AlgarveAndy

HI I've become resident in Portugal 2 weeks ago and plan to elect NHR Tax Status and then complete the DTI (Double Taxation Individual) Form to exit UK Tax and elect to be under Portuguese Tax regime from the 2020 TAX year starting on April 6th. I am confused as to how many days I can return to the UK to see family, I had a rough idea that I would go back for a long weekend (3-4 days) every 6 weeks or so....would this work out ok ?

Shanorme

You will be fine. It's an average of approximately 34 days spaced out through the year.

AlgarveAndy

thanks very much for the quick reply

Shanorme

Make certain you get yourself registered as tax resident in Portugal or you will have a problem.

Diddion

O dear, Shanorme, I fear you have got this wrong.

The number of days you can return to the UK, and not be treated as tax resident, are exactly counted, and they depend upon your situation according to the Statutory Residence Test This link is to the Government website. It is really important to understand how this test works, because it can be easy to become or remain UK tax resident because you have missed out on one point or another. The range of number of days available is between 15 and 182, depending on the number of ties involved. It is irrelevant as to whether you take these in one go, or spread out through the year. There are various flowcharts to help you out, such as one provided by KPMG

If you are in the UK at midnight, that counts as one day in the UK. For example, if you arrived at 0800 and left at 2355 then this would not be a day in the UK .....but if you left at 0005 it would be. Probably best not to cut it so fine, though!

But this year, your first part year in Portugal, is regarded as a split year. You were UK resident until you left the UK, and provisionally non resident thereafter. BUT in that remainder of the UK tax year, until April 5 2020, you are restricted to a total of 15 nights in the UK before being regarded as UK resident for the entire tax year.

And if you have a property in Portugal on 31 December, rented or owned, in which you live you will be a Portuguese tax resident here, commencing at the date of arrival in Portugal (previously it was regarded as for the entire tax year, January to December, but was changed in 2015)

Shanorme

That's why I said to make certain he was tax resident in Portugal.

AlgarveAndy

Thanks for the guidelines... I have obtained my tax code NIF when I received my completed my residency certificate on 23/10/2019 ,I returned to the UK on 25/10/2019 and then came back to Portugal on 05/11/2019, I am planning to spend a couple of weeks more back in the UK before April 5th 2020. my plan is to transition to Portuguese Only Taxation commencing the 2020 tax year (april 6th 2020) and I plan to complete on my Portuguese home purchase on 31/03/2020 . As I am early retired already in the UK and therfore have no income (and have not done for the past 4 years) I assume there is no issue with the number of days I spend in the UK up til 5th April 2020 as I don't earn any income in either country. Additionally as I will register for NHR before the sale of my house in the UK completes I will not have to pay Capital Gains on it's sale as It is my only permanent residence and hence taxable under UK law but exempted by HMRC.

Diddion

It is necessary to look at the individual rules for each country. You can be tax resident of more than one country, or indeed in some circumstances of neither. In other words, each country will follow its own rules, irrespective of decisions made by any other country. Whether or
not you are a Portugal tax resident will, therefore, not influence the UK position at all.

Pilou

You start to become tax payer in Portugal as of the moment you became resident, so 2 weeks ago and not as of 2020.

As of the 1st of january 2020 you have only 9 years RNH left!! Not 10. The RNH is for 10 calendar years and if you become resident for example as of 1 December, the whole calendar year counts as 1 RNH year.

Diddion

Yes.

The point Pilou is making is that you have satisfied the Portuguese requirements for tax residency by having moved here with the intention of remaining permanently - as opposed, for example, to coming here for a holiday. Dates of residency in any one country are clearly specified by the country concerned, and the beginning of your residency here is the date that you moved to Portugal. However, NHR is treated as full Portuguese tax years only, so even if you are resident for a few days of your first tax year, your NHR will be counted as starting from the previous 1 January (even though that is of no use to you)

Diddion

I am not entirely clear on this, so maybe someone else can step in.

At the moment, Portuguese residents pay CGT on the difference between the selling price of their main home, and the purchase price of the next, if it is lower. So I wonder whether this might apply to your sale of the UK property (being a Portuguese resident), or whether this would be exempt as arising from a foreign country (UK)

AlgarveAndy

Indeed and I agree fully, My timingof the decision for residency was driven by the Brexit date (at that time) of 31st October as the Official Portuguese Government guide to Brexit stated that only those resident before the Brexit deadline would be guaranteed to be eligible for permanent residency status in the future. Therefore not being able to utilise the fully 10 years of NHR was not a factor in my timing and being taxable for the rest of 2019 tax year was not an issue to my mingd as I have no Income to speak of.

AlgarveAndy

On your previous recommendation David I sought advice from a Tax advisory here in Portugal and the position is that as Property is on the DTA between UK and Portugal then it would not attract Portuguese CGT and the fact that it is my only UK Property and residence for 17 years means the HMRC exempt it from UK CGT on it's sale.