Financial Advice for UK Expats in Portugal

Portugal at a glance for UK expats

Becoming tax resident in Portugal

You are Portuguese tax resident if you spend more than 183 days in Portugal in any 12-month period that starts or ends in the tax year, or if you have a home there that you intend to keep as your habitual residence. Residence generally starts from your first day in Portugal. The tax year is the calendar year, and returns are filed between 1 April and 30 June.

In 2026, resident income tax rates rise in nine bands from 12.5% to 48%, with an extra solidarity charge of 2.5% on income over €80,000 and 5% over €250,000.

The new UK–Portugal tax treaty

A new double taxation treaty between the UK and Portugal was signed in September 2025 and came into force on 29 December 2025. It applies in Portugal from 1 January 2026 and in the UK from 6 April 2026 for income tax and capital gains tax. It replaces the 1968 treaty, which still covers income from before those dates. Guidance written before 2026 may be out of date.

How your UK pensions are taxed

• Workplace pensions, personal pensions and SIPP drawdown paid to a Portuguese resident are taxable only in Portugal (Article 17 of the new treaty). Portugal taxes the amount you withdraw – not money left in the pension – at progressive rates, with a deduction of up to €4,587.09 for pension income. Once you are resident, you can apply to HMRC for a “no tax” (NT) code so your pension is paid without UK tax.
• The UK State Pension is taxed in Portugal in the same way, and it increases every year because Portugal is in the EEA.
• Government service pensions – civil service and armed forces, for example – are taxable only in the UK, unless you are a Portuguese national and not a UK national.
• Lump sums: Portugal has no equivalent of the UK’s 25% tax-free cash, and professional views differ on how a lump sum taken while resident is taxed. Get advice before you take one.

NHR and IFICI

The Non-Habitual Resident (NHR) regime, which taxed foreign pensions at 10%, closed to new applicants from 2024. People already registered keep it for the rest of their 10 years.

Its replacement, IFICI, is aimed at people working in qualifying roles – for example research, innovation and certain highly qualified jobs. It taxes income from the qualifying activity at a flat 20% and exempts most foreign income for 10 years. You must apply by 15 January of the year after you become resident. IFICI does not cover pensions, so most retirees moving to Portugal now pay normal rates on their UK pension income.

ISAs, savings and investments

You can keep a UK ISA after you leave and it stays free of UK tax, but you cannot pay new money in while non-UK resident. Portugal does not recognise ISAs, so the interest, dividends and gains inside one must be declared in Portugal.

• Dividends, interest and capital gains are generally taxed at a flat 28%. You can choose to add them to your other income and pay scale rates instead, which can help on lower incomes.
• Gains on listed shares and funds held for two years or more are partly excluded from tax, depending on how long you held them.
• Income from jurisdictions on Portugal’s blacklist is taxed at 35%.
• Under the new treaty, UK tax on dividends and interest paid to a Portuguese resident is capped at 10%.

Inheritance and gifts

Portugal has no inheritance tax as such. Instead, stamp duty of 10% applies to inheritances and gifts of Portuguese assets – but spouses, partners, children and parents are exempt, although the transfer still has to be reported. Portugal has no wealth tax.

UK inheritance tax after you leave

Since 6 April 2025, UK inheritance tax depends on long-term residence rather than domicile. If you were UK resident for at least 10 of the previous 20 tax years, your worldwide assets stay within UK inheritance tax for a number of years after you leave:

From 6 April 2027, most unused pension funds and pension death benefits will also count towards your estate for UK inheritance tax. This is now law under the Finance Act 2026. If you hold large UK pensions, it is worth reviewing your plans and nominations now.

Free tools: estimate the bill with our UK inheritance tax calculator, use our UK inheritance tax exit checker to see when your worldwide assets would fall outside UK inheritance tax, or compare Portugal with other countries.

Visas for British citizens

• D7 (passive income) visa: income of at least €920 a month for the main applicant in 2026, plus 50% for a spouse and 30% for each child, with savings to back it up.
• D8 (digital nomad) visa: income of at least four times the minimum wage, which is €3,680 a month in 2026.
• Golden visa: the property and simple capital-transfer routes have closed; investment fund and other routes remain.

Check the current requirements with the Portuguese consulate before you apply, as thresholds change each year.

A checklist for moving to Portugal

• Get your NIF (tax number) – you need it for almost everything.
• Tell HMRC you are leaving with form P85 or the SA109 pages of your tax return.
• Update your address with the Portuguese tax office to become tax resident, then get a certificate of tax residence so you can apply for an NT code on your UK pension.
• If you receive the State Pension, apply for an S1 and register it with Segurança Social and your local health centre.
• Review your pensions, ISAs and investments before you become resident.

Our guide to moving to Portugal from the UK covers the move in more detail.

How we help UK expats in Portugal

• UK pension advice – drawing an income efficiently under the new treaty and Portuguese tax rates.
• Investment advice – portfolios that take account of Portugal’s 28% rate and reporting rules.
• Estate planning – UK inheritance tax and Portuguese succession.

Sources

• UK–Portugal tax treaties (gov.uk)
• PwC Worldwide Tax Summaries: Portugal
• PwC: Portugal tax credits and incentives (NHR and IFICI)
• Living in Portugal (gov.uk)
• Healthcare in Portugal (gov.uk)
• ISAs if you move abroad (gov.uk)
• Inheritance tax if you are a long-term UK resident (gov.uk)

Reviewed by Henry Temple-Baxter, CISI Level 4 qualified · Last updated 10 October 2026. This page is general information, not personal advice.