# Professional advice ref: moving UK monies into the Portuguese system?



## Nostro (Dec 11, 2020)

Hi looking for professional advice ref moving money from my UK Bank in total into Portugal & the implications for Tax purposes within the Portuguese system etc: etc: 
I have not been residing in the UK for for many years & do not pay any Tax or contribute to the UK system.

Thanks!


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## Nostro (Dec 11, 2020)

I have just had 1 reply from "timothygiftchel" via eMail header "Expat Forum For People Moving Overseas And Living Abroad <[email protected]>
timothygiftchel referred me to [email protected]
question: why does it reflect on the FORUM that I have "0" responders & yet I have been contacted by "timothygiftchel" am I not understanding things?
What is going on? Should I be concerned? 
thanks.


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## Nostro (Dec 11, 2020)

Only later did I read that ALL communications should be addressed via this FORUM. 
Ofcourse I am wiser & "timothygiftchel & matthewrink45 can skate off


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## TonyJ1 (May 20, 2014)

Nostro said:


> Hi looking for professional advice ref moving money from my UK Bank in total into Portugal & the implications for Tax purposes within the Portuguese system etc: etc:
> I have not been residing in the UK for for many years & do not pay any Tax or contribute to the UK system.
> 
> Thanks!


There are no capital restrictions in moving capital from the UK to Portugal. If it is capital, it is not subject to tax, though potentially the tax authority or your local bank may ask for explanations on how your capital arose.

If you are earning any return, then it will be subject to tax in Portugal if you are a Portuguese tax resident. You maybe able to limit tax charges by registering for the 'non habitual tax' resident status, if you qualify. With this status, interest (you should be so lucky) and dividends from a UK source would be tax free in Portugal for a period of 10 years.


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## RainbowMan (May 30, 2018)

TonyJ1 said:


> There are no capital restrictions in moving capital from the UK to Portugal. If it is capital, it is not subject to tax, though potentially the tax authority or your local bank may ask for explanations on how your capital arose.
> 
> If you are earning any return, then it will be subject to tax in Portugal if you are a Portuguese tax resident. You maybe able to limit tax charges by registering for the 'non habitual tax' resident status, if you qualify. With this status, interest (you should be so lucky) and dividends from a UK source would be tax free in Portugal for a period of 10 years.


NHR is now taxed at 10% for 10 years. This changed in March/April of this year.


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## TonyJ1 (May 20, 2014)

RainbowMan said:


> NHR is now taxed at 10% for 10 years. This changed in March/April of this year.


Pensions are taxed at 10%(private pensions), but the rest remains as was. eg interest, dividends, rents, royalties, capital gains on fixed properties in the main continue with the same benefits


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## Guifig (Jan 7, 2021)

When it comes to interest under the NHR, it needs be looked at on a case-by-case basis as not all "interest" are equal. It really depends on the definition of interest under the PT/UK double tax treaty.


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## TonyJ1 (May 20, 2014)

When it comes to interest under the NHR, it needs be looked at on a case-by-case basis as not all "interest" are equal. It really depends on the definition of interest under the PT/UK double tax treaty 

For Portuguese tax returns, the relevant definition would be the Portuguese tax code rather then the definitions on the double tax treaty. To claim relief and or benefits from withholding taxes, then the treaty would be the starting point


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## Guifig (Jan 7, 2021)

TonyJ1 said:


> When it comes to interest under the NHR, it needs be looked at on a case-by-case basis as not all "interest" are equal. It really depends on the definition of interest under the PT/UK double tax treaty
> 
> For Portuguese tax returns, the relevant definition would be the Portuguese tax code rather then the definitions on the double tax treaty. To claim relief and or benefits from withholding taxes, then the treaty would be the starting point


I agree unless it is UK-sourced interest. In this case, under the NHR, you need to look at the PT/UK double tax treaty to know whether such income qualifies as interest or not.


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## TonyJ1 (May 20, 2014)

The definition for nhr purposes is what is in the Portuguese tax code rather then the definitions in the double tax treaty


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## Guifig (Jan 7, 2021)

TonyJ1 said:


> The definition for nhr purposes is what is in the Portuguese tax code rather then the definitions in the double tax treaty


For PT-sourced income yes, but not for foreign-sourced income


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## TonyJ1 (May 20, 2014)

Besides salaries and self employment income (if from a high value added occupation) (which can be from a Portuguese source - and no reference to any double tax treaty), only foreign sourced (exception if on the Portuguese black list) income may benefit from the nhr provisions.
For example, if there is no double tax treaty, the provisions of the nhr rules, read together with the rest of the income tax code will apply eg income from Australia, New Zealand, etc ie if it satisfies the income tax code definitions - no reference to the specifics of any double tax treaty


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## Guifig (Jan 7, 2021)

TonyJ1 said:


> Besides salaries and self employment income (if from a high value added occupation) (which can be from a Portuguese source - and no reference to any double tax treaty), only foreign sourced (exception if on the Portuguese black list) income may benefit from the nhr provisions.
> For example, if there is no double tax treaty, the provisions of the nhr rules, read together with the rest of the income tax code will apply eg income from Australia, New Zealand, etc ie if it satisfies the income tax code definitions - no reference to the specifics of any double tax treaty


Not entirely correct. If there is no DTT, you need to take the OECD model treaty into account...


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## TonyJ1 (May 20, 2014)

When you complete the Portuguese income tax return - this should be completed as requested in the tax return - this will be in accordance to the definitions in article 5 of the code and not as per article 81 of the code (nhr rules). In practice both interest and dividends are not subject to further taxes in PT under the nhr regime. The only instance that I can think of that it could be of concern is if it is a capital distribution, but this would have to be considered in terms of the tax code and not in terms of the double tax treaty


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