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I am currently living in Spain with permanent residency and considering moving to Portugal wef 1st January 2024 on a D7 visa.
I understand the requirements of the D7 and also the preferential 10% tax rate on UK state pension and Sipp drawdown plus the taxation in the UK of my military pension.
However, I cannot find the answer to a few questions.
1/ Are assets held in the UK for over 365 days i.e shares, unit trusts, investment trusts subject to Portuguese CGT if disposed of whilst living in Portugal on a temporary residency via a D7.
2/ are gains made via Sipp investment assets in UK shares subject to Portuguese CGT
3/ are all the aforementioned pension abd share investments subject to Portuguese wealth tax if held in the UK i.e investments in share accounts and Sipp drawdown
Thanks in anticipation
Hi Richard and welcome to the forums. I will let some more experienced UK members address your specific UK situation. We are from the US and had to research similar situations for our tax advice. Do check out some of the professionals here https://expatsportugal.com/business-directory-category/taxation-fiscal-consulting-portugal/ We are using AFM after consulting with them last year and felt it prudent to use a Portugal specific tax accountant for our first-year return and advice going forward.
Hi Rickyroo and welcome to the forum from me.
Couple of things that spring to my mind in the absence of any expert opinion so far.
Maybe just loose phrasing but I assume you know that in addition to whatever formalities you need to comply with in respect of residence, if the special tax provisions are of benefit you'll need to make a separate application for that to the tax office - it's not automatic.
On No 3 : there is no wealth tax in Portugal.
Your No 1 I can't answer with any degree of certainty because I'm not sure what your understanding of temporary residency via D7 is. You get a D7, which allows you to enter the country for a period of 4 months, during which you must seek authorisation to reside. That authorisation is initially granted for a period of 2 years. I'm not entirely sure, assuming the application is granted, from what date you'd be considered tax resident.
However, on the asumption that you are tax resident and you dispose of financial assets resulting in a capital gain (as per your No 1), CGT would be due in Portugal (as per Article 13 of the Double Taxation Treaty). This would not be exempt under NHR.
Your No 2 is beyond me, I'm afraid. I don't know how a SIPP operates or where that fits in with regard to the PT tax system.
For us non EU folk we don’t have the right to reside here regardless of intention until granted residence.
The AT can class anyone as a tax resident of Portugal without that person having any right to physical residence. At least that's my take on Article 16 of the Código do Imposto sobre o Rendimento das Pessoas Singulares.