KatSou

Hello! Sorry if this question has been answered already I did a search and didn't find anything recent or relevant ..

I'm a dual UK/Russian citizens working permanently for a UK company, remotely (software developer ) and am looking to move to Algarve this October. I will be renting accommodation. I'm flexible in terms of how many months to be spending in Portugal, as I have a family in England and will be travelling there a few times during the year. I'm hoping to live in Portugal between 9 and 11 months during the year, for the next 3 years at least. After that - I will see.

Is there any legislation that I need to be aware of, or any other considerations?

I have a car but am undecided whether I'll be taking it with me.

Many thanks,
Kat

Loafing Along

If your stay is longer than 90 days you need to register at the Town Hall as a resident - your rental address will be fine.
After six months residence you are considered as being tax resident . It may be worth your while checking out Non-Habitual Residency ( NHR ) as there are certain skills which qualify for a reduced rate of taxation. I do not know if your's fits in this category . More information can be found in a very good guide which you can download in english on the Portuguese tax authorities website :Tax System in Portugal
You need to speak to a tax specialist as there will be some discussion about where your centre of economic interest lies as you state your family will remain in the UK
If you bring a car you must register it as a Portuguese vehicle after a set time ( check out the various threads on "Importing a car to Portugual".). It is a very bureaucratic process, time -consuming rather than complex.. This also brings with it the need to have a Portuguese driving licence.
Finally in the Algarve long-term rentals are very difficult to find, many places available over-winter but then owners tend to shift to short-term holiday rentals April/May - October.

dmu

Hi, in addition to Tax questions, an important issue to research is your Social Security coverage, as per the first link below. Your employers need to know and accept their obligations before you launch into your project (second link), and you might have to change your employment status...
HTH

https://europa.eu/youreurope/citizen...s/index_en.htm

https://www.gov.uk/guidance/paying-e...working-abroad

macliam

You don't say why you are thinking of moving to the Algarve, particularly if you have a family in the UK.

The rule of thumb is that "where" you work is less important than "where" you live. If you work for a foreign-based company whilst living in Portugal, you are working in Portugal and liable to the same tax, insurance and other restrictions as anyone else, regardless of your citizenship - and it is incumbent upon you to declare such work BEFORE commencement. . "Hiding" such employment is illegal and at least liable to a heavy fine, possibly for your employer also.... and be aware that in Portugal authorities often fine you first and let you appeal against it later. So, if your thought is to use your time in Portugal to avoid tax or other responsibilities, don't.

Living costs are cheaper in Portugal generally, but again, you will need to offset this against the costs of regular returns to the UK. Be aware that utility costs are generally higher than in the UK and current "roaming" options may not be available long-term. Property is cheaper than in the UK, but not cheap - long-term rental is aimed at the natives, so may not be what or where you desire it to be, long-term rental in "popular" areas may be both expensive and difficult to arrange.

As discussed elsewhere, bringing a car is only good for six months - so you need to weigh the costs of a return road-trip against the relatively cheap cost of flying. If you flout this rule, particularly in the Algarve, your vehicle is liable to be impounded unless YOU can prove it's legal. You may be interested in leasing.......

You need to be very sure that your plan will work and not make assumptions - otherwise it could be a costly exercise.

KatSou

Thank you for the info, all of this is a good starting point to investigate my plan

Just because you asked - my family in England are my parents, and I'm moving to Portugal because I enjoy changing scenery and experiencing different cultures. I've been living in Northern Ireland for the last 5 years, but it's too cold for me, so now I'd like to live somewhere warm - and I have friends in Portugal so why not!

KatSou

Hmm I'm not sure this applies to me - I'm not being posted, I can just work from literally anywhere... I own a property in England and have a permanent residential address there, pay taxes, NI contribs there and have a private pension. I'm aiming to retain England as my base (because that's where my parents live).. The only things I'll be doing in Portugal is paying rent and buying food - does that still put me in their tax bracket?

PS I'm not looking to avoid anything - I'm just looking for information on how to achieve what I want to do properly and legally. Thank you for your help

dingg

you retain a base in England and hmrc will want you to pay taxes to them ,

get a tax experts advice


good luck

christmasoompa

None of the above means you'll be tax resident in the UK though, if you're not living there. Tax residency is based on many things, but essentially wherever your permanent home is. If you're living in Portugal rather than the UK, you won't be likely to be tax resident in the UK any longer. You can however still pay voluntary NI contributions from abroad to keep increasing your UK pension pot.

KatSou

I consider my permanent home to stay in the UK, for sure.

KatSou

Will do, thank you!

dmu

The point being, if you are actually working in Portugal, even irregularly via internet, the Portuguese authorities will want you to pay into their Social Security System, either via your UK employers if you're salaried or your own Contributions as a freelance.
It sounds as though you're freelance at the moment? In which case you'd have to set up a business structure in Portugal but, if it's like France, the Authorities won't accept a self-employed person with only one client....
There have been many potential expats on the France forum wanting to do what you want to do, and, after having been given the above info, they have never come back with feedback. Which seems to indicate that the idea isn't feasible...

christmasoompa

But you say in your first post you'll be in Portugal for between 9 and 11 months of the year? So the UK will no longer be your permanent home if that is the case.

macliam

AIUI, the rule of thumb is that id you spend over 6 months in Portugal, you are tax-resident, whether or not you have registered for Portuguese residency. Thus, whilst you can "avoid" residency by not remaining in Portugal for more than 90 contiguous days at any one time, say by returning briefly to the UK or going elsewhere on holiday, you cannot avoid tax residency if you spend more that 6 months in Portugal within a given tax year. Just to make things even more complicated, the tax years aren't the same.....

As with all things, you can ignore all this if you want and run the risk...... but you will be illegal, which is an iffy road to go down, because Karma can be a bitch. Which reminds me of an ex-neighbour of my FiL in the Vouga. Back in the day (pre AirBnB), if I remember correctly, this German guy hit on the great idea of buying a walled property and letting out rooms in the main house, plus cooking the occasional meal and hosting weddings, etc. So he got his loan to buy the house from the Bank, spent a few months doing improvements and then set off. All went well for a couple of years and he became quite well-known in the village.... living the life. Then, at a catered wedding, one of the guests managed to knock over a fire-pit/barbecue or something and it all got a bit out of hand. So he called the bombeiros and they arrived, accompanied by the GNR....... who took one look and then asked their normal question - where was his license? From that, it all unrolled, no license, no special insurance, no change of use applied for, no notice to the bank, no tax, no.... you get the picture. They also took a dim view of his German-registered Merc and the unregistered motorcycle he used to "pop" into the village.

They impounded the vehicles and he was then prosecuted for running an unlicensed business and fined by the local council for no change of use filing. Then the Financas assessed his tax liablility, pretty much doubled it plus a bit - and billed him with 60 days to pay. Then his house insurance company refused to pay out for the damage and cancelled his cover. Then the bank withdrew his loan facility, due to lack of notice of usage, and gave him 90 days to pay off the loan. You get the picture. End result, the bank foreclosed and took the property and he headed off back to Germany in an attempt to avoid the tax bill. He failed - and not only had to come to an arrangement to pay the tax but was "notified" under the Schengen system for his troubles so was barred from return to Portugal or travel to other states using it. As I said, Karma..

That being said, it hasn't stopped other people trying the same.....

riv

As regards renting from October onwards, I do not believe you will have a problem finding somewhere pleasant at say Euros 600 per calendar month or even less, depending on how much comfort / space you want and whether you wish to be in a seaside resort or are happy to be more remote.

For an initial period, my suggestion would be find a flat to rent ~maybe a holiday location such as Manta Rota ( I only mention that because I have stayed there out of season, but there are many other places ) where your rent includes ALL utilities including fast internet and maybe TV and radio channels.

Finding somewhere all inclusive will be a LOT less hassle than renting somewhere with a headline rent much cheaper ( like 450 ~500 euros per month ) but then having to sort out your own separate contracts with the C mara, electricity, internet, etc.. Believe me, i have done both : for an initial period ( my recommendation is 3 months as this gives you time to settle in and see if it all suits you ~ but it does not commit you to stay for long, should the accommodation or town not suit you long term ) renting somewhere with all inclusive will save you a whole world of hassle.

I believe you could find an out of season ( so from October onwards ) seaside flat rental all inclusive for Euros 800 per cal month. Very few people want to rent out of season so the market should work in your favour. And if you like peace and quiet then it's a good solution. If you want a bit of 'buzz' then maybe Tavira would suit you. Being surrounded by beautiful buildings does give a lift to the spirit.

As regards the tax situation : this does sound a bit complicated. Why not write an initial letter to your current tax office in the UK and explain what you have a mind to do and ask whether your intended residence in Portugal from October means that you then have no tax liability in the UK, even if your work done remotely over the internet is for client/s in the UK and thus your income in generated in the UK ?

Keep a copy of the letter you write; and start a file of this official corres with the UK tax people [ as necessary you can start another one later with the Portuguese tax people ].

At the very least, the fact that you have written to the tax office explaining everything openly, will stand you in good stead if any issues should arise in months or even years to come.

I believe the tax people have a lot of discretion when it comes to levying penalties and the fact that you are plainly trying to remain entirely legitimate would be a factor in exercising that discretion, should you be found to have inadvertently not paid tax which you should have paid.

As regards the car issue : as you describe your situation ~ expecting to spend the greatest part of the year in Portugal but with one or two trips back per year to the UK ~ I would think that simplicity [ this is assuming your existing car is in good condition and you can renew its MOT just prior to driving to Portugal ] would dictate bringing the car with you at least for the initial six months period which is permitted. Driving in Portugal can be somewhat fraught, from the safety point of view, and for me anyway driving a car I am familiar with is safer than driving a hired one.

If all develops well during your first few months, and you are confirmed in your intention to carry on residing in Portugal, then you can commence the process for re ~registering the car with Portuguese plates, and claiming the exemption from tax available to new residents.

If all does not develop well and you decide to return permanently to the UK well you can just do that and you will not have the hassle of having to sell a second hand car you bought in Portugal.

These are just thoughts from the top of my head, but based on some experience of both owning and renting a property in the Algarve.

riv

I do not claim expertise in tax BUT I think the above may be misleading : where your income arises may well be a trigger for a duty to pay tax on that income.
DOMICILE ( entirely different from where you reside, albeit where you reside does contribute to determining where your domicile is ) can also affect tax liability.
And from what you have described your Domicile is definitely in England, not Portugal, and will remain England even when you move to Portugal.

As I set out in a separate comment : best to write to the tax office and ASK the question : this costs you nothing and stands you in good stead with the tax office.