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Old Oct 27th 2017, 3:36 pm   #151
ricko 
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Default Re: Step by Step - Arrival in Portugal

Quote:
but what is Increase in Wealth ?
Capital Gains
Thanks for the clarification.
On looking closer at the document, it says, for all these incomes:

are exempt if alternatively:
a) They are taxed by the source State/nation,

Does this not mean that they would have to be taxed in the UK to be exempt in Portugal?
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Old Oct 27th 2017, 3:49 pm   #152
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Default Re: Step by Step - Arrival in Portugal

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Originally Posted by ricko View Post
Thanks for the clarification.
On looking closer at the document, it says, for all these incomes:

are exempt if alternatively:
a) They are taxed by the source State/nation,

Does this not mean that they would have to be taxed in the UK to be exempt in Portugal?
Check the phrasing because I believe the operative word is "could" but as a non-resident they should be taxed by the UK but will not be under double-taxation agreement.
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Old Oct 27th 2017, 3:51 pm   #153
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Default Re: Step by Step - Arrival in Portugal

Quote:
Originally Posted by ricko View Post
Thanks for the clarification.
On looking closer at the document, it says, for all these incomes:

are exempt if alternatively:
a) They are taxed by the source State/nation,

Does this not mean that they would have to be taxed in the UK to be exempt in Portugal?
I think that's the snag. Normally Capital Gains are taxed by the country of residence only except for real estate where they're taxed first in the country where the property is located and then taxed by the country of residence, with any relevant Double Taxation Treaty dealing with any overlap.
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Old Oct 27th 2017, 4:15 pm   #154
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Default Re: Step by Step - Arrival in Portugal

Quote:
are exempt if alternatively:
a) They are taxed by the source State/nation,

Does this not mean that they would have to be taxed in the UK to be exempt in Portugal?
Quote:
Check the phrasing because I believe the operative word is "could" but as a non-resident they should be taxed by the UK but will not be under double-taxation agreement.

I cut and pasted the phrase from the document, so there was no "could"
suggested.


Quote:
I think that's the snag. Normally Capital Gains are taxed by the country of residence only except for real estate where they're taxed first in the country where the property is located and then taxed by the country of residence, with any relevant Double Taxation Treaty dealing with any overlap.
The phrase at the top appeared for all types of income mentioned, not just capital gains.
There were a few links in this part of the document. I suspect these gave qualifications and clarifications. However, all of the links went to documents that were only in Portuguese.
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Old Oct 27th 2017, 4:26 pm   #155
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Default Re: Step by Step - Arrival in Portugal

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Originally Posted by ricko View Post
... However, all of the links went to documents that were only in Portuguese.
That's another snag!
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Old Oct 28th 2017, 1:46 pm   #156
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Default Re: Step by Step - Arrival in Portugal

DTA UK - Portugal. Article 13.4 States:

//4. Gains from the alienation of any property other than those mentioned in paragraphs (1)
and (2), shall be taxable only in the Contracting State of which the alienator is a resident.//

The word "property" mentioned here includes investment securities and is only taxable by Portugal. This made me think that the Capital Gains I make are exempt having NHR status. It is not and 28% flat rate is payable. The same rate as local citizens.

So if you are a Category E taxpayer then NHR will not apply. I still don't get it.
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Old Oct 30th 2017, 12:27 pm   #157
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Default Re: Step by Step - Arrival in Portugal

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So if you are a Category E taxpayer then NHR will not apply. I still don't get it.
If Category E (Capital Income), means Bank Interest and Company Dividends, then are you saying that you would pay tax in both the UK and Portugal?
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Old Oct 30th 2017, 12:41 pm   #158
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Default Re: Step by Step - Arrival in Portugal

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Originally Posted by ricko View Post
If Category E (Capital Income), means Bank Interest and Company Dividends, then are you saying that you would pay tax in both the UK and Portugal?
No, these are tax exempt in Portugal under RNH.
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Old Oct 30th 2017, 1:41 pm   #159
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Default Re: Step by Step - Arrival in Portugal

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Originally Posted by ricko View Post
If Category E (Capital Income), means Bank Interest and Company Dividends, then are you saying that you would pay tax in both the UK and Portugal?
Category E in my case is Capital Income from gains made in investments or Capital Gains Tax. The Dividends are withheld at source and capped by the DTA at 15%.

PT AT has billed me €11k for a gain I made when I switched from one company to another even though I have NHR status.
This is because the DTA states that Capital Gains are taxed in the country of residence ie in PT.
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Old Oct 30th 2017, 2:14 pm   #160
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Default Re: Step by Step - Arrival in Portugal

UK Bank Interest and UK Company Dividends are not generally subject to any withholding tax for non-residents. Does this mean that 'UK-sourced' income of this kind is therefore taxed in Portugal, even with NHR?
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Old Oct 30th 2017, 2:35 pm   #161
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Default Re: Step by Step - Arrival in Portugal

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Originally Posted by RichardHenshall View Post
UK Bank Interest and UK Company Dividends are not generally subject to any withholding tax for non-residents. Does this mean that 'UK-sourced' income of this kind is therefore taxed in Portugal, even with NHR?
I am aware that the UK tax on Dividends and Interest are taxed differently to South Africa where I get my income from but Capital Gains are taxed only by Portugal whether it is earned in the UK or SA. Both DTA's are the same on this matter as are most western countries.

UK uses the RESIDENCE clause in the DTA as shown in post 156. So having NHR will not apply.
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