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Still more NHR questions

Still more NHR questions

Old May 23rd 2020, 9:51 pm
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Default Still more NHR questions

Apologies for yet more NHR questions. I believe I have searched / read every post here and on other forums, but still am not clear on some aspects that relate to my situation.

Part of my problem is that although I am both British and Canadian, my tax questions relate to Canada. If there are ~ 30,000 people who have signed up for NHR, the number of people from Canada appears to be in the hundreds – so not a lot of info.

Question 1. Can someone recommend a tax lawyer / advogado that could potentially pose questions to the tax authorities to get a ruling on how income from Canada would be taxed? I feel like it would be worthwhile to have an actual ruling in advance rather than hoping things work out the way I may wish once I pitch up in the country. (pm or respond please) Algarve region is my planned destination, if that matters.


Question 2. I believe I understand how foreign dividends and capital gains will be taxed under NHR - My problem is that my private pension from Canada is sheltered there in a tax wrapper – something like an ISA in UK where you can buy an sell shares inside your account. I need to get a ruling if the tax shelter wrapper in Canada is recognized by Portugal – specifically related to capital gains and dividends on investments inside the pension account. If I were to decide to sell certain stocks inside my pension account – example; as I get older, I will probably get more conservative in my investment approach. Does this trigger a capital gains event as far as Portugal is concerned? I can say definitely that the UK does not recognize the tax-sheltered nature of my private pension in Canada. Neither does Mexico, but the U.S. does.


Question 3. My periodic pension payments from the account will be taxed at source in Canada at the rate of 15%. Canada / Portugal tax treaty seems to indicate that those taxes paid should offer a credit against any taxes due on pension in Portugal. I think that means those pension payments will be subject to 10% tax in Portugal with the revised NHR program. If I have paid 15% in source country, does that offset the 10% due to Portugal? Specific to revised 2020 NHR scheme.


Question 4. Given that NHR began in 2009, has anyone here been through or know anyone who has completed the 10 years of NHR? What happened in year 11? Extension or just higher taxes?

I realize that taxation should not be the only or main consideration for why to move, but for me it is a significant reason. Any advice / opinion welcome

Last edited by Vinny17; May 23rd 2020 at 10:04 pm.
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Old May 24th 2020, 10:25 am
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Default Re: Still more NHR questions

I'll PM you, if I may.
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Old May 26th 2020, 9:21 am
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Default Re: Still more NHR questions

Originally Posted by Vinny17 View Post
Apologies for yet more NHR questions. I believe I have searched / read every post here and on other forums, but still am not clear on some aspects that relate to my situation.

Part of my problem is that although I am both British and Canadian, my tax questions relate to Canada. If there are ~ 30,000 people who have signed up for NHR, the number of people from Canada appears to be in the hundreds – so not a lot of info.

Question 1. Can someone recommend a tax lawyer / advogado that could potentially pose questions to the tax authorities to get a ruling on how income from Canada would be taxed? I feel like it would be worthwhile to have an actual ruling in advance rather than hoping things work out the way I may wish once I pitch up in the country. (pm or respond please) Algarve region is my planned destination, if that matters.


Question 2. I believe I understand how foreign dividends and capital gains will be taxed under NHR - My problem is that my private pension from Canada is sheltered there in a tax wrapper – something like an ISA in UK where you can buy an sell shares inside your account. I need to get a ruling if the tax shelter wrapper in Canada is recognized by Portugal – specifically related to capital gains and dividends on investments inside the pension account. If I were to decide to sell certain stocks inside my pension account – example; as I get older, I will probably get more conservative in my investment approach. Does this trigger a capital gains event as far as Portugal is concerned? I can say definitely that the UK does not recognize the tax-sheltered nature of my private pension in Canada. Neither does Mexico, but the U.S. does.


Question 3. My periodic pension payments from the account will be taxed at source in Canada at the rate of 15%. Canada / Portugal tax treaty seems to indicate that those taxes paid should offer a credit against any taxes due on pension in Portugal. I think that means those pension payments will be subject to 10% tax in Portugal with the revised NHR program. If I have paid 15% in source country, does that offset the 10% due to Portugal? Specific to revised 2020 NHR scheme.


Question 4. Given that NHR began in 2009, has anyone here been through or know anyone who has completed the 10 years of NHR? What happened in year 11? Extension or just higher taxes?

I realize that taxation should not be the only or main consideration for why to move, but for me it is a significant reason. Any advice / opinion welcome
Tax authority do give rulings - may or may not publish these at the discretion of the tax authority (names etc will be excised)

Follow up to question 2

Explain more how this instrument is considered in Canada - is it closer to an individualised savings instrument even if held in your name? - ie held by a trustee through a trust structure? If held / formally owned by a trust, you get different answers than if you can access it at will - ie you have ready access but subject to tax penalty or under your full control, don't have to notify anybody in order to cash in investments except tax authority.

Question 3 - by option of the taxpayer, be taxed on the net at 10% or else, added to other income and taxed at the 10% - probably need to make proof of taxes paid in Canada - in which case, the taxes paid in Canada can be set off against Portuguese taxes - take note that there is a Canadian$ 12,000 exemption before the tax in Canada kicks in, and also taxes could be lower if aggregating all income (?).

Question 4 - subject to normal PT taxes
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Old May 26th 2020, 11:18 am
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Default Re: Still more NHR questions

Thank you for the pm's and replies.
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Old May 26th 2020, 1:37 pm
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Default Re: Still more NHR questions

If the PMs were useful, it's a pity they couldn't have been shared on the forum, where the questions were asked.
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Old May 26th 2020, 1:45 pm
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Default Re: Still more NHR questions

Originally Posted by Red Eric View Post
If the PMs were useful, it's a pity they couldn't have been shared on the forum, where the questions were asked.
PM covered some of the NHR detail which I had previously posted on various NHR threads on here, but outlined the areas where I was not able to get sufficient advice on here to proceed to NHR myself. It was in line with the sort of queries that the OP had.

It also included the name and address of a solicitor in Tavira who had provided some critical advice to me - regarding tax haven income* - and who on the face of it had indicated that she was 'equipped' to handle a full NHR application and then further tax filings. That is unproven, so far, so I left it as a PM.

The sum of the parts of a number of different summations of threads on here, regarding treatment of Capital Gains, Pension Income, ISAs, periods when tax filings are still considered 'open', and the administration cost and effort associated with keeping up to date with PT tax-work (times two because my spouse has similar tax-work to mine) was a large part of what put me off proceeding to PT residency and NHR, so I'm here, for now.

*I posted queries regarding that several times on here and got nothing, presumably because my tax circumstances are pretty hybrid

Last edited by Pistolpete2; May 26th 2020 at 2:10 pm. Reason: The sum of the parts of a number of different summations of threads on here,
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Old May 26th 2020, 2:08 pm
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Default Re: Still more NHR questions

Thank you

Yes, I remember your questions being pretty difficult to get any solid info on and I wasn't being nosey about confidential circumstances or anything - I just like to see as much info shared as possible.

Last edited by Red Eric; May 26th 2020 at 2:11 pm.
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Old May 26th 2020, 2:19 pm
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Default Re: Still more NHR questions

Hello Red Eric: I just wanted to offer the option of keeping recommendation private, if the poster wanted that. If and when I get to the solution to my situation, I will share it here.

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Old Yesterday, 7:31 am
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Default Re: Still more NHR questions

Originally Posted by Vinny17 View Post
Hello Red Eric: I just wanted to offer the option of keeping recommendation private, if the poster wanted that. If and when I get to the solution to my situation, I will share it here.
Understood. No, you mustn't reveal content of PMs.

Good luck with finding authoritative answers - feedback would be great.

Sorry for growling
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