RichardHenshall

Nothing wrong with re-using a good idea! Obviously it depends on your combined circumstances whether you can or can't make it work for you. I had assumed that 'you were the problem' but thought your OH might not be.

Pistolpete2

I was feeling bad at my ignorance of the specifics of an NHR application and then I stumbled upon this thread and details at posts #16 and #20 - my bolding

NHR applications and cutoff dates for old regime

"I have been talking to a neighbour about his NHR application. and I wonder if the following is right.
He has a NIF registered to a UK address. He has his Residencia which was obtained in January 2019, and is about to change his NIF to his Portuguese address, which he will do tomorrow. He has been advised that the first year of application for NHR will be 2020, despite his having had his Residencia last year - in other words, the date applicable to his NHR commencement will be the date of his NIF being registered to here.

This seems extraordinary to me, especially as I would have thought a statement that he became resident in 2020 on his NHR application would surely be inaccurate. Both a solicitor and an accountant have told him the same. Any comments or clarifications welcome!"

a response:

"When you say "he had his residencia last year", was that simply because he obtained a registration certificate from the Câmara or did he actually start residing and was in the country for more than 183 days?"

I guess it's no wonder we can attempt or at least ask about a nuanced approach to this thing of not only residencia but also NHR from time to time.

I accept the fact that once granted residencia there is seemingly only an overall requirement to be in PT for six months in twelve in order to obtain permanent residence but the year to year accumulation of meeting the requirement does have me a bit confused and also how it interfaces with tax residence and switching NHR on and off if need be.

I guess what I'm saying is that one could, after year one, discover that NHR in one's present financial 'predicament' is somewhat burdensome, leave Portugal for a year or so (maybe spend only 4-5 months there) and regain tax status elsewhere but return to PT having tweaked things for NHR simplicity having still retained residencia within the five year grant. Oh and still meet the overall stay requirement to obtain permanent residence after the fifth year.

NOW I have a feeling of deja vu because I recall quoting from an NHR 'expert' before that you could basically rent a broom-closet for a year at a time and only 'live' in it for a month a year and still actually live in your home country and keep the benefits of NHR and there are apparently many who do just that, though not in the UK, of course.

ricko

Do you know what the other required conditions are?

RichardHenshall

Do you have a particular scenario about which you require an opinion?

qianh

I am not sure, those scenarios sound complicated and it needs careful planning, even some people are doing it it doesn't mean it's fully legit, or in theory it's legal but in practice, dealing with bureaucracy in multiple countries can be a nightmare!

qianh

I think if someone doesn't want to be Portugal tax resident any more, he needs to change his address registered with financas to foreign address, He could come back 1 year later and regain Portugal tax status but I don't know this break is going to be used against him or not when he apply for permanent residence.

ricko

I was hoping that somebody knew the full set of
conditions, so that the maximum number of people
could benefit from the information.
At present, my own particular concern is with
retaining residency

RichardHenshall

I assume we're considering UK and Portugal only.

UK CGT is here.
Portuguese is here for individuals and probably elsewhere in the CIRS.
Double taxation treaty is here.
You also need to consider in which country the taxpayer is domiciled or resident, where the asset is located, what type of asset is involved etc etc. and whether a Portuguese resident has NHR status and probably some other things I've forgotten.

ricko

Sorry for the confusion, my question was in response to your information that NHR may neutralise PT CGT liability.
So I was wondering what other conditions in addition to NHR status would remove the CGT liability.

RichardHenshall

I'm assuming it's the bolded 'may' that concerns you. My statement was so phrased to avoid suggesting that NHR status = CGT-free or tax-free status in every case. There are many situations where Portuguese CGT will still be payable by someone with NHR status. A huge consideration is whether the property is immovable (ie real estate).

Start by assuming you pay tax in both jurisdictions and then start looking for the reasons why you might not pay tax in one or the other. When you find one, go back to the other country's rules and check that that reason doesn't now cause you to be taxable there instead, as might happen when tax havens are involved.

I'm sorry if it's a vague answer but it's a vague question.

ricko

Thanks for your patience.
I'm struggling with multiple problems, so I'll have to look at this
after dealing with some more pressing issues

ricko

Is there a formal procedure for leaving and then returning?

RichardHenshall

You are always supposed to have the address where you live on record with Finanças. Changing (in person) your address to your foreign address would suggest that you will be emigrating again. You can leave at any time but when you return, depending on how long you've been away, you may have to start again at the beginning in obtaining residency rights again, possibly as a 3rd country national this time. Temporary absences would not normally be specifically recorded.

Rambling archer

And note that if for some reason (eg staying out of the country for too long - is it two years you are allowed - not sure?) you come back to Portugal hoping to continue on NHR (non-habitually resident) status, you may have lost that status as you indeed HAVE been resident in the 5 years previous ... might get awfully complicated!

Red Eric

That's one that can be cleared up straight away with regard to the NHR aspect.

The "not resident for tax purposes within the previous 5 years" criteria only applies at the time of the initial application and is subsequently considered satisfied for the entire duration, even if there's a suspension part way through.

Report of confirmation of this by the AT here : Regime fiscal para estrangeiros pode ser suspenso e retomado mais tarde