In the context of the global pandemic, lifestyle has increasingly come into the focus. For many, Portugal has a triple A+ lifestyle rating, as well as being the 7th most democratic country in the world for 2020 (in 200 countries) and 3 rd most secure country according to the Global Peace Index. As a result, people from all around the world feel safe to move to Portugal, in pursuit of a higher quality of life, with an added benefit of securing tax efficiency through the Non Habitual Residency Programme (NHR).
Qualifying as a NHR and maintaining this status for 10 years is relatively straight forward by way of registration as a Portuguese tax resident, not having been a tax resident in the previous 5 years. However, becoming a Portuguese NHR does not necessarily grant a complete tax exemption and therefore specific tax advice should be sought before applying.
The NHR programme is not country-specific, in the sense that it relies on the extensive network of Double Taxation Agreements which Portugal has signed with the UK and other countries. As a result, British Citizens will continue to benefit from the programme after the end of the transition period in the same way that other third country nationals currently benefit.
However, as negotiations evolve, the possibility of a no deal Brexit comes sharper into focus, and certain practical issues, such as the provision of banking services by UK licensed banks start to become a reality. According to The Sunday Times, Lloyds, Barclays and Coutts have already informed their clients of the situation, saying their accounts will be closed at 11pm on December 31 st . Lloyds bank was the first to confirm that they will be withdrawing their service from Holland, Slovakia, Germany, Ireland, Italy and Portugal, affecting more than 13,000 British Citizens living in these countries. For the time being, two other major UK banks, NatWest and Santander, have not yet decided to close customers’ accounts, but are however considering their options.
Nonetheless and facing Brexit, a growing number of British Nationals are choosing to become NHR as Portugal becomes more than ever a country with growing opportunities for successful investments. Existing NHRs are securing new banking solutions.
For instance, two Portuguese cities are ranked by Forbes Magazine, for the second consecutive year, Best European cities to invest in for 2019 and 2020, with areas of growth potential and gains, especially in the Real Estate sector. Last year’s list had Lisbon as a great city to invest in a second home, however this year’s best city is Porto, where prices are 30% lower than Lisbon, with an average sales price in August 2020 of €306,060.
EDGE continues to provide substantially more legal assistance than simply making the NHR application on the client’s behalf. Our experienced team assists the client each step of the way, also providing Brexit solutions, including the establishment of residency rights prior to the end of the transition period. EDGE can provide full assistance to British nationals concerned about Brexit, whether in relation to British nationals living in Portugal, British nationals considering moving to Portugal pre-Brexit and British nationals moving after Brexit.
Source: Edge International Lawyers October 2020