# UK Salary and Tax vs. Portugal NHR



## SteveAbroad (11 mo ago)

Hi everyone! I would love some advice and I am sure UK salaried people have had to navigate this.

I have a house in Portugal and UK, and split my time between both countries. I receive a salary in the UK and pay my tax there. I also have NHR and am about to prepare my tax return for Portugal, where I spend the majority of my time (>183 days a year) 

As my income was taxed in UK, under the dual tax treaty, it shouldn't be eligible for tax in Portugal (although I will still owe capital gains tax on shares, any tax due etc.).

However, I am trying to determine if I continue the UK setup to minimize my disruption to my employer or if I formally notify HMRC and move my tax position to Portugal. But then my tax code in UK changes to no-tax and it impacts my employer, who will likely change my contract / move me to Portugal etc.

Is it possible to keep my UK salary and pay tax on it in the UK without causing any issues?

And, is it possible to claim a tax refund for days outside of the UK and use it to pay Portugese tax / benefit from lower tax rate?

Any advice on navigate these two scenarios


UK - continue with PAYE salary tax on income Portugal - rebate and pay tax herePROS• Easier to apply for a new UK job
• No employer disruption
• No risk of salary adjustment etc.•20% tax rate for salary = approximately £8-10,000 extra a year CONS• Ongoing UK tax rate
• Potential untaxed UK salary and shares at 20% in portugal• In the portugese system full-time
• Disruption to job / social security
• Tax complexity / risk 

Thanks


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## yonge7 (7 mo ago)

Did you ever receive a reply? I want to do something similar. Will it for sure be 20%, as I am looking for zero %!


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## Bevdeforges (Nov 16, 2007)

SteveAbroad said:


> Is it possible to keep my UK salary and pay tax on it in the UK without causing any issues?
> 
> And, is it possible to claim a tax refund for days outside of the UK and use it to pay Portugese tax / benefit from lower tax rate?


Basically you don't get to choose where you pay your taxes. If you are considered tax resident in Portugal, you pay your taxes (and social insurances and other employment charges) there. You need to check the Portuguese rules on tax residence, but generally speaking, you're tax resident in the country in which you are physically present while doing whatever it is you are paid for. (You should also check the UK-Portugal tax treaty for the details on how this works.)


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## Moulard (Feb 3, 2017)

Expanding on what Bev says..

For Dependent Personal Services (ie. employment) your income is generally considered sourced where you are performing the work, not where the employer is located.

So if you were in Portugal the income would be considered sourced from Portugal

If you were were a tax resident of Portugal...


The UK could withhold income tax at a non-resident tax rate according to her domestic laws
Portugal would tax your global the income according to her domestic laws
The double taxation that would result would be addressed in the tax treaty.

Typically what happens is one country will give you some form of tax relief for the taxes paid to the other country up to the amount that you would owe. In practice what this means is that you end up paying the higher of the two tax liabilities (sometimes split between the two countries)

Here is a link to the treaty.

UK/Portugal Double Taxation Convention signed on 27 March 1968 (publishing.service.gov.uk)

Articles of interest to you specific to residency, employment and elimination of double taxation are Articles 4, 15 and 22.


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