The place to be
In the past few years, Portugal has soared in popularity for UK citizens looking to live abroad. There are a few clear reasons for Portugal to be a firm favourite with British citizens emigrating to sunnier shores.
1) Community and way of life
With an ever-increasing number of UK citizens choosing Portugal, there are areas where there is a ready-made ex-pat community, making your transition to living abroad much easier. Of course, it’s always important to learn the language and integrate with the locals but having a group of people who understand how you feel when you arrive can make it much easier for you to settle into your new surroundings.
2) Tax incentives
Portugal offers some great tax incentives to encourage British and other citizens to become residents. The Portuguese Government runs the Non-Habitual Residence (NHR) tax programme, which aims to attract new investors and ‘high value’ residents to Portugal. The programme offers tax relief on some foreign income sources. For example, you may:
- Receive your pension paying only 10% tax
- Be exempt from tax on earnings from dividends and royalties
- Be entitled to the 20% flat rate on certain foreign source incomes
- Have tax exemption for gifts and inheritance to direct family members
- Move funds into Portugal free of charge
To register for and maintain the NHR scheme, you must apply to the Portuguese Tax authority (Finanças) by 31 March of each year with proof of your address in Portugal as of 31 December of the previous year.
3) Cost of living
When comparing the cost of living to the UK, Portugal comes out very favourably; around 45% cheaper than London. Everyday essentials such as food, fuel, and utilities are significantly less and when you consider the lower taxes, you begin to understand why it is becoming such a popular emigration destination.
4) Access to Europe
Becoming a Portuguese resident may be an attractive option for many British citizens who want to have better access to Europe since the UK left the EU. The Golden Residence by Investment Programme, also known as Golden Visa, enables non-EU citizens to become Portuguese residents by making an investment into the Portuguese economy, either through buying property or other assets or starting a business.
Other benefits include:
- You don’t have to move to Portugal to keep your residence permit. Staying in the country for seven days on average per year will suffice,
- You can be eligible to apply for Portuguese citizenship after five years. This is one of the quickest in Europe,
- Once you become a Portuguese citizen, you get visa-free access to 188 countries.
Alternatively, you can opt for a D7 visa, which is also known as a Type I Visa or Passive Income visa. If you have regular, sustainable income from financial investments or intellectual property that you can use to fund your lifestyle, you may be eligible for this type of visa.
This communication is based on our understanding of current taxation legislation and practices, which is subject to change and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity.
To find out more about moving to Portugal get in touch with Blacktower Financial.