Following the recent UK Budget, British nationals living in Portugal — or considering a move — face important changes that could influence their financial planning across borders. This is especially relevant for those with significant assets in the UK, as updates to Capital Gains Tax (CGT) and Inheritance Tax (IHT) reflect a shifting approach to wealth management and tax responsibilities.
For British expats, particularly those who split their time between the two countries, with UK property or investment assets, increased CGT may call for careful consideration. Selling a property or realising gains from investments could mean facing increased tax liabilities, depending on the assets held.
This shift can impact strategies for both short-term financial management and long-term investment growth, especially for those who still have a significant UK financial footprint. The timing of asset sales or even relocation may require a new approach to optimise tax efficiency and protect returns.
In addition to CGT, changes to IHT reliefs may impact expats who retain UK assets they wish to pass on to future generations. For British nationals in Portugal, especially those with UK-based property or businesses, these updates may alter the projected IHT burdens for heirs. As IHT thresholds remain frozen, expats may want to consider both UK and Portuguese tax implications when structuring inheritance and estate plans.
For those contemplating a move to Portugal, the timing is key. The Portuguese 2024 Non-Habitual Resident (“NHR 2.0”) regime offers considerable advantages, including potential exemptions on certain non-Portuguese income and gains and reduced tax rates for income obtained in Portugal. Entering this regime under the right circumstances could offset some of the impacts of UK tax changes, making an early review of residency status and timing worthwhile.
With evolving tax landscapes in both the UK and Portugal, the most effective approach for British expats may be one that integrates the nuances of both jurisdictions, addressing regulatory shifts proactively.
British nationals in Portugal — or those on the cusp of relocating —may benefit from assessing the impact of these Budget changes, enabling them to make well-informed decisions to safeguard wealth and secure an optimal tax position within Portugal’s favorable regime.
About Forvis Mazars
Forvis Mazars is a leading provider of audit and assurance, tax, advisory & consulting services worldwide. Operating in over 100 countries and territories, we blend scale, capacity, and coverage with agility, profound insight, and a tailored approach.
Forvis Mazars in the UK spans 14 offices with the head office in London. Forvis Mazars in Portugal operate out of three offices the head office situated in Lisbon.
Speak with an adviser
If you would like to know more about how Forvis Mazars can support you, please contact:
Bernardo Masteling Pereira, Associate Partner for Private Clients at Forvis Mazars in Portugal – bpereira@mazars.pt
Paul Barham, Partner for Private Clients at Forvis Mazars in UK – paul.barham@mazars.co.uk