Basic tax return example
May 24th 2020, 1:05 pm
#1
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Basic tax return example
Having struggled to comprehend my first return, I've set out below what I've found, in the hope it will help future first-timers.
The situation is for a single retiree with income from pensions, renting out UK home, interest and dividends.
There are three forms to complete:
Rosto........covering page
Anexo J......foreign income form
Anexo L......NHR form, if applicable
For these documents, it appears your NIF goes in the part for "Sujeito Passivo A", but also in Anexo J and Anexo L Table 3A, "Identificao do titular do rendimento".
In certain sections, a code for the UK is required - this is 826.
The main work seems to be in filling out Anexo J.
In this form, pensions go in Table 5. For Table 5A, fill in the first three columns, pension code, country code, and gross amount.
The pension codes are H01 for company pensions (and State Pension?), code H02 being for "Public pensions"; I assume this means those government pensions always taxed in the UK (eg. teachers and civil service pensions).
In Table 5C, for further details of your entries in Table 5A, company pensions go under "Decorrentes de emprego anterior", and State Pension under "Seguranca social".
For income from renting out your UK home, use Table 7A. The columns are income code (F01), country code, net profit without tax, and tax paid abroad.
In Table 7B, and elsewhere, there is a choice with a question starting "Opta pelo englobamento ..."; for further information on this, see the post "Strange tax translation"
Strange tax translation
Interest and dividends go in Table 8, the first three columns being income code, country code, and gross amount.
The income codes are E11 for dividends, and E21 for interest.
For what goes in Table 11, see the post "Strange tax translation" mentioned above.
For those claiming NHR, in Anexo L Table 6B, the correct choice is "Metodo de isencao", box 05.
The situation is for a single retiree with income from pensions, renting out UK home, interest and dividends.
There are three forms to complete:
Rosto........covering page
Anexo J......foreign income form
Anexo L......NHR form, if applicable
For these documents, it appears your NIF goes in the part for "Sujeito Passivo A", but also in Anexo J and Anexo L Table 3A, "Identificao do titular do rendimento".
In certain sections, a code for the UK is required - this is 826.
The main work seems to be in filling out Anexo J.
In this form, pensions go in Table 5. For Table 5A, fill in the first three columns, pension code, country code, and gross amount.
The pension codes are H01 for company pensions (and State Pension?), code H02 being for "Public pensions"; I assume this means those government pensions always taxed in the UK (eg. teachers and civil service pensions).
In Table 5C, for further details of your entries in Table 5A, company pensions go under "Decorrentes de emprego anterior", and State Pension under "Seguranca social".
For income from renting out your UK home, use Table 7A. The columns are income code (F01), country code, net profit without tax, and tax paid abroad.
In Table 7B, and elsewhere, there is a choice with a question starting "Opta pelo englobamento ..."; for further information on this, see the post "Strange tax translation"
Strange tax translation
Interest and dividends go in Table 8, the first three columns being income code, country code, and gross amount.
The income codes are E11 for dividends, and E21 for interest.
For what goes in Table 11, see the post "Strange tax translation" mentioned above.
For those claiming NHR, in Anexo L Table 6B, the correct choice is "Metodo de isencao", box 05.
May 24th 2020, 9:39 pm
#2
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Re: Basic tax return example
Thank you!
The category 7A applies also to holiday rentals outside Portugal?
The category 7A applies also to holiday rentals outside Portugal?
May 25th 2020, 1:01 pm
#3
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Joined: Feb 2016
Posts: 257
Re: Basic tax return example
Just curious how you calculate the exchange rate and how you deal with different financial year period (UK is April to April and Portugal is Jan to Dec)?
May 25th 2020, 7:07 pm
#4
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Re: Basic tax return example
The category 7A applies also to holiday rentals outside Portugal?
That said, I believe that any property income could go in Table 7.
However, I remember seeing a note that property income could also go in another Table (Table 6 I believe, business income); I do not know under what circumstances it would be beneficial to put the income in this second table.
May 25th 2020, 7:16 pm
#5
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Re: Basic tax return example
Just curious how you calculate the exchange rate and how you deal with different financial year period (UK is April to April and Portugal is Jan to Dec)?
As for exchange rate, I believe there are a number of websites providing this (xe.com I have read provides historical rates).
For the different tax periods, I can only see that the information should be collected on a month by month basis.
May 26th 2020, 10:56 am
#6
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Re: Basic tax return example
Hi ricko,
Good post . Not many Brits are involved in this lark.
I fill out the Trabalhador Independente one as I am Resident here. I think it is called Modulo 3 or something to that effect. I haven't earned anything abroad but I may do. I don't know if I require a separate Anexo. I will worry about it closer to next April, I remember seeing a declaration in the Trimestral earnings declaration for Segurança Social for income earned abroad as well. Just so you know I haven't applied for "o Apoio o Excecional" as I have sufficient reserve to weather the Covis-19 economic fall out. I live in a very modest manner.
Out of interest does anyone know what you pay in England for NI contributions to remain self employed and (hence independent) When I looked into it about 8 years ago or so the base was around the £250 per annum mark.
Thank you.
Good post . Not many Brits are involved in this lark.
I fill out the Trabalhador Independente one as I am Resident here. I think it is called Modulo 3 or something to that effect. I haven't earned anything abroad but I may do. I don't know if I require a separate Anexo. I will worry about it closer to next April, I remember seeing a declaration in the Trimestral earnings declaration for Segurança Social for income earned abroad as well. Just so you know I haven't applied for "o Apoio o Excecional" as I have sufficient reserve to weather the Covis-19 economic fall out. I live in a very modest manner.Out of interest does anyone know what you pay in England for NI contributions to remain self employed and (hence independent
) When I looked into it about 8 years ago or so the base was around the £250 per annum mark.Thank you.
May 27th 2020, 8:26 am
#7
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Joined: Oct 2019
Location: Porches, Algarve
Posts: 75
Re: Basic tax return example
Having struggled to comprehend my first return, I've set out below what I've found, in the hope it will help future first-timers.
The situation is for a single retiree with income from pensions, renting out UK home, interest and dividends.
There are three forms to complete:
Rosto........covering page
Anexo J......foreign income form
Anexo L......NHR form, if applicable
For these documents, it appears your NIF goes in the part for "Sujeito Passivo A", but also in Anexo J and Anexo L Table 3A, "Identificao do titular do rendimento".
In certain sections, a code for the UK is required - this is 826.
The main work seems to be in filling out Anexo J.
In this form, pensions go in Table 5. For Table 5A, fill in the first three columns, pension code, country code, and gross amount.
The pension codes are H01 for company pensions (and State Pension?), code H02 being for "Public pensions"; I assume this means those government pensions always taxed in the UK (eg. teachers and civil service pensions).
In Table 5C, for further details of your entries in Table 5A, company pensions go under "Decorrentes de emprego anterior", and State Pension under "Seguranca social".
For income from renting out your UK home, use Table 7A. The columns are income code (F01), country code, net profit without tax, and tax paid abroad.
In Table 7B, and elsewhere, there is a choice with a question starting "Opta pelo englobamento ..."; for further information on this, see the post "Strange tax translation"
Strange tax translation
Interest and dividends go in Table 8, the first three columns being income code, country code, and gross amount.
The income codes are E11 for dividends, and E21 for interest.
For what goes in Table 11, see the post "Strange tax translation" mentioned above.
For those claiming NHR, in Anexo L Table 6B, the correct choice is "Metodo de isencao", box 05.
The situation is for a single retiree with income from pensions, renting out UK home, interest and dividends.
There are three forms to complete:
Rosto........covering page
Anexo J......foreign income form
Anexo L......NHR form, if applicable
For these documents, it appears your NIF goes in the part for "Sujeito Passivo A", but also in Anexo J and Anexo L Table 3A, "Identificao do titular do rendimento".
In certain sections, a code for the UK is required - this is 826.
The main work seems to be in filling out Anexo J.
In this form, pensions go in Table 5. For Table 5A, fill in the first three columns, pension code, country code, and gross amount.
The pension codes are H01 for company pensions (and State Pension?), code H02 being for "Public pensions"; I assume this means those government pensions always taxed in the UK (eg. teachers and civil service pensions).
In Table 5C, for further details of your entries in Table 5A, company pensions go under "Decorrentes de emprego anterior", and State Pension under "Seguranca social".
For income from renting out your UK home, use Table 7A. The columns are income code (F01), country code, net profit without tax, and tax paid abroad.
In Table 7B, and elsewhere, there is a choice with a question starting "Opta pelo englobamento ..."; for further information on this, see the post "Strange tax translation"
Strange tax translation
Interest and dividends go in Table 8, the first three columns being income code, country code, and gross amount.
The income codes are E11 for dividends, and E21 for interest.
For what goes in Table 11, see the post "Strange tax translation" mentioned above.
For those claiming NHR, in Anexo L Table 6B, the correct choice is "Metodo de isencao", box 05.
May 29th 2020, 12:00 pm
#8
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Joined: Aug 2007
Posts: 160
Re: Basic tax return example
qianh - when we first did our pt tax return we went to our finanças to ask how to do it and the man there was most helpful. He told us that we should use the exchange rate of the day that we received the money so that's what we do. It is a real pain that the UK has a different tax year to the rest of the world (I don't know that is really the case!) but you just have to deal with the two systems. For example, we have rental income in the UK so I just put in the income on the pt tax return that we have received during the pt tax year on the dates that we have received it using the exchange rate of that day then add them all together and then put them on the appropriate box in annex J.
May 30th 2020, 7:51 am
#9
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Joined: Mar 2008
Posts: 1,705
Re: Basic tax return example
Anyone advise on this tax question (figures given for example)
So, what would be the tax liabilty for a Portuguese resident on this income stream all from UK. Person is aged 70, and single. (NO NHR)
UK State pension £9000
Private pension UK £4500
UK prop. rental income (Gross) £6000
so total income all frm UK at £19,500
Tax payable in UK would be £1400
This would be a simple basic tax demand, forgetting any allowance for meds or insurances or anythng else.
So, what would be the tax liabilty for a Portuguese resident on this income stream all from UK. Person is aged 70, and single. (NO NHR)
UK State pension £9000
Private pension UK £4500
UK prop. rental income (Gross) £6000
so total income all frm UK at £19,500
Tax payable in UK would be £1400
This would be a simple basic tax demand, forgetting any allowance for meds or insurances or anythng else.
May 31st 2020, 7:14 am
#10
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Joined: Jul 2014
Location: Arcos de Valdevez "Onde Portugal se fez"
Posts: 16,829
Re: Basic tax return example
Anyone advise on this tax question (figures given for example)
So, what would be the tax liabilty for a Portuguese resident on this income stream all from UK. Person is aged 70, and single. (NO NHR)
UK State pension £9000
Private pension UK £4500
UK prop. rental income (Gross) £6000
so total income all frm UK at £19,500
Tax payable in UK would be £1400
This would be a simple basic tax demand, forgetting any allowance for meds or insurances or anythng else.
So, what would be the tax liabilty for a Portuguese resident on this income stream all from UK. Person is aged 70, and single. (NO NHR)
UK State pension £9000
Private pension UK £4500
UK prop. rental income (Gross) £6000
so total income all frm UK at £19,500
Tax payable in UK would be £1400
This would be a simple basic tax demand, forgetting any allowance for meds or insurances or anythng else.
You'd then have a choice as to whether to have the rental income taxed at a special rate of 28% or to include it with your other income and have it taxed at the appropriate rate on the scale. In your case the 28% would be the better option, so the tax on that would be 1,864.80€.
Total of 3,771.09€ from which would be credited any UK tax paid on the rental income, and the PT specific deductions.
Unless anyone can come up with a better number
Last edited by Red Eric; May 31st 2020 at 7:16 am.
May 31st 2020, 8:07 am
#11
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Joined: Mar 2008
Posts: 1,705
Re: Basic tax return example
Thnks Red.
Still in UK........looking to get back on 4th July, for a short trip, trust by time I go back to UK, the planned 14 day quarantine will have been rubished and removed.
So to sum it up, on the figures used, the annual EXTRA cost of being a resident of Portugal would be e2200 pa.
On the rental in the UK, I gave a gross figure, does Portugal allow costs like service charge, repairs etc?
Still in UK........looking to get back on 4th July, for a short trip, trust by time I go back to UK, the planned 14 day quarantine will have been rubished and removed.
So to sum it up, on the figures used, the annual EXTRA cost of being a resident of Portugal would be e2200 pa.
On the rental in the UK, I gave a gross figure, does Portugal allow costs like service charge, repairs etc?
May 31st 2020, 12:57 pm
#12
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Location: Arcos de Valdevez "Onde Portugal se fez"
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Re: Basic tax return example
You could always gift me the UK rental property if you're looking to reduce the burden a bit
Jun 6th 2020, 4:50 pm
#13
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Re: Basic tax return example
Just curious how you calculate the exchange rate and how you deal with different financial year period (UK is April to April and Portugal is Jan to Dec)?
Apparently, one can aggregate all the income for one particular entry, and just do one exchange calculation. This would use the exchange rate on 31 December.
I cannot remember where I first came across this, or how old it is, but if true, it should reduce the burden of filling in the tax forms.
Jun 7th 2020, 6:49 am
#14
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Location: Arcos de Valdevez "Onde Portugal se fez"
Posts: 16,829
Re: Basic tax return example
Whilst collecting my income information, I came across some old notes I made that may be of help.
Apparently, one can aggregate all the income for one particular entry, and just do one exchange calculation. This would use the exchange rate on 31 December.
I cannot remember where I first came across this, or how old it is, but if true, it should reduce the burden of filling in the tax forms.
Apparently, one can aggregate all the income for one particular entry, and just do one exchange calculation. This would use the exchange rate on 31 December.
I cannot remember where I first came across this, or how old it is, but if true, it should reduce the burden of filling in the tax forms.
Jun 7th 2020, 9:26 am
#15
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Posts: 414
Re: Basic tax return example
In terms of private pensions - don't forget to look at the provisions of article 54 of the tax code - might save some money