appman999

We sold our house in Portugal at the end of last year so have to do our tax return this year and pay our CGT.

We are non resident so as far as I can see we just have to fill out Annex G of the tax return with the required details.

Not being familiar with the Portuguese tax system I got quotes from accountants for doing this which were in the €500 to €650 range!

This made me look more closely at the tax return in general and annex G in particular and I really cannot see a justification for this sort of charge.

The quotes were from the larger well known companies and I know a smaller more local accountants are cheaper but it does seem very straightforward to do it oneself.

Am I missing something?

Alan PT

Those quotes are pretty much what I'd expect from specialist firms. If you don't have any complex cross border issues then a Portuguese accountant will do it for maybe 10-15% of that

Posted a few more thoughts here previously: Tax return online

appman999

Your link to https://www.doutorfinancas.pt/impost...o-irs-em-2021/ was part of the reason why I can't see why I should pay 500-600 just for a CGT return (or frankly even 50-75 although I've not seen quotes that low)

Has anyone got recommendations for accountants with fees at the lower end as next year we will need to do a return with possibly Annex J & L although I am seeking professional advice on these before becoming resident.

ricko

1 You also have to do a cover sheet (rosto)

2 I would have liked to have a small firm do it the first time, and use that as a template for following years.
However, in the end, I had to do it myself.
It was a bit of a struggle, but I got by with help from this forum.
IIRC the tax season starts in April, so you have time to investigate if you want to do it yourself.
It was the nitty-gritty details that I found the most problematic.
If you want to investigate doing it yourself, then there is information on doing a first tax return, in the last post on the link from Alan PT

wellinever

hi
Not sure where you are classed as resident, but if UK, have you considered that? Or did you tell HMRC your main home was PT?
As Non resident of PT, are you restricted to the 28% tax or be treated as a resident?
If so maybe you would have 3 years from sale to reinvest in EU, and use reinvestment rates

appman999

UK resident but still liable for CGT on Portugal house sale.

Interesting point re main home which I hadn't considered.

When we become resident in Portugal in a new house we will keep and visit our UK house so still be tax resident in the UK (as well as Portugal).

I was assuming our UK house would remain our main home even though we will spend more time in our new Portuguese house.

I further assumed selling our UK house would not give rise to CGT in either UK or Portugal, and the sale of our Portuguese house would be covered by the Portuguese rules (50% or nothing if buying a new house) but taxed in the UK.

Not so sure now.

wellinever

Hi
Its a minefield.
If you are a resident of UK and tax resident of UK, (and you are NOT resident at the moment of PT), so you are resident of UK, then you are liable for tax on all Worldwide income, including CGT.
Whilst PT has first dibs at the CGT on your PT property, by law you should inform HMRC of the sale and gain within I think 60 days of sale.
If you have not declared it as your Main home to HMRC then it is subject to CGT at rates including any other income declared to HMRC (easy check on property tax here, just click property input other income and capital gain made (put in £ at 1.20). It will show what is needed in UK. If you have paid more than that in PT, then double taxation agreement with UK should negate any tax liability in UK
https://taxscouts.com/calculator/capital-gains-tax/
I must admit to not being sure if a non EU resident can use the residents tax in PT (ie 50% of gain taxable at PT nominal rates, but you would need to show your worldwide income if they do allow that), if not it would be at straight 28% of gain in PT. So you can do the sums.

appman999

I think you are conflating two situations;

I'm pretty relaxed regarding the current CGT situation apart from the costs of accountants and the getting used to a different tax return. CGT in the UK is an annual joy and will be less than the Portuguese CGT charges!

Your last sentence is relevant to the second situation when I have become resident in Portugal, so yes I will be declaring my worldwide income and be able to use the PT taxpayer CGT benefits.

The issue which you drew my attention to then is which house does HMRC consider to be my Main home?

appman999

Just for to reiterate I am assuming that using HMRC rules I will remain resident in the UK for tax purposes as well as being resident in Portugal.

Alan PT

Haven't got the reference to hand, but I think your UK house would be subject to Portuguese CGT normally, but exempt if sold during the NHR period

nigel.b

Re the initial inquiry, I paid a local accountant E150 to do my CGT when I sold up in Portugal. That was 2.5 years ago, and no problems so far. The accountant was recommended by my estate agent. At this price it seemed worth getting an expert in.

As everywhere the solicitors, accountants and estate agents (and surveyors in the UK) work seamlessly together....

wellinever

Dunno how you will do that?
If you take residency in PT, you should also declare yourself Tax resident in PT.
And, like the UK, PT will then expect you to declare any sale of property anywhere else, not just PT.

wellinever

They consider the one you are registered on your records with them, unless you can change it.
In just the same way that they do if your second home is in UK, it is down to you to change it.

appman999

Using the HMRC Statutory Residence Test I will be tax resident in the UK, but as I will be resident in Portugal for more than 183 days I will be tax resident there too.

The tests in the UK/Portugal double taxation convention when you are tax resident in both countries indicate my status is that of resident for tax purposes in the UK.

I admit I don't really understand it either and will be seeking professional advice!

wellinever

hi
Have you checked what AT considers as your address at the moment?
You say you were a resident of PT, and so unless someone changed that when you left AT will still consider you to be a tax resident.
And that would have impact if on your return you want to take NHR (must not be tax resident within prior 5 years).
I dont think its so difficult to understand in principle, its all of the planning needed ti ensure you dont fall into traps set by HMRC.
One of the problems of UK is that we as Brits do not actually have anything that says you are or are not resident, unlike the EU countries.
If that were the case it would be simple to tell UK you are now not normally resident, but when you own property available to you then it is.
Another potential thing to think about, regarding CGT, is that when a resident of PT and sell your main home in PT, you have 36 months to make a reinvestment, if you want to, and take the `benefits` obtained by doing that, but if Tax resident in UK, selling second home in PT (thats how they would see it), then HMRC want the full CGT in UK, before you make a reinvestment, if you want to make use of the 36 months or less !!!