assaymarra

I'm thinking of applying for NHR status in portugal but am struggling to find advice on whether ALL UK dividend income is tax exempt.

i take my income as dividends from a few businesses that i am a director for.

I am not yet of retirement age

can i take dividend income tax free from businesses I am involved in?

any advice appreciated
thanks

Ukkram

Dividends are not tax exempt under NHR status so don't bother to apply for it.
However, dividends are capped at 15% by the tax treaty between UK and PT.
UK does not have a withholding tax on dividends so you will be liable for the 15% taxation to PT only.

bazzer70

Sorry if this has been answered before but I too plan to apply for NHR status but maybe it isnt worth it...
My pension will continue to be taxed in UK (teacher's) so no benefit there...
My investments (funds in ISA's at present) will produce dividends so will be taxed (according to Ukkram) in Portugal so again no benefit really...
My savings in banks are not taxed at source in Uk so maybe I do get a benefit there...
I plan to have sold my house before moving to Pt so again no capital gains tax implications so no benefit there....
Any advice/suggestions gratefully received too
thanks
Baz

Red Eric

NHR and UK dividends, according to Belion Partners :

https://www.belionpartners.com/portu...nt-regime.html

Diddion

Baz - UK civil servants’ and government employee pensions do remain taxable in the UK, as is rental income. However, at least for now, such would still benefit from the personal allowance (£11,850 pa). Confusingly, pensions from TPA are either government or non-government. See this link: https://www.gov.uk/hmrc-internal-man...ual/intm343040

Diddion

.....more: It looks to me that the double taxation treaty would not suggest that teachers pensions are taxable only in the UK. See sections 17 and 18. iI will post below if I obtain more information. https://assets.publishing.service.go...-_in_force.pdf

Red Eric

That first link's very useful.

It's pretty straightforward normally - if you were directly employed by government or local authority etc and your pension's paid out of one of the public sector superannuation funds, it's taxed exclusively by the UK.

However, it counts in the assessment of the scale rate at which any income taxable by PT will be calculated. So if dividends or bank interest or any other income currently received or likely to be received in the next 10 years (such as a state pension) enter into calculations, then NHR status will definitely be of benefit for the years it applies.

Diddion

An authoritative answer. I worked as an FE lecturer, employed directly by colleges, and am in receipt of superannuation from teachers pension agency. However, I contacted HMRC today, and was informed that my own pension will be subject to UK tax in the first instance, even though I was not directly employed be UK government.

Oh well.

Red Eric

Er, yes, that's what I would expect, FE colleges being in the public sector (FE / 6th form colleges are still publicly funded, aren't they? - I'm a bit out of touch, I must admit).

What I meant by directly employed was not eg as part of an outsourced contract where the work undertaken is in the public sector but performed by a private organisation.

ricko

With differing opinions on tax of dividends, will this not become apparent the first time the tax form is completed? In the tax calculation sent back to you, will it not show all income that has been taxed?

Or is the taxing process quite different to the UK.
Do you put all income on the form, and the authorities select those which are to be taxed; or do you have to find out which income will be taxed, and put only that on the form?

Red Eric

I'm struggling to see where it's coming from that foreign-sourced dividend income isn't tax-exempt under NHR. All the big firms seem to agree that it is, provided that it can in theory be taxed by the source country and that it doesn't arise from a black-listed tax haven.

Anybody got any source which says otherwise?

Pilou

Change in NHR in 2019?
The prices of real estate go up and up. reason: with the RNH people have more to spend on real estate.
See this new article: https://www.cmjornal.pt/politica/det...isencao-de-irs

To be honest, I think it is normal one pay taxes somewhere.

Red Eric

Actually, it's long been known that Mário Centeno is looking at altering the regime and that's something he re-iterated in an interview with the Jornal de Negócios a week or so back. That interview's behind a paywall but here's what Publico said of the relevant part :
https://www.publico.pt/2018/04/19/ec...sidade-1810909

Although the Bloco have long-held objections to both the NHR and the Golden Visas, they haven't so far had any success in getting them scrapped or materially altered. Looks like with the possibility of changes looming - and in my opinion it's quite right that the government uses this issue to get a bit of leverage on its own gripes with other EU countries on matters relating to predatory tax regimes - and elections on the horizon, the Bloco are raising their voice publicly again so that they can claim at least some of the credit when it happens. Canny move and all part of the game but it certainly won't be all down to them assuming anything does go through in next year's budget.

What has been mooted so far is far from a scrapping of the scheme, though, as far as I'm aware, so it could still confer advantages even if it suffers alterations.

EMR

I believe that NHR in its current form has had its day, it has inflated the property market , has been abused with many not meeting the minimum residential requirement, renting instead of buying and of course providing relief not available to the Portuguese.
Desperate times did call for desperate measures but those times are now over.

Loafing Along

if you look at the government finance department review of 2017 they gave the NHR a positive "vote" - the direct taxation lost being more than compensated by the indirect taxes paid.

From the available statistics between 2010 and 2016 some 13,687 requests were granted. Hardly earth-shattering numbers.

Remember also it is not just pensioners but qualified business people and Portuguese who have not lived in the country during the last five years who are attracted by it in order to "come home".