Annetje

Am I right in saying that, if one dies (nationality Belgian not UK), the Portuguese inheritance law will be applied ?
I have no problem with that.
However, I do not have any children of my own but 2 stepchildren (English). My 5 brothers and sisters are Belgian.
All assets in Portugal will be split 50 % for stepchildren and 50 % for the Belgian side (I will make a Portuguese will).

I think that means they all have to pay 10 % stamp duty ???
If they all agree to sell my property (my main residence) do they also have to pay 25 % of Capital Gains tax ???
And what taxes on Portuguese accounts (Current, savings, etc.) ???

Confused.com

Red Eric

I'm not sure why you feel confused - you seem to have an excellent grasp on the matter to me.

A couple of minor comments are all I can offer :
Certainly if you die intestate, Portuguese succession law would apply in order to decide who should inherit.

If you make a will, it can either be in accordance with Portuguese law or you can choose, as a resident foreign national, to expicitly state that your will is made in accordance with the law of your country of nationality and have your estate divided accordingly.

Yes, as they aren't direct descendants (or ascendants) stamp duty is payable (but obviously each only declares and pays the duty on their portion of the inheritance).

As far as the property goes, both stamp duty and a further tax of 0.8% are payable, calculated on the Valor Patrimonial Tributário, which is the base figure on which the annual municipal property tax is calculated, rather than the notional market value.

If they sell the property, the CGT is calculated on the difference between the figure on which stamp duty etc was paid and the sale price. For non-residents, it's 28% of the full gain but residents of other EU member states can opt for taxation at PT marginal rates, which would mean declaring their worldwide income to the PT authorities and being taxed on 50% of the gain at whatever marginal rate (ie tax band) would apply to a PT resident with that income.

Generally the 10% stamp duty applies. I think certain categories such as government bonds and investment funds might be exempt, though.

Annetje

Right, OK, think that my headache just went away.
Everything gets a bit complicated when 3 countries are involved (got wills all over the place )

So the clever thing is, to sell the house just before I pop
All left to do now is : sort out France and move

Thank you

liveaboard

I think the inheritance law was changed a couple of years ago; now everyone is under the jurisdiction of their country of nationality, not their country of residence, and there is no choice in the matter.

A friend of mine ran afoul of this, assuming that as a 30 year resident, Portuguese law would apply. I expect his son and his new wife will be in court for decades to come.

As I haven't dealt with it personally, my recollection may be imperfect.
Anyway, best to check with an expert, and have your will[s] updated from time to time if you want to avoid trouble for your heirs.

Annetje

Oh dear, I based my knowledge () on the following art.

https://e-justice.europa.eu/content_...sion-166-en.do

In principle, the courts of the Member State in which citizens had their last habitual residence will have jurisdiction to deal with the succession and the law of this Member State will apply.

I do understand that the UK does not apply this regulation.
That's why I specified I am Belgian.

However, maybe this all has changed recently ? Do you have further info ? I can't find more recent information ... having said that, this art was updated 08-05 this year. I think the nationality is the difference here.

dmu

Hi from the France forum! If you own property in France, your Notaire must have told you what Taxe de Succession your step-children and siblings must pay on their respective share of their inheritance. And if your step-children aren't legally related to you, the percentage is 60%. This Taxe must be paid by each named heir, whichever National Law is chosen, and within 6 months. Which means a quick sale is often necessary in order to pay (alternately the heirs can refuse the inheritance).
Conclusion, sell any French property ASAP, even at a reduced price, before you pop off. Your heirs will thank you!

Annetje

Yes, thanks for that.
It is the main reason for selling up in France.
And since I decided to sell anyway, I thought it was a good idea to change my life and invest in a new one in Portugal.

It is NOT my plan to pop off soon though but by experience, we don't have anything to say regarding that matter

By the way, the amount of countries not accepting step children like your own is amazing. One would think, with all the new recomposed families, they would change the laws.

Red Eric

Maybe it's different for non EU citizens but as far as we are concerned you are correct - Portugal applies the law according to that EU regulation as of 17th August 2015.

Annetje

liveaboard

Written by Denis Swing-Green at Eurofinesco, published 2017;

"As a foreigner in Portugal, the rules of domicile in your jurisdiction of origin may be the ones that govern the succession of your estate, For Portuguese law to be considered to be the applicable "personal law" (the body of law that governs one's person) you must make this choice in writing, based on the EU directive known as Brussels IV. Keep in mind that the UK, Ireland, and Denmark are not signatories to this policy."

So I was incorrect in my earlier post, you do have a choice in the matter; but you have to take an action, it's not automatic.

Annetje

Red Eric

That's odd.

Blevins Franks, amongst many, many other sources (including a lot of PT newspaper articles, bank websites etc) have it completely the opposite way round :
Unless Swing-Green is referring to something else? I'm not quite with the full context of exactly what he's saying in that short extract.

Clearly the best course of action is to make a will in which you state explicitly which you wish to apply, anyway.

LindaT

Hi,

Just confirming the latest you guys have posted (for EU nationalities) - law is such that Portuguese law WILL apply to legal residents automatically UNLESS you stipulate in your latest Will and Testament (or update it) to specify that you wish the inheritance law of....x country - being that of your Nationality,not just any free choice. (Austria for my hubs). You DO NOT update your will or fail to mention this in a new one - Portugal law applies. Used to be nationality - but EU decided simpler if law of country where RESIDENT applies (and you can opt for your own country should you so wish).

Just done this so know for sure.......Thanks all and take care as ever

Pilou

Exactly.
Sometimes people forget that this is the answer to the question 'who gets what'. The EU-law does not talk about where do I need to pay the tax on the inheritance.
Two different things!!

Red Eric

That's as may be but the information above about the incidence of stamp duty applies as far as any of the deceased's estate located in Portugal is concerned, regardless of any other taxes that might apply in the country of residence of the heirs.

Here's a fine and very thorough document which I've just come across - it has examples covering various scenarios of both the application of the succession law and the payment of PT tax. It's far and away the most comprehensive explanation I've come across so far.

INHERITANCE AND TAX LAW : THE EUROPEAN UNION SUCCESSION REGULATION