Pistolpete2

Looking at my lifestyle alternatives, the UK's 'state' and considering healthcare and cost of living, I've decided to take the plunge and do a consultation with Eurofinesco to see whether the tax makes sense for me or is no barrier, what with tax haven pension and other tax haven income and all.

I would like, conceptually, to be established in Portugal by brexit day, March 29th, bearing in mind that there could be a deal but no parliamentary majority for any option and even then a move around the UK tax year-end seems to work well.

I have an investment property to sell in the UK - the lease is up March 31st - and this issue seems to create a sense of urgency to get that sale done as soon as possible after I am able to lose my UK tax residency (even though it is only temporary for five tax years).

I'm planning to head for Portugal early next year (early January?) to wrap things up with securing a long-term property lease. With lease in hand, I would like to secure residency in good time for March 29th. That in hand I would like to secure NHR. I see Brexit worries thread OP is headed to PT to settle mid-February and responders think that is ok for residency even if not married to a PT citizen.

I will not be able to shake-off UK tax residency until April 12th, unless I break my current lease on the place we rent here a week early which could probably be done.

I'm hoping to target an exchange of contracts on my property (I know it's wishful thinking what with a possible constitutional crisis by then) around lateish April.

The above means that I will be UK tax resident and PT tax resident under NHR at the same time for about a month. I'm not sure if this is a problem aside from CGT gains. Eurofinesco can help with this.

Is the timeframe for getting residency realistic and can one fairly easily gain that residency and NHR for a spouse without the spouse being in PT at the time or would she briefly have to fly over? She will be in PT for a week + from February 27th.

AliceCaroline

If you are arriving in January 2019 you will have until March 2020 to apply for NHR. You can do it any time until then, you just say when you arrived and your 10 years will start in 2019 (the whole of 2019, they don't do split years for NHR)
Brexit shouldn't change NHR, it's not an EU thing.

AliceCaroline

This is an excerpt from the Portuguese Tax offices pdf on the NHR scheme. It's in english and can be found on their website..

When does the citizen have to request the registration as a non-regular
resident?
The request for registration as a non-regular resident must be made only after the
registration as a resident in the Portuguese territory.
Therefore, in case he already has a Portuguese Tax Identification Number (NIF)
but are still registered as a non-resident, he must request previously the change of
address and the status of resident, in any local tax office or citizen service center.
Deadline:
The registration request, as a non-regular resident, must be done until
March 31, inclusive, of the year following the one in which he became a resident in
the Portuguese territory.

Link to full pdf....
http://info.portaldasfinancas.gov.pt...IRS_RNH_EN.pdf

Pistolpete2

Ok Thanks!

My main motivation for getting NHR done was that I wanted it to be in place when I realise? those gains on my UK property hopefully in April/May 2019. In the UK, declaration of such gains has to be done pronto and what is more, the return will be based upon me stipulating that I'm non-resident for tax. I'm not sure what it is in PT.

I guess another purpose in getting it (NHR) done and dusted asap, when I would already be PT tax resident (for 2019) due to my commitment, was so that I could then think in NHR tax terms when doing things that would be subject to tax under NHR (with investments and property). I would need to get rid of US securities which have withholding tax on dividends as I'll never get it 'back' under NHR. Of course it's a chicken and egg because IF my tax affairs are not suited to NHR (though unlikely after my further research in so many different areas) I would not take the first step.

I can't see anything elsewhere (like in the UK) which would be affected in the interim (before I file my HMRC tax return for 2019/20 in May 2020) by my particular NHR status, so that's fine.

Pistolpete2

Yep I've changed my sentence on this.

EMR

Remeber there are two sides to NHR.
Portugal has its rules in what tax can be charged on income exported from your original country of tax ..
There are now moves by some countries to restrict what can be exported tax free..
Its not down to the EU or Brexit but just the tax rules of your original tax domicile...

Pistolpete2

Indeed, when I typed my OP I carelessly made it look like I was embarking on NHR for brexit and to the brexit deadline - it's only residency that I want done 'in time'. That said, I can't afford to live in Portugal as a simple tax resident and NHR must be 'there' for that gain on real property which is soon to be realised in some fashion.

I have monitored other threads on here regarding the potential retaliation etc by other tax domiciles responding to the damage done to their Treasuries by NHR and other tax deals - as in Malta for example.

I will have to adjust my assets and investments and where they are, to avoid any possible future shocks. Hopefully, this is not too huge a mountain to climb. Four years ago, everything was in the US (mainly preferreds but some small funds (but maybe now with pensions)) and that may be the way to go now when ISAs no longer serve a purpose.

uk03878

Did you ever think of Cyprus? I am trying to decide between Spain (tax nightmare), Portugal (slightly higher property prices) or Cyprus (might be too far away but great for tax and decent rentals)

Pistolpete2

Didn't really have anywhere else in mind aside from Portugal and the East Algarve because we know and like Portugal and the location in particular due to access to Faro Airport and Spain (Seville). Indeed Cyprus would be rather far away from the UK and Gatwick for when we connect to the Caribbean on a fairly regular basis (also through Paris - Orly). If Easyjet and Ryanair continue as they are now post brexit it is so easy to get to cities and places of interest from Faro. We like Madeira as well and its contrast from the mainland.

I have my consultation call with advisors Eurofinesco next week and we will see then whether tax on my current assets or as adapted to minimise tax is within acceptable limits. I'll check more detail on Cyprus in case this plan flops out but we don't have much time left for a change of course.

Diddion

Pistolpete2

Well actually after the last couple of stock market trading days I don't have that much in investment gains left so problem solved there.

What I was talking of was property (real estate) gains which I understood to be not taxable in PT under NHR (but they dictate your rate of PT tax) but which would be taxable at 28% if I were UK tax resident.

Now I have to admit that in recent PT threads on here the posts regarding disposal of UK property have ended up being so confusing as to make my head spin so much so that there was confusion but no conclusion, so I could be wrong.

Diddion

Oh dear, I think I am talking rubbish. Please ignore my post no 10!!!!!!!

Ukkram

Post #10 is not entirely wrong. We know that CGT on the sale of movable property is residence based by the rules of the tax treaty. If you sold while still resident of the UK then pay the tax to the UK and there is no need to report the sale to PT. No sharing of tax is allowed.

EMR

Surely you would have t o declare it as part of your total income in the relevant Portuguese tax year ?..

Pistolpete2

Post#10 IS entirely wrong because I had made it quite clear that I was only referring to residential property and the end of the lease thereon, so not a HOME. One of the problems with discussion of taxes on here is when responders raise topics which the OPs have 'covered' already elsewhere and then the off-topic discussion starts to get confusing as various responders don't agree on the specifics of that off-topic tax detail. Isn't tax complex enough already?

Indeed I plan to realise gains on UK real estate while tax resident in PT under NHR - due to the brexit date timing and my lease end, it isn't possible to go somewhere else as an interim measure (a haven) to realise those gains when not UK tax resident and then squeeze into Portugal before March 29th under a no-deal scenario. This, however, means the gains will be exempt under NHR but with progression, if I have other income subject to PT tax.

That (with progression issue) needs to be resolved regarding my income sources from Bermuda (which has a tax information exchange agreement with PT which may mean it is NOT a haven for certain tax purposes in PT).

As it is, with the brexit date, I only have just under two months to get my (and my wife's) PT residency sorted under my plans (while still with a home in the UK with my wife in it) and I can't really jump on this until I know which way the UK government is going to go with some sort of deal OR NOT. Hence my thread name FANTASY WORLD.

If we got a deal or the football gets kicked down the road, I wouldn't embark on this until January 2020 (when we would have already been in PT for three months in a holiday let, with a break) but there would still be the problem with the UK property/real estate to sell and the lease end may not be that easy to control then, in winter too.