NHR and UK main property sale- capital gains implications.

Hi and welcome to the Forum.

In general where you are assessed for and what you pay as taxes is decided by where you live, they call it residence.  Generally, this is decided by where you spend the majority of a tax year, so 6 months or more in Portugal, you would be deemed as being resident there and all that entails.  There may well be local Portugese laws that say that as far as taxes are concerned, you are regarded as "resident" the day you arrive or some other qualification.

There is a double taxation agreement in place between Portugal and the UK; you can download a copy from this link, I'd advise that you read it and if your tax affairs are complicated, to speak to a tax consultant so you can make the best provision for yourself.

Somebody with direct experience of what to do may come along shortly until then I hope this has helped.

Cynic
Expat Team

The general rule as expounded by 'Cynic' is that the country of residence has unlimited taxing rights on its residents.

The Double tax treaty between Portugal and the UK (down loadable with a basic internet search) attributes the first taxing rights on the disposal of property to the country where the property is situated and secondly to the country of residence ie. both countries have the right to tax capital gains on the disposal of fixed property.

Under the nhr rules, provided the tax payer is properly in the system, provides that capital gains where the other country has the right to tax, will be tax free provided that the country is not listed in the Portuguese Black list (unless Portugal has entered into a double tax treaty with such country). In effect any capital gain will be tax free in Portugal, though the profit will be taken into account to determine the tax rate on income subject to ordinary tax in Portugal if any. The tax authority has published a tax ruling on this several years ago.

Many thanks to both of you, and apologies for the delay.. I can confirm that both of your responses stood up to the qualified accountant versions..

However, and I'm so surprised that this simply doesn't exist ANYWHERE..

If tax resident in PT, your "main residence" in the UK cannot be deemed to be main when it is not that.. and this has UK Capital Gains implications of what could be some quite significant shift from essentially a tax-free sale of the main property to a CGT on what is now essentially a second home.

All very vague, and despite spending both time and money on exploring this topic, no one will commit to an answer.

I cannot believe that there isn't anyone here that doesn't still have their UK home still there, with a view to either sell/rent and not understand the huge potential HMRC bill that would come their way on the sale of that property.

anthonyn19 wrote:

Many thanks to both of you, and apologies for the delay.. I can confirm that both of your responses stood up to the qualified accountant versions.. .

Hi again.

No problem.  My experience is that things like tax, work permits etc are all things that can be changed at the sweep of a politicians pen; they tend to be political in nature.

For this reason, I keep on top of the basics, the rest of it, my real life experience was that you should speak to an experienced, qualified professional.  It's one of the added costs of being an Expat.

I wish you the best of luck anyhow.

Cynic
Expat Team

It is a question of fact - and in respect of UK tax laws, best obtained from a UK professional (and one who understands and deals with this type of issue). Many accountants and other professionals never see or deal with international movers, and therefore their practical experience will be limited. Also remember that each case is a case. Your circumstances will not be identical to your neighbours' or your best friend.