Go Back  British Expats > Living & Moving Abroad > Europe > Portugal
Reload this Page >

Are pension lump sums treated as pensions or income when I'm NHR?

Are pension lump sums treated as pensions or income when I'm NHR?

Old Mar 13th 2020, 7:16 pm
  #1  
Forum Regular
Thread Starter
 
Joined: Oct 2019
Posts: 61
Juleskitoo is an unknown quantity at this point
Default Are pension lump sums treated as pensions or income when I'm NHR?

Hello,

I've tried without success to get this information from a tax specialist in Portugal who are proving particularly useless.

I'm about to press the button on gaining NHR, but have a lump sum pension which I'm going to cash in at the start of next month. My question is whether this is seen as part of my pension (and therefore taxed at 0-10% (depending on the change) or seen as income and therefore taxed (I'm assuming) quite heavily. Its going to be about £10K in value.

Many thanks in advance guys - I know some of you have provided really excellent advice on this forum on similar subjects. .

Jules
Juleskitoo is offline  
Old Mar 13th 2020, 8:38 pm
  #2  
BE Enthusiast
 
Joined: Jul 2016
Location: Alvaiázere, central Portugal
Posts: 591
Diddion has a reputation beyond reputeDiddion has a reputation beyond reputeDiddion has a reputation beyond reputeDiddion has a reputation beyond reputeDiddion has a reputation beyond reputeDiddion has a reputation beyond reputeDiddion has a reputation beyond reputeDiddion has a reputation beyond reputeDiddion has a reputation beyond reputeDiddion has a reputation beyond reputeDiddion has a reputation beyond repute
Default Re: Are pension lump sums treated as pensions or income when I'm NHR?

Originally Posted by Juleskitoo View Post
Hello,

I've tried without success to get this information from a tax specialist in Portugal who are proving particularly useless.

I'm about to press the button on gaining NHR, but have a lump sum pension which I'm going to cash in at the start of next month. My question is whether this is seen as part of my pension (and therefore taxed at 0-10% (depending on the change) or seen as income and therefore taxed (I'm assuming) quite heavily. Its going to be about £10K in value.

Many thanks in advance guys - I know some of you have provided really excellent advice on this forum on similar subjects. .

Jules
The tax free cash from pensions is a UK-specific arrangement, not recognised in Portugal. In other words, Portugal does not distinguish between pension lump sums and the remainder - it is all treated as income, and will all be taxed under your NHR regime, at 0 or 10%. Therefore, if you are not a Portuguese tax resident yet, it would make sense to take the tax free cash whilst a UK tax resident (but I think you must already be a PT tax resident, from your question), and the remainder in Portugal
Diddion is offline  
Old Mar 13th 2020, 9:21 pm
  #3  
Forum Regular
Thread Starter
 
Joined: Oct 2019
Posts: 61
Juleskitoo is an unknown quantity at this point
Default Re: Are pension lump sums treated as pensions or income when I'm NHR?

Originally Posted by Diddion View Post
The tax free cash from pensions is a UK-specific arrangement, not recognised in Portugal. In other words, Portugal does not distinguish between pension lump sums and the remainder - it is all treated as income, and will all be taxed under your NHR regime, at 0 or 10%. Therefore, if you are not a Portuguese tax resident yet, it would make sense to take the tax free cash whilst a UK tax resident (but I think you must already be a PT tax resident, from your question), and the remainder in Portugal
Ah, good man Diddion. I was hoping for some sound, clear advice so thanks for that. I'm not quite yet registered but know which way to jump now.

Thanks again,

Jules
Juleskitoo is offline  
Old Mar 13th 2020, 9:38 pm
  #4  
BE Enthusiast
 
Joined: Jul 2016
Location: Alvaiázere, central Portugal
Posts: 591
Diddion has a reputation beyond reputeDiddion has a reputation beyond reputeDiddion has a reputation beyond reputeDiddion has a reputation beyond reputeDiddion has a reputation beyond reputeDiddion has a reputation beyond reputeDiddion has a reputation beyond reputeDiddion has a reputation beyond reputeDiddion has a reputation beyond reputeDiddion has a reputation beyond reputeDiddion has a reputation beyond repute
Default Re: Are pension lump sums treated as pensions or income when I'm NHR?

Pleasure!
Diddion is offline  

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service - Do Not Sell My Personal Information -

Copyright © 2018 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.