Diddion

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!

TonyJ1

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is there chapter and verse you could supply that I could cite on date hat the new rules will come into force, if I wanted to challenge what my accountant told me?[/QUOTE]

Yes - s/he (or you) must look at the changes to the tax law that went through parliament. This law has not as yet been published but this should be soon. The clause dealing with the pre and post approval procedures are complex and maybe your accountant has not read these clauses properly. In summary, until the law has been approved, then the old law applies, after the new law comes into effect, the new law. These processes are sensitive to dates

orangeblossom

Thanks for this clarification Tony and for the clarifications of others It seems that the information I was given about having to change one's address at the Financas before you apply and only being able to apply from the date when this had been done was correct but the information about when the new law would come into force was incorrect. I've been off the site for a few days sorting out problems with my. solar panels and as I'm leaving on Saturday and won't be back till part way through March, I will have to hope that it ends up being later than 1st March if I still want to go ahead. Not going to change my address at Financas till I know because that would just complicate things in the event that I was too late.

Diddion

I cannot for the life of me understand why you are delaying this.

Red Eric

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?

TonyJ1

You can back date your residence to the effective date you became resident - special form to be completed, if that is what you want to do. You might be subject to a penalty for late change of address, but this might be the lesser evil

Red Eric

I'm not getting at anyone here and I know orangeblossom is doing her best to comply with all the regs and simply to avail herself of a well-publicised benefit should it actually be on offer in her circumstances.

However, I still fail to see how anyone can qualify for NHR if not actually resident and tax resident at the time of application. One of orangeblossom's very understandable concerns as I see it - and one which would be particularly relevant if NHR were out of the equation - is not to accidentally fall into being treated as tax resident when she isn't and end up liable for tax on all her income. Now I know that's hardly likely to happen, not least because despite holding a residency registration certificate, she hasn't spent much longer than 90 days (if that, even) in the country before returning to the UK and is well short of the 183 before the tax authority here would even consider her resident if they found out.

I do understand that you can be tax resident for part of a year and I understand that you could move intending to stay and then have a change of plans and not remain for whatever reason (as orangeblossom appears to have done). So in her current situation - where she holds a residency registration certificate in which the tax authorities appear to set very little store (I think ) and never having previously reported herself as tax resident, and not intending to be tax resident for the foreseeable future - how can she be eligible to say she's tax resident in order to acquire NHR status for its future benefit to her? After all, if she's declaring her fiscal residence as Portugal, is she not simultaneously saying she's ceasing that residence in the UK?

I hope this doesn't come across as either pedantic or judgemental - it's really not supposed to be.

I do understand the facility that is available for suspension of the status once acquired, so, for example one could reside in PT with NHR status for a year or more and at any time within the 10 years, formally notify the tax office of a change of country of residence and request a suspension of NHR and then resume it on return but that doesn't seem to apply here.

Cliffo

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Thanks Didion and loafingalong

Using the search you suggested I was able to find the correct page for registration. 👍😊

TonyJ1

Whether you / she ceases to be tax resident in the UK - it is up to her to invoke that - and the UK will do the necessary checks - usually, but not allways HMRC request the 'Form DT Individual' to be completed, until that is done, usually HMRC considers the person to be still resident for UK tax purposes

Red Eric

So that deals with the practical aspect at the UK end.

From the PT point of view then, is it the intention that someone who has not actually transferred their fiscal residence / their "centre of interests / life" to PT, can legitimately claim NHR in advance of doing so?

TonyJ1

From a Portuguese point of view, they will look at what is on their database. If you don't agree with their records, which are based on what you told them, there are mechanisms to have it adjusted - usually on the production of backing paperwork.

Red Eric

Obviously I wouldn't try to coerce you into categorically stating anything you didn't want to, but that doesn't actually answer the question I asked, although it might be helpful to some of those on here asking questions.

We do appear to be in a position to discuss a concrete circumstance as an example but I respect your choice as to whether it's appropriate to do so.

Anyway, it's changing shortly, so perhaps there might not be so many questions in future.

TonyJ1

Any concrete examples would have to be evaluated, and then the appropriate paperwork work obtained to support position, if appropriate, or in some cases impossible to do anything about it. Otherwise too complicated to set out different hypothesis.