resident with the accountant used as a fiscal representative.


----------



## stumo

hi
You raise very valid points, and its interesting that you did.
I had also considered the `traps`just as you say about being deemed a resident. 
That would not have been issue until I bought a plot of land, now I am more vulnerable than before. (Remember the great Offshore property ownership fiasco of the. I bought a house under those rules, and was very lucky to get rid of it just before the rules changed (more luck than judgement).
So yes I am aware that rules can change very quickly, when it suits them, and the NHR does look it could develop into exactly the same, ie put out a net, wait til its full, blame someone else that you have to pull it in, and reap the rewards.
These have been my thoughts for a couple of years now, hence my not having jumped into it.
As you appreciate its difficult to approach the local Finances, a) because they are probably not so aware, and b) In case I walk into something I would rather not.

I was hoping when I started this house that the terms of Brexit would by now have been more concrete and understandable, but that not being the case, and as I dont want to be a full resident in Portugal ever again, it may be that I just flog the house when I have the HL.


----------



## robc

RichardHenshall said:


> Doesn't the rollover relief for capital gains relief only apply to the principal dwelling? Therefore, if the rollover into a UK property was accepted it would/should imply a recognition that the OP was becoming non-resident - even if there were failures in other communications with AT.
> 
> It's also possible that the OP was correctly recorded as non-resident with the accountant used as a fiscal representative.


I would not disagree with these sentiments at all, it may be sensible to be 100% certain before entering into that wonderful world called Portuguese Officialdom !!
Pandoras Box has nothing on some of the stunts pulled or attempted by the local fiefdoms 

Rob


----------



## stumo

Rob
It sounds that, like me, you may have had first hand experience....
Last house I built and sold fell into another carry on. I built a house, but made a few changes to the approved plan, no worries, chatted with local town Hall planners and they had no probs. So put in the alterations for approval, only prob was that they were a bit slow in giving that approval, to such an extent that I had to decide to let the builder work to the non approved plans or the job would have stopped....no worries, so he worked to new plans. the house got finished and I needed to apply for the vistoria, but still no approval of alterations.
When they came to do the Vistoria they had the approval with them and it passed the vistoria, a HL was duly issued. 
Then when I came to sell it, as I had already moved back to UK, I was unaware that the camara had taken me to court , without my knowledge, and fined me for having built without approval. They had photos, taken and date stamped, THE DAY BEFORE THE VISTORIA, and therefore before the alterations were approved, and because I had not paid the fine (couldnt because they had given the registered letter to a neighbour) they put a Hold notice against my house, so I had to pay to get that removed before I could sign a Promissary Contract !!!


----------



## robc

Hi Stumo

Yes. More than I care to remember. 
There is no such place as nirvana, challenges abound but to be frank I would prefer that when something is written down it is then adhered to.

That's life I guess


Rob


----------



## stumo

Couple of other scams readily come to mind....Duty to import your own car into another EU country, and a few years ago the scam of adding VAT to new car tax, a tax on a tax, I got caught with that one as well, no chance of getting it back


----------



## stumo

RichardHenshall said:


> Doesn't the rollover relief for capital gains relief only apply to the principal dwelling? Therefore, if the rollover into a UK property was accepted it would/should imply a recognition that the OP was becoming non-resident - even if there were failures in other communications with AT.
> 
> It's also possible that the OP was correctly recorded as non-resident with the accountant used as a fiscal representative.


 I can only guess thats what happened. After I sold up and left Portugal I had no reason to check any addresses that were recorded there. It was my primary residence in Portugal and the house I bought in UK was likewise my only house on the planet. And having heard nothing from the Finances I had no reason to check anything. I cant really remember, but all I can remember is that I sent of my Land registry docs for my new house in UK, to the accountant, and asked her to present it to the Finances, which she did, only to tell me that Finances were not interested in it. So much for cross border checking. Of course at this time neither NHR or Brexit existed.


----------



## Pgmills

If you don’t want to be a Portuguese resident again, the NHR issue is a red herring. You can only get the international tax benefit of this scheme by extracting yourself from the clutches of HMRC and you can only do that by meeting the rules on UK tax non-residence which include not being in the UK for 183 days or more (plus a number of other hurdles).


----------



## Ukkram

Not sure about UK tax rules but PT has tax splitting whereby you only Report earnings from the day of arrival in PT. 
When I left South Africa I had to pay tax on earnings and CGT on the "deemed" sale of securities (investments) up until the day I left. The deemed sale of my shares were considered re-purchased on the day of arrival here at the same price. So effectively I started on a clean slate in PT.


----------



## Pgmills

CGT in Portugal is payable on property gains whether you are resident or non resident. Residents may roll over the gain but the new property is still pregnant with the original taxable gain.


----------



## stumo

Pgmills said:


> CGT in Portugal is payable on property gains whether you are resident or non resident. Residents may roll over the gain but the new property is still pregnant with the original taxable gain.


Hi
I do not think that is strictly correct. I believe at the moment anyone from within the EU can elect to be taxed as a Portuguese resident. ie have rollover to another property. But that new property must be located within any EU country.
The alternative for a non resident is to elect to pay 28% CGT. 
Of course if its a second/holiday home then CGT would also be payable in UK as well, but relief is given if tax was paid in original country of sale.


----------



## RichardHenshall

stumo said:


> ... I believe at the moment anyone from within the EU can elect to be taxed as a Portuguese resident. ie have rollover to another property. ...


Doesn't that also require you to declare all your other worldwide income and gains to Portugal. If so, would you not be as well to become a resident (with NHR)?


----------



## Pgmills

I don’t think that one can elect to be tax resident anywhere. Tax residence is a matter of fact. The original point you made was that you didn’t want to be Portuguese resident and the EU point relates to where a resident can rollover their gain to not their nationality.


----------



## stumo

hi
No I am not saying that.
As I understand it, I, as a *non resident of Portugal*, would be able to decide:

a) To just pay non resident CGT at 28% on the simple gain, or

b) To use the rollover system, where you would need to reinvest in another Main home, within 3 years, and that property must be in an EU country. 
In this case you pay tax at the normal rates applicable in Portugal on 50% of the gain.
The possible downside to this is that you have to declare your worldwide income in the year of sale, which is added to the gain, and then taxed at relevant rates in Portugal.

Other issue today is that UK will not be in the EU after end March 2019, so I doubt this will be an option after then.

(A resident of the European Union may choose to be taxed as a Portugal resident, but then the person must declare his worldwide income and so calculate the marginal rate of tax that will apply to the gain.)


----------



## Pgmills

Now I understand your point. As you say the tax liability could currently be rolled over in that way and (subject to the Brexit out come) be a liability of your estate in due course.


----------



## robc

OK So just a very gentle hijack of the OP thread but this may interest to some

https://www.telegraph.co.uk/news/20...ve-tax-break-lure-retirees-including-britons/

I am quite partial to pasta and chianti 

HTH

Rob


----------



## Pgmills

That is exactly what the nhr status here gives you.


----------



## robc

Pgmills said:


> That is exactly what the nhr status here gives you.


Ah yes but those of us who were early adopters will be coming to the end of the 10 year period with no renewal (despite assurances to the contrary) and so a chance to go elsewhere............well it may prove very tempting

Rob


----------



## uk03878

robc said:


> OK So just a very gentle hijack of the OP thread but this may interest to some
> 
> https://www.telegraph.co.uk/news/20...ve-tax-break-lure-retirees-including-britons/
> 
> I am quite partial to pasta and chianti
> 
> HTH
> 
> Rob


I saw that in The Times yesterday - very interesting


----------



## stumo

uk03878 said:


> I saw that in The Times yesterday - very interesting


The EU imploding on itself. Nothing new there then.


----------



## rednikola

*NHR-Witholding tax claim*

Hello everyone,
I'm planning my move to Portugal under NHR status. My question is, 
Switzerland Banks apply witholding tax to interest income of EU residents (including Portugal), at 35% rate. Considering that I will have NHR status and interest income is supposed to be tax free under NHR, will I claim this withholding tax from Portugese Government? 
Does anyone has a similar situation, or any insight ?

Thank you for all input


----------



## stumo

good luck with that!!!!!


----------



## Ukkram

rednikola said:


> Hello everyone,
> I'm planning my move to Portugal under NHR status. My question is,
> Switzerland Banks apply witholding tax to interest income of EU residents (including Portugal), at 35% rate. Considering that I will have NHR status and interest income is supposed to be tax free under NHR, will I claim this withholding tax from Portugese Government?
> Does anyone has a similar situation, or any insight ?
> 
> Thank you for all input


Most double tax treaties are a copy and paste. Tax treaties cap interest at 10%. So if you are paying a withholding tax on interest in the source country then they may not deduct more than 10%.This in turn leaves Portugal nothing to tax NHR or not.

This is according to the 1976 tax treaty but I believe it was modified in 2013 or so to state that no more than 0% tax can be charged for interest. So neither country can claim tax on it. 

Once you have residence status in Portugal you must inform your bank/broker that you are no longer resident in Switzerland and the tax treaty rules must apply.


----------



## rednikola

*update*

thank you for the answer, after talking to the bank I found out that unless its an interest payment from a Swiss company, there is not a withholding tax
since agreement of information exchange. Every tax payer is obliged to declare and pay at his country of residence, and since info is transparent now, wht is no longer necessary.


----------



## Ukkram

What does "wht" mean?


----------



## rednikola

wht=witholding tax

About getting the NHR status,
My wife and child is EU citizen, I hold a managerial job in Russia that doesn't 
require me to be in Russia much, would I quality for NHR?
If I do qualify , would I pay 20% tax on my salary from the 
Russian job, even though the job has no Portugese connection?


----------



## Ukkram

Foreign-source employment income will be exempt from Portuguese tax as long as it is liable to tax (at whatever rate) in the source country either under a double taxation treaty or under the OECD model tax convention, and is not deemed Portugal-sourced under applicable Portuguese law.


----------



## stumo

I see the French Tax authority is about the change the rules for French NHR`ers.
That will take the heat out of the Algarve property market.

https://www.algarvedailynews.com/ne...to-tax-her-non-habitual-residents-in-portugal


----------

