Are you a British Expat facing Brexit in Portugal? …actions to consider pre 29th March

There is no one who can provide certainty of what will happen as Brexit approaches, and entire EU expat communities, including British expats in Portugal, are among those who wait with baited breath as we head towards 29th March.

In December 2017 Theresa May reached agreement with the European Union, that guaranteed protection of the EU rights for British Nationals living in Member States. This provided certainty to be able to access certain healthcare rights, pension and other benefits, and brought some reassurance to many, but it is interesting that some countries have gone one step further to outline no-deal contingency plans for Britons living in their countries.

One of those countries is Portugal, a country which introduced the ‘Non Habitual Tax Resident’ scheme in 2009, mainly in an attempt to resurrect its economy. This regime allows qualifying individuals, including British Nationals.  to eliminate taxes for up to 10 years on most foreign sourced income. This was a rare opportunity to reduce income tax to zero on income from UK pensions, royalties or dividends, and encouraged many British High Net Worth individuals to relocate, enjoying everything else Portugal had to offer such as the fabulous climate, manageable UK commute to visit family still in the UK, and access to first class healthcare.

Portugal has seen significant growth and investment since the introduction of the scheme, and perhaps because of this, they are keen to protect the rights of British Citizens living in Portugal, announcing a series of Brexit no deal contingency measures in January, extending access to healthcare and social security to UK nationals, additionally confirming that no visas will be required by Britons to enter Portugal, with separate ‘fast track’ lanes at airports and continued recognition of British driving licenses and academic qualifications.

The Portuguese government has committed to maintain existing residency rights, including ongoing access to the Non Habitual Residence scheme, for those who are ‘lawfully residing’ in the country before the withdrawal date. There is also a proposed Brexit transition period, ie delaying its full impact until 31 December 2020, but this may not be available in a no deal scenario, so it’s important that ‘residence’ is secured by 29th March 2019.

For those who are already living in Portugal, there are a number of things that can be done to help evidence residence there, such as :

• Apply for a residence certificate
• Formally register with the Portuguese tax office
• Apply for permanent residency (if long term resident > 5 years)
• Register for National Health Card
• Open a local bank account
• Arrange to have a Portuguese Will

The clock is definitely ticking in terms of any additional evidence needed by 29th March, but whatever happens after Brexit, we would always recommend cross border professional tax advice to ensure tax compliance at every level.

With help from our ‘Accelerate’ and TIAG overseas partner firms based in Europe, including Portugal, we can provide bespoke and specialist joined up tax advice, ensuring compliance obligations in the UK and other EU countries are readily met, as well as making recommendations to mitigate short and long term worldwide tax exposure.

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