gemscot

I was planning to move to Spain however I am now thinking more Portugal given the preferred tax system

my questions relate to the following:-

I am hoping to set up a consultancy company for a few years and work part time from Portugal - my thoughts were to use this to pay myself and the wife a salary - perhaps £10k each which would therefore have zero uk tax deducted but would have some National insurance payments (hopefully not to much) - if I did this would I be exempt for tax in Portugal?

I have a pension pot which I plan to claim in around 5 years time. If I am a resident in Portugal for a few years I understand I can get the whole lot paid to me and get it tax free - assuming that I will not move back to the uk in the future

Are my above assumptions correct - is there any other thoughts - I realise that I will have to get financial advice before I puss the button but its good to get your experience in advance so I can start thinking about any issues

thanks

Ukkram

If you start a business in Portugal you will be applying your time, energy and mind in Portugal for income and will be liable for tax in PT. It does not matter where your clients are you will pay tax only in Portugal on this particular income. NHR status will cap your tax at 23% fixed for 10 years. I think the 23% includes a 3% temporary surcharge.

It will make no difference if you pay your wife or not as you have a choice to pay tax separately or combined. The 23% tax cap will make no difference but it would be a different story after 10 years.

If your pension is a private pension and has no Capital Gain component then you will be exempt in PT under the NHR and pay zero to the UK.
Capital Gains are only taxed in Portugal if resident here and fixed at 28%.

If working in PT then you will have to pay for social security here and not the UK.

gemscot

thanks Ukkram very helpful

so maybe easier then to pay myself a full (large as possible) salary in Portugal then instead as then I wouldn't pay anything in the UK and only 23% in Portugal - sounds interesting

re the pension its a little bit confusing as there is bound to be some capital gain on the pension over the years as the money is invested - so will need to double check if this creates a tax liability