Selling up and moving to Portugal? What do you need to know? You will likely have assets in the UK, such as your home, cars or bank accounts. And if you’re an expat looking to sell your UK property and move overseas, you may still have investments in Britain too.
It’s important to understand your tax obligations before moving to Portugal and how this will affect your financial situation when living outside of the UK.
Different countries have different rules when it comes to financial accounts, property ownership and investments; so make sure you’re fully prepared with the right information before making your move.
From tax to currency conversions, we’ve got all the information on what you need to know before moving to Portugal.
Moving your home
You are able to take up a maximum of £1,000 worth of goods as part of your personal belongings without paying import duties.
If your assets are worth more than that, you will have to pay a customs duty at 10% on anything over that amount. You’ll also have to prove that you owned these items for at least a year before moving to Portugal.
It’s also possible to include other assets such as bank accounts in your plans – however, it is essential that their use does not interfere with UK law! The first thing is to make sure everything is in order when it comes tax returns etc.
There are some risks if assets are brought into another country without taking these steps, so it’s worth doing your research before deciding whether or not to transfer property.
Moving abroad can involve a lot of paperwork. We would always advise you to consult an expert team, such as RHJ Law, who have experience in dealing with expats and relevant tax laws for both countries.
This will help ensure that everything is dealt with appropriately, legally and efficiently.
Moving your pension
Many expats choose to take their pensions with them. It can be tricky, however, as most pension schemes aren’t built for moving around.
The rules for transferring UK pensions can vary depending on what country you’re going to and whether your pension is worth more than £30,000 (you will also pay an exit charge of 25% if it’s over £25,000).
As a general rule, all UK-based pension savers should seek advice before moving abroad. If you’re selling up in order to move abroad then make sure that any property funds or investments are also transferred. Otherwise they could be frozen – leaving your funds stuck until you return back home or officially transfer them into another fund.
There are a few options when it comes to shifting your pension to Portugal. You could move it into an overseas scheme, or swap it for a local pension plan. Another option is to take a cash equivalent.
In addition, some schemes allow partial transfers – which means that you can take some of your money but leave some behind in case you move back home in future.
Before choosing one option over another, however, you should consider things like tax implications, how long you think you’ll be living abroad for and what fees will be charged for each option.
Cash, bank accounts and credit cards
If you’re moving to Portugal, there are a few things you should do immediately before travelling. While it’s unlikely that you’ll need cash once your arrive in your new country of residence, if a store won’t accept your card – or if there aren’t any ATMs nearby – having some cash on hand can be handy.
There are certain steps expats should take when moving abroad in order to ensure that they have access to their funds, even if they live outside of a banking hub.
You should also ensure that your credit cards work in your new country, so it’s a good idea to make sure you have up-to-date details with your card providers. If a bank doesn’t offer an online services, it may be necessary to check on any overseas accounts or credit cards via post.
This is especially important if you plan on opening a bank account while abroad. The same applies if you intend on taking out travel insurance while abroad – but remember that expat health insurance can be purchased in some cases. This is particularly useful for pre-existing conditions which would otherwise not be covered by standard travel cover.
Your business operations
You’ll usually be liable for UK tax on all income earned abroad. However, if your earnings are generated in a foreign country with which Britain has a double taxation agreement, then profits may only be taxed in one country.
Some agreements allow for overseas earnings to be completely free from tax. You may also qualify for reliefs, allowances or exemptions when moving abroad; it’s important that you check what you’re entitled to when selling property in England.
Remember that it’s not just business assets you might want to keep hold of; employees could be an asset worth protecting too.
Even if you don’t keep any assets in England, it’s important that you do not hide your financial affairs from HMRC. Many Brits abroad will hire an accountant who specialises in cross-border tax matters.
RHJ Law, together with RHJ Accountants are able to advise on:
- Starting a business, or branching out to Portugal
- Cross-border tax
- Residency and visa’s
- Real estate
- & so much more!
How much should I plan for?
The Overseas Investment Regulations may require expatriates who are UK citizens or permanent residents to report foreign financial interests in excess of £50,000. This information may be used by HMRC as part of its work identifying tax evasion.
In addition, there are double taxation treaties between many countries that facilitate a relief from paying taxes twice on investment income.
When selling assets such as real estate or investments, it is important for non-resident individuals living abroad to have an understanding of their tax position in both Portugal and their former home (the residence country).
The rules can be complex so expert advice should be sought by anyone moving abroad wishing to retain investments within England.
Finding a Law Specialist
If you need legal advice or assistance, be sure to contact the experts at RHJ Law. We’re able to guide you through what you need to know before moving to Portugal.
Our legal team at RHJ Law assists non-EEA nationals to obtain residency in Portugal. Our English speaking team of lawyers, accountants and more specialise in helping entrepreneurs and families to set up, manage and grow their life in Europe.
Working with our trusted partners; we can advise you on where to settle and how to go about purchasing property in Portugal.
We look forward to hearing from you soon!
