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Tax Residency Rules / 183 Day Rule?
I intend on arriving in July 2022 which is just short of the 183 day tax residency rule. In terms of being regarded as tax resident, does this rule carry much weight? Or are other factors like having a 6/12 month lease and having proof of moving my home to Portugal more important?
I am currently a tax resident in the UK and I intend on applying for split year tax treatment. I am concerned that something as simple as not living in Portugal for at least 6 months in the Portuguese calendar tax year may mean I end up not allowed to split my tax year and in turn be tax resident in the UK and Portugal for the next year.
Has anyone had to deal with this?
Thank you very much,
You can be tax resident from day 1.
The 183 day rule is used to confirm where someone is tax resident when there are doubts (or where they are trying to avoid paying tax).
It may take time to be able to become tax resident in Portugal though.
The local Financas only allow you to change your tax residency when you can prove Portuguese residency! I know UK people who applied in December 2020 and still waiting!!!
As well as the PT tax rules, make sure you understand the UK rules so that you avoid being taxed in both countries. Just being out of the UK for 183 days does not mean you are not still considered a tax resident in the UK. Though there are double taxation rules, that only limits the amount that you pay no more than the maximum for both countires. It still means that one of the countries could also make you pay additional tax.
If you have not done so already I would strongly recommend that you get tax advice from both a UK and a PT accountant as you could end up wih a surprise!
Thank you @ITexpert7 and @JonesDN2020 - I am Irish so using freedom of movement I am good to live in Portugal for up to three months. In those three months I need to get a lease, with that I should be able to change residency pretty easily... but like you all say... things can get complicated.
Based on the feedback it seems "here be dragons" is the message. Once I have done my bit I will share my experience. Hopefully useful for the next person.