atlasthemonk

As a UK citizen Is the NHR the only route to becoming a resident of Portugal? From what I have read,the attraction of NHR is to offer a tax free personal pension cash-in butit is high in almost all other tax positions. I personally have transferable assets (below the golden visa threshold) but virtually no personal pension.

dingg

You don't need nhr to become a resident at all, it's just a tax benefit or scheme open to anyone who has not been a resident in the past 5 years

Diddion

Absolutely. Conversely, though, you do need to become a resident before applying for NHR. As now being reported, there appears to be a move towards reducing the benefits of the NHR scheme to new applicants, so it is certainly wise to get on to this as soon as possible.

orangeblossom

you didn't really get a reply about how to become a resident. I'm not sure if you can still apply before the end of this month. I too am a UK citizen and I applied for residency in November at the Camera in Tavira and it was very simple. If you've had an address here for over 90 days. They just asked me for proof of address, such as a bill, and I had to state my date of entry or backdated date of application ( I don't remember which) as at least ninety days before I showed up at the office ; they didn't ask for proof of when I last entered but I signed to that effect on the application form. Then they asked for my passport and a passport photo and that was about it. I paid 15 euros or thereabouts to apply and had to go back the next day to pick up the certificate. I think you can technically apply until the last day before uk brexits but I coudln't swear to that.

mfesharne

NHR is a tax break available to new residents but it is not a visa.

No-one 110% knows for sure what will happen after 31st of this month and there may or may not be a transition period but what we do know is Portugal has passed a law that says any UK passport holder in Portugal by 30th of this month will be able to register residency as a right until 31st December 2020.

So the only way to be 110% sure of being able to register residency as a right is to be here by 30th January this year which is 17 days time.

https://imigrante.sef.pt/en/brexit/

atlasthemonk

Thank you all for your help....Is there any advantage of not being a NHR, ie as a resident without NHR status does the 183 day residency rule still apply and does all my world wide income become taxable in Portugal? etc

RichardHenshall

As things stand today, there is no downside to having NHR status. It is a (potential) benefit (delivered by specific reduced tax rates) available to certain 'new' residents for their first 10 years. It does not alter the residency requirements in any way because it is necessary to become a resident before you can apply for NHR status and to remain a resident to avail of the benefits.

It is important to note that if you want to be able to take advantage of NHR status for those 10 years you must apply for it before the end of March of the year following the one in which you became resident.

Diddion

If you are resident and eligible for NHR, it is daft not to apply for it: 5 minutes online, 3 simple questions and that’s it. No cost to apply and, as Richard says, no downside at all, even if you think there will be any tax benefits for you, personally. Just go for it - not worth agonising about.

Shanorme

I'm finding the whole thing slightly confusing. The word 'resident' is used quite casually and I can find little clarity on whether it means you rule yourself out for NHR by applying for residency because you have exceeded 90 days and then not applying for NHR in that year or whether it specifically only applies to you applying to be tax resident (which is the 1st step to applying for NHR. There is clearly a difference between both forms of residency and I have seen them used interchangeably as opposed to defining one the other or saying both apply in the scenario.

Diddion

An understandable confusion.

Firstof all, NHR is not a form of residency. It is purely a tax status, which is only available to residents. If you wish to obtain that tax status, NHR, you have to follow various rules, notably:

1. Apply by the end of March of of the year following the the year during which you first became a resident
2. Not have been a resident here during any of the previous 5 years.

So, the question is: Would the Portuguese system regard your now as a tax resident and, if so, when did that all start? If you would like to post the various dates relevant to your situation, you will get a view from forum members.

Shanorme

I have held off doing anything. The reason it has occurred to me is because of the following reasons:

1) Going through last year's calendar, a couple of days ago, I noticed I had spent 93 days in Portugal last year - which means, I should formalise my right of residence, HOWEVER
2) I do spend less than 183 days in Portugal
3) Formalising my residence would Brexit-proof me to a degree.
4) Formalising my residence would NOT make me tax resident but would potentially preclude me from applying for NHR if there is no distinction between 'formalising one's residence' and becoming 'tax resident'. I can no find a clear source, which makes a distinction whether residency is classed as both 'tax resident' and 'formalising residency', either or both.

As a further note, doing some research on NHR, I'm not entirely certain the benefit is as substantial as my initial impression - there is also the fact that, once the UK becomes a 3rd country, NHR might be irrelevant (there is a chance my timing will align but there is no certainty). Much of my 'retirement' income will be derived from sources that do not benefit from NHR or by the time I can access it, the 10 years will probably have passed, rendering it a moot point. I would still like to understand the implications though.

Diddion

.....do you have a property in Portugal and if so, importantly, is your fiscal number registered against thar Portuguese address or the UK address?

Shanorme

Yes and I'm not actually certain (I'll need to check) but I live in the UK and I am tax resident in the UK.

Shanorme

Gosh.... I thought that was going to be a long search but surprisingly, it's filed where it belongs! The fiscal number is registered against my UK address.

Diddion

That being the case, I cannot see that there is a problem. You are, I believe, not a Portuguese resident, and of course are not eligible for NHR, but will certainly remain within the UK tax system. If, in the future, you do choose to live in Portugal, as long as you retain and use a UK property, then it is worth bearing in mind that (whatever other residency you might obtain) you will remain a UK taxpayer. Gets complicated. You will be a PT taxpayer if you do spend over 183 days here, as you already know, or if you have a property on 31 December with the intention of staying there permanently. Here is quite a good explanation from Blevins Franks: Blevins Franks - Tax Residency or a rather more elegantly written one from KPMG KPMG Tax residency think that the property issue can be a source of question, so it makes sense to maintain, and to keep long term, travel records as evidence that you are not in the country for 183 days - bear in mind that this is within a rolling 12 months, not a calendar year.

I am pretty confident that there is nothing about 90 days to trigger Portuguese tax residency, as I believe it is something to do with having to register your presence in the country. Perhaps others can throw light on this.