Diddion

Valid points, Ukkram. My view, though, is that it is sensible to avoid such questions and potential battles with the authorities in the first place. I would imagine that it could be argued that if you have a property at the end of one year and return to live in it near the beginning of the next then the 'holiday' component is when you are away and in the UK.

dingg

Diddion , I can see the case where the uk would decide I was tax resident and pt would claim I was tax resident for the same period , madness and much confusion abounds

Diddion

Could be, though generally there are bits in the rules which avoid that complication. Remember, though, that NHR is very generous; for example, overseas earned income is free of tax, so even if you were taxed in the UK on earned income there should be no further tax levied by Portugal. Also you could make use of split-year treatment to end your UK residency. It is a bit of a minefield, isn't it! And interpretation of the rules is hardly easy.

dingg

We can certainly agree on that , as it is I'll just go with the flow on arrival in pt but hopefully will be able to avoid the split treatment issue , as long as I can achieve the aim of nhr status the rest doesn't make too much difference tbh and can all be sorted out without any massive hurdles to get over
Thks again!

Ukkram

Indeed. The DTA does not define the date of tax residency upon emigration. This is where the domestic tax laws apply.
If you have been ordinarily resident in the UK for the past 5 years and 91 days in the present year then you will be regarded as a UK resident until the date of emigration.

In Portugal you will be regarded as tax resident from the day of intention to stay under the domestic law and will be regarded as tax resident for the whole tax year.

Now we have a conflict that I have been fighting for 3 years. This may end up in a tax court.

Diddion

How miserable for you, Ukkram. Which country is playing up? I would really be interested to know a little more about this, and how it arose, if you are willing.

dingg

Ukkram , it may be slightly different for the uk now as a new system came into play following the finance act of 2013 , tax residency all hinges on days in the uk and number of ties remaining in the uk ie property you'd be able to stay in and uk resident family.
For anyone interested kpmg have a statutory residence flowchart which summarises quite quickly what hmrc ukgov try to show on their web pages

Ukkram

Sure.

Portugal is the culprit. The domestic tax law in South Africa states that when one emigrates all movable property such as securities and stocks will be deemed as sold and Capital Gains Tax must be paid on the day of exit and deemed as re-purchased at the same price the next day.

This was paid to SA but Portugal will not accept the "deemed" sale and will not accept the reset of the base cost.

When immigrants to SA arrive their assets are reset to a new base cost to the value at arrival.
Sadly PT does not reciprocate.

Diddion

A small twist which could have caught us out is that if you live in a property for 90 days of which 30 are in the tax year in question, you will be regarded as UK tax resident, irrespective of the number of ties. Consequently we will be moving out of this house (and putting it into the hands of a letting agent) the end of April - and will be homeless until we sail to Santander on 20th May. Homeless and jobless!

bazzer70

Grateful for any any input and certainly not considered railroading dingg!
This is getting quite scary - I was originally planning on doing all the legwork/paperwork myself but a few days ago I thought maybe I will need to get experts involved but THEN on other threads I have seen that this too is a minefield!

dingg

I'm in the same two minds , BUT I do like a challenge so will give it a bash myself 😄 , in fact some who have used agents, tax experts etc have had more issues than some who have did it themselves , that leads me to think some of the agents know less than us or spin it out to keep themselves employed , if you go it alone you only have yourself to blame 😢

scapetown

whow now I am getting really worried reading all this, we too are moving to PT from South Africa (although we are British) so is the best case senario all round to move in January? we were planning on moving mid year.

Loafing Along

Obviously a good idea to be here pre-Brexit and registered as a resident before that date but apart from that move at the date that suits you best - there is always some "wrinkle" about "Maybe if" but if you are moving to become a permanent resident a few months in your first year are neither here nor there. From what I recall from other posts you may find actually leaving South Africa in an adminstrative /fiscal sense more complex than settling in here.

scapetown

Thanks so much for the reply, we havent got that far yet tieing everything up here as we still need to sell the house which we have been putting off to see what would happen with Cyril our new president and also being in Cape Town the water shortage situation, but hopefully both are looking a bit more promising and at least the Rand is improving but as you say the admin /fiscal here may be a challenge in itself, but we will definitely be applying for permanent residence.

Ukkram

We arrived here from Cape Town on 16 June 2014 and found that it is the worst time to find accomodation. Having lived in the cool False Bay area we nearly died from heat stroke lugging our suitcases around trying to find rental accomodation. My wife and kid are still traumatised with that experience.