Portugal announces end of NHR Tax regime
Last week, António Costa stated in an interview that he intends to phase-out the highly beneficial NHR tax regime by 2024. But, for now, there is good news, individuals who have registered for the scheme before 2024 will be able to continue to benefit for the foreseeable future. It remains to be seen whether the existing claimants will be phased before the end of the ordinary 10-year cap. However, the uncertainty surrounding the NHR tax regime may cause some individuals to reconsider their stay in Portugal and their future.
For any former UK tax resident individuals affected by the change or considering relocating away from Portugal, UK tax advice should be sought before taking any action.
For some, they may be caught by the temporary non-resident rules, whereby if they reacquire UK tax residence in 5 years or less, they may be taxed on income and gains events realised while they were non-UK tax resident in the UK on their year of return. For others, they may have left the UK with the aim of establishing a domicile of choice outside the UK, which could be affected if relocating elsewhere.
It is worth noting that not all structures are transferrable between jurisdictions. For example, a structure that allowed an individual to fully maximise the efficiencies available in Portugal may not be fit for purpose elsewhere.
There are many jurisdictions that have welcoming tax regimes for internationally mobile individuals, including Italy, Cyprus, the Channel Islands, Monaco, United Arab Emirates, Switzerland and, for the time-being, the UK.