Portuguese residency - current situation - advice needed

[Graham376]

The bit I don't like is - While expatriates can currently transfer tax-free, beware the UK could start imposing a 25% ‘overseas transfer charge’ on EU/EEA transfers post-Brexit. So, what will happen when Mr. Average used his credit/debit card to draw cash when abroad on holiday?

Most of these articles are aimed at those who emigrate from the UK whereas many of us are still tax resident in the UK and the dual tax agreement avoids paying Portuguese tax. Lets hope that doesn't change.

 

[RAI]

Just a question. Can a Portuguese resident legally own/drive a UK registered vehicle? Is a new Portuguese resident not supposed to register his motor vehicles in Portugal?

 

[RAI]

Another small note. Double tax agreements usually only apply to earned income, I.e. income tax. Pensions and inheritance are separate?

 

[Graham376]

Just a question. Can a Portuguese resident legally own/drive a UK registered vehicle? Is a new Portuguese resident not supposed to register his motor vehicles in Portugal?

No, once resident not allowed to drive foreign plated cars and any UK car here should be imported. In theory, there's a reduced import duty on cars owned by very recent residents but in practice, doesn't always work. A mate was told he would have to pay €8k duty on his €1k value Merc. It's possible the reduced rate only applies to those immigrating, rather than just becoming resident.

 

[Graham376]

Another small note. Double tax agreements usually only apply to earned income, I.e. income tax. Pensions and inheritance are separate?

I have never looked up the rules which I'm told say everyone should submit annual tax returns but we don't bother after Finances said (verbally) no point if we don't have any income here.

 

[25931]

No, once resident not allowed to drive foreign plated cars and any UK car here should be imported. In theory, there's a reduced import duty on cars owned by very recent residents but in practice, doesn't always work. A mate was told he would have to pay €8k duty on his €1k value Merc. It's possible the reduced rate only applies to those immigrating, rather than just becoming resident.

Your mate made the mistake of trying to deal directly with the Alfandega. There are agents who deal with this and who know how to do things.

 

[25931]

Piece in portugal resident might be of interest >

https://www.portugalresident.com/think-beyond-residency-when-planning-your-life-in-portugal-2/

I'm not sure about "buying a property in Portugal" after selling in UK, I think that it applies to buying anywhere in the EU but things keep changing so if it might apply to you check first.

 

[Graham376]

I'm not sure about "buying a property in Portugal" after selling in UK, I think that it applies to buying anywhere in the EU but things keep changing so if it might apply to you check first.

Remember that the article was written by a financial consultant who has a vested interest in making things look very complicated.

 

[nortada]

Remember that the article was written by a financial consultant who has a vested interest in making things look very complicated.

To be specific this article is one of many seeking to drum up business for well known financial companies.

It is my understanding that after 3 months contiguous you are regarded to be a Portuguese resident. That is why you are required to register (which, in Portugal, brings with it temporary residency).

If you spend more than 183 days per annum in Portugal you are considered to be a resident for tax purposes and required to put in a tax return. We try never to be in Portugal for 183 days in any year.

However, when we made tentative enquires, like Graham, we were reminded that provided income, including pensions, was taxed (in the UK), it would not be taxed in Portugal. However, any income earned in Portugal would be subject to Portuguese taxes. As we are taxed in the UK and have no income earned in Portugal, we have no Portuguese tax liability. Therefore, we were advised, a nil tax return would not be required.

Whatever, the outcome of Brexit, I think it will not have any impact on Portuguese tax law. However, the introduction of the biometric residency permit will increase visibility so we will redouble our efforts to spend no more than 180 days per year in Portugal.

 

[nortada]

Another small note. Double tax agreements usually only apply to earned income, I.e. income tax. Pensions and inheritance are separate?

As I understand it pensions are income and taxed as such but a lump sum draw down on a pension plan is another issue.

All UK Government pensions are taxed in the UK, however, I believe it is possible to elect to have your UK State pension taxed in Portugal

I have been lead to believe that there is no inheritance tax (IHT) in Portugal but before folk get too excited, if you are classed as domiciled in the UK on your death, your assets worldwide are still subject to UK IHT and it is not easy to renounce UK domicility.

 

[Graham376]

I have been lead to believe that there is no inheritance tax (IHT) in Portugal but before folk get too excited, if you are classed as domiciled in the UK on your death, your assets worldwide are still subject to UK IHT and it is not easy to renounce UK domicility.

When mother in law died, apartment was left to my wife, her sister and dead brother's two sons, none of them paid inheritance tax. When we bought out the three siblings, they had to pay tax on difference between valuation and amount received. Property has a valuation (I suppose similar to our rateable value but can't remember what it's called). When we come to sell, tax will be payable on difference between value and sale price but can be avoided by rolling over into another property.

 

[25931]

New species invading Ria Formosa according to today's CM the increase in sea temperatures is causing the invasion by various undesirables and the Algarve University is involved in NEMA ( new marine species in the Algarve) and asking the public to send photos of a dozen species. ( which the paper forgets to list ) I don't know if they need photos of the Caranguejo-Azul (bue crab) because the paper states that this American invader , measuring 30cm and weighing 900g was first recorded in 2016 and has becomen a commercial proposition which should be encouraged as it is a threat to the dwindling sea-horse population. They only name camarão-mantis and peixe-balão.
The article also states that alga Caulerpa ,originating in the Med is proliferating since it reappeared in 2011 after an absence of 50 years.

 

[25931]

When mother in law died, apartment was left to my wife, her sister and dead brother's two sons, none of them paid inheritance tax. When we bought out the three siblings, they had to pay tax on difference between valuation and amount received. Property has a valuation (I suppose similar to our rateable value but can't remember what it's called). When we come to sell, tax will be payable on difference between value and sale price but can be avoided by rolling over into another property.

Rateable value -V.P.T. valor patrimonial tributário.
When you sell what is taxed is "mais valias"- the profit- the difference between purchace and sale prices.

 

[Graham376]

Rateable value -V.P.T. valor patrimonial tributário.
When you sell what is taxed is "mais valias"- the profit- the difference between purchace and sale prices.

OK thanks, my mistake, I understood the notary to say it was the difference between V.P.T which increases annually and sale price. I'll have to get another valuation some time as I didn't trust the guy from Remax. He brought a mate with him, obviously a builder looking for cheap properties who didn't cotton on to us understanding their discussion!

 

[25931]

OK thanks, my mistake, I understood the notary to say it was the difference between V.P.T which increases annually and sale price. I'll have to get another valuation some time as I didn't trust the guy from Remax. He brought a mate with him, obviously a builder looking for cheap properties who didn't cotton on to us understanding their discussion!

VPT doesn't increase annually any more than rateable value in England.
Don't undestand why you want a valuation (especially from Remax) unless you are wanting to sell.

 

[Graham376]

VPT doesn't increase annually any more than rateable value in England.

When were at the Finances, they had to update the value of the property on their books as it had increased, they said with inflation. Whether that was VPT or not I don't know. Will have a word with notary acquaintance and see what she has to say, not willing to get into values etc here.

 

[25931]

When were at the Finances, they had to update the value of the property on their books as it had increased, they said with inflation. Whether that was VPT or not I don't know. Will have a word with notary acquaintance and see what she has to say, not willing to get into values etc here.

VPT does increase from time to time but certainly not annually

 

[greeny]

VPT does increase from time to time but certainly not annually

From what I understood when I sold and bought here twice, the value used to calculate your gain is not the price you paid. There was a "factor" used on the original purchase price which had the effect of increasing its original purchase value and therefore decreasing your gain. It's not a lot though . Don't ask me how they work out the factor figure. I understood it was to do with inflation. Solicitor dealt with all that.

 

[25931]

From what I understood when I sold and bought here twice, the value used to calculate your gain is not the price you paid. There was a "factor" used on the original purchase price which had the effect of increasing its original purchase value and therefore decreasing your gain. It's not a lot though . Don't ask me how they work out the factor figure. I understood it was to do with inflation. Solicitor dealt with all that.
[/QUO
You are quite right, it reduces with the length of time that you've owned.

 

[nortada]

Hi Pavaligo,

Believe you are in Portugal - how is it all working out?