Residency Status?

In terms of tax residency, if you live in Portugal more than 183 days of the fiscal year you are deemed to be a Portuguese resident and liable to pay tax in Portugal.

However, if your ties with the UK have not been completely or significantly severed, you may be liable for tax in the UK as well, that is up to the UK tax agency, whatever that is called. I am from Canada and I know that is the case in Canada, if there are still significant ties with Canada one may be deemed by CRA to be a Canadian resident even if one spends more than 183 days in another country.

You may want to check with a tax lawyer or accountant so you don't get to be taxed in both countries.

Hello ctomac,

Thank you for the clarification on this topic.

I am sure it will be useful to the OP.

Cheers,

Cheryl

Expat.com team

Thank you, ctomac.

Yes - I agree with all of that regarding dual taxation and I need (and have) to make annual tax returns to both Financas and HMRC each year.

My question is not tax related in particular.

Interesting that you confirm that - from Canadian perspective at least - that it is perfectly reasonable to be deemed Resident in both countries at once.

Example: Should I rent a Portuguese car from online website with intention to collect at my return to Portugal, I may be asked " Are you a UK Resident? "

As such, even though I am NHR, that answer is Yes.

These are the kinds of issues that I'd rather not get mixed up in debating should any damage subsequently occur.

UK resident for tax purposes is not the same with UK resident in general. You would be a UK resident if you lived more than 183 days (or whatever is the limit for the UK) of the year in the UK.

You may live zero days in UK and live permanently in Portugal and that makes you a Portuguese resident and possibly a UK resident for tax purposes.

So the question is "where do you live more than half of the year? UK or Portugal?"

You can't be in both at the same time. Since a normal year has 365 days, even with an almost even split you would have to live 183 days in one country and 182 in the other - which means you are a resident of the country where you lived 183 days and not a resident of the country where you lived 182 days only.

Interesting.

Thank you.

As NHR is "Non Habitual" (ie. Not living in Portugal) then I would have thought that, even if living in Portugal "for tax purposes" for 184 days (let's say, renting), you would primarily be a resident of UK (retaining main home, retaining ties) or holding joint residency in both countries although, I fully accept, the country which you remain 184 days within, can certainly own you for tax purposes

@slugsurmamates

Do you have a property in Portugal either rented or owned?

Do you have your Certificate of Registration of the European Union [CRUE]?  Not sure how Brits get this post Brexit.

As the holder of an Irish passport,  I got my Portuguese residency instantly and have my CRUE.

Are you a tax resident?  That is, do you have a NIF with your Portuguese address linked to it.  The document you download from the Government Finance Portal has your NIF with your Portuguese address?  You can't do anything in Portugal without a NIF.  It's similar to the National Insurance number in England but is used for everything.  At the supermarket, you can give the  checkout person your NIF.  All that does is tell the government what you are spending your money one.  Some Portuguese people I hear do it for everything.  Others don't do it at all.  I am one of them.

It would appear you would have your NIF if you have NHR status.  This has nothing to do with what you said.  It is a tax relief for foreigners who come to Portugal to live that gives them just a 10% tax rate on worldwide income for 10 years.

To pay taxes in Portugal, you have to be here for 183 days each fiscal year.  The 183 days can be made up of smaller amounts of time out of the country.  If you exceed 183 days, you are no longer liable to pay tax in Portugal as you are not considered a tax resident.  You can still be a resident.

That is about all I can tell you.  I have just gone through all of this and will apply for my NHR before 31 March 2023.

I lived in the UK since 2009 but moved to Portugal in September this year to be able to claim my Australian Age Pension.  Not possible in England or France. Portugal is a fabulous place to live.  The people are so friendly and helpful and English is widely spoken.  I don't even ask any more if the person speaks English.  If he/she doesn't, a person who does is called over.  Amazing.  All contact with organisations such as MEO, EDP and others can all be done in English. France needs to take a leaf out of Portugal's book. 

Hope what I have said helps. Glenn

@slugsurmamates  There is no such thing as joint residency (or dual residency). You can only be resident in one country at any given time. But for tax purposes you may be deemed resident in 5 or 10 or more different countries at the same time - governments love to tax.

Ctomac.

I'm not quite sure about that.

Here is a direct quote and same can be viewed on a number of taxation consultancy websites.

I do, agree, however that you ought to take logical steps to ensure you aren't taxed twice , even under dual taxation conditions.

" Migrants

It is possible to be resident for tax purposes in more than one country at the same time. This is known as dual residence. "

Again.

"Multiple residencies

It is possible for you to be resident in more than one country at any given time and it will fully depend on how you've spent your time and what the rules are in each country - the major issue here is that if you don't manage it carefully, you may be taxed twice "

Hello Alan (If I may?)

Complete newbie hence unsure of how to work things on the site.

Am I sending you the equivalent of a personal message?

I only ask because I saw on one of your older posts that you have accommodation to rent and was wondering if that was still the case.

Bob

(I'm alos here: [***] but under my middle name of Fraser.)

There can be some confusion as there is physical residence, legal residence, and tax residence.

You can only (unless you are Dr. Strange) physically be in one place at one time. :-)

However, you can be legally resident in multiple countries.

And you can be tax resident in one or more countries (although for most us, it would be one or two only). The commonest condition for tax residence is the "substantial presence test" of 183 days or more per year, but there are others (including "centre of economic interests"). Some countries deem you tax resident based on nationality or legal residence. You can even (surprisingly) be a non-resident tax payer.

Most of us lead simple lives where we have physical presence, a home, a job, legal and tax residence all in one (and only one) country. But even though it's common/typical, it's not the only option.

@ctomac is correct that you could, potentially, be deemed tax resident in several countries. But I think it's very hard (or impossible) to get to 5-10! Because it's usually triggered by "substantial presence" (the 183 days), that means only one country can grab you this year. Another country might retain you by virtue of you never having met the tax residence exit conditions (for UK), or holding citizenship (USA). So, I think, realistically, you could only be "tax resident" in 2 (or possibly 3, if you're American) countries. HOWEVER, you could, very easily, be a "non-resident taxpayer" in multiple countries depending on what assets you owned there (typically, stocks or real estate), and the income tax that is due by virtue of your ownership (rather than your residence or tax residence status).

@gwynj

Thank you.

That all sounds logical and in line with my - incomplete - understanding .

So, in my own case, NHR and spending over 183 days in Portugal, I am Tax Resident in Portugal and also a resident (non tax) in UK.

I say non-tax as, under Dual Taxation Agreements I have one or more Ties which determine how many days I can remain in UK in any given tax year. 

I make tax returns (and pay tax) each year in both countries , in my case primarily on property rental 

that originates in UK.

Appreciate the response and clarity .

@hanibal18

No problem

Responded privately to other post received 👍😃

@slugsurmamates

Yours is quite an interesting situation. To me, anyway. :-)

"Live" is a rather non-legal concept, and different folks use it in different ways. I would suggest that, actually, you "live" in both Portugal and UK in that you own a home there, and regularly spend time there. I live in Bulgaria, Cyprus and Spain (by the same test, that I own property there, and regularly spend time there). I still own a (former) home in Argentina, but I would not say I live there anymore (but I visit, very occasionally). On the other hand, if I stay in a hotel in the UK for a couple of weeks, or even stay in an Airbnb on a beach in Bali for a couple of months doing some digital nomading, most folks would be rather surprised if I said that I "lived" in London or Bali.

Like you, I am a UK citizen. By virtue of our citizenship, we don't need to obtain a right of legal residence in the UK (as a non-UK citizen would need). We retain that right by virtue of our passports/citizenship.

But, when we want to live in another country (for more than a few months) we need to obtain legal residence there (typically by going through the immigration formalities). You have obtained legal residence in Portugal (and I am guessing) you divide your time between Portugal and UK. I have legal residence in Bulgaria, Cyprus and Spain and I divide my time between these 3 countries, with a little travel to the UK and elsewhere.

I made a "clean break" from the UK many years ago, so I lost my UK tax residence there. However, you retained your ties so you never stopped being a UK tax resident. When you are a UK tax resident, it doesn't matter how few days you spend there. There are rules for acquiring tax residence, and rules for how you lose it, once acquired. These vary from country to country.

By becoming resident in Portugal, you acquired a 2nd tax residence country. However, Portugal has a special tax regime the Non-habitual Residence (NHR), which is, essentially, a low-tax option in a high-tax country for qualifying individuals.

To make it a bit complicated, the UK has some other unusual tests/terminology that you sometimes hear. "Domicile" is one that you mentioned. Another is "Ordinarily Resident". Domicile is quite unusual (I think the UK is one of the few that retains this concept), as it doesn't merely mean your "home" as in its dictionary definition. It's above my legal pay grade, but, essentially, the UK assumes that British people are domiciled in the UK, and you have to prove otherwise. It doesn't matter on a day-to-day basis, but it can be an issue on death, and where your estate is taxable. This wouldn't be an issue for you, as you're a UK tax resident anyway. But perhaps they might want to argue with me. Or my heirs, as I'd be dead. :-)

In addition, the UK uses this condition of being "ordinarily resident", which means you DO live in the UK, or you INTEND to live in the UK. I'm not sure how widely they use this test, but it's mostly used in relation to entitlement to National Health treatment. The National Health is free, so it's a big deal if they give expensive hospital treatment to those that are not entitled to it. You're ordinarily resident by virtue of being a UK tax resident, but it's not the only test. I could return to the UK next week, and obtain free treatment for a major operation on the basis of being ordinarily resident simply because it's my "intention" to return permanently to the UK! Most countries, instead, figure out your entitlement to their state healthcare by virtue of whether you are enrolled in their social security system, and have made the necessary contributions.

This is a bit obscure, as most Brits tend to assume that they are entitled to NHS treatment by virtue of their British passports. But, officially, even though I have a UK passport, and I made enough NI contributions to qualify for a full pension (in due course), I am not entitled to NHS treatment in the UK, nor to use my EHIC (still valid, date wise) in Bulgaria or elsewhere. It would be "national health fraud" or similar (except in the case above).

@gwynj

Thank you.

All that is SO interesting and helpful to me.

My current issue isn't so much Tax, but an Insurance item where it is being claimed - as an attempt to avoid settling my claim - that I am "living" elsewhere rather than UK.

That is absurd, and yes, living is a non legal and arbitrary term although the insurance company is citing that "Unoccupied" properties are ones "that haven't been lived in for 60 consecutive days".

I will be asking them to define "lived in" , also.

My believe is that they are being devious and clutching at straws by citing that I "live" abroad, even though I have ties, own my only residence in UK, pay tax and make annual returns etc etc .  And yes, both a Citizen and almost certainly Domiciled in UK (to be determined only after death if questioned(.

@slugsurmamates

Ahhh... but, in that case, it's not about your legal status... merely about slippery insurance companies wanting to weasel out of payment based on a technicality/small print. :-)

In this case, sadly, the insurance company has addressed the vague idea of "living in" place x, by quantifying it. If you leave your home without being there for 60 days or more, they define that as "unoccupied". And, yes, I would expect an insurance company (I am presuming this is some kind of home insurance) to treat its cover (or potential cover) differently for occupied properties vs. unoccupied properties. This would be a very typical exclusion for, say, water damage or burglary.

It's probably very annoying/frustrating for you, but you can see their rationale.

Unfortunately, if you didn't read the small print on the 60 days rule, you're gonna have a tough time on this one.

My guess is that any talk about legal residence, NHR status, domicile, etc. will fall on dear ears, as they will just point you back to the definition in their terms and conditions.

For the future, you will know to keep your absences less than 60 days... or get a different policy with a different definition of unoccupied. Or arrange with someone (house sitter, maybe?) who can keep your home "occupied" according to the insurance company's guidance.

In this case... I don't know how an insurance company would even know your home was unoccupied. Did they hire a detective to investigate? Or did they ask you some innocent questions in relation to your claim... and you inadvertently revealed your absence for more than 2 months? If, in effect, you confirmed you were away for more than 60 days (hence, by their definition, your home was unoccupied... hence they are not liable for your claims)... you are going to struggle to find a way to claim that you didn't say that... you meant you were only away for 1 month, not 2. :-)

If you can show you popped back for a weekend during those months (e.g. you were away for 45 days, back for 2, away for 30), then your home would be "occupied" all the time. But you'd need to prove that you flew or drove back for that weekend. Or, maybe, if you forgot that you brother-in-law and his wife came and spent a couple of weeks on vacation there during your absence, that would also avoid unoccupied status. But, again, you'd probably need some proof.