Over recent months, the Forvis Mazars International Tax desk in the Algarve has seen a steady increase in enquiries from UK-connected individuals considering a move to Portugal. With UK advisers based in Quinta do Lago from January and remaining on the ground through to July, a clear pattern of questions and concerns has emerged. While motivations for relocating vary, the themes are consistent: tax residence, timing and ongoing compliance are central to ensuring a move is successfully structured, rather than creating unintended issues later on.
Who Is Moving?
The individuals seeking advice tend to fall into the following groups:
- Business owners preparing for a sale were frequently exploring relocation options, with a particular focus on managing capital gains exposure and ensuring non-UK residency was established at the right point.
- Remote executives were another common profile; many continue to work for UK or international employers while living in Portugal, raising questions around tax residence, workdays and ongoing UK obligations.
- Retirees seeking efficiency around pensions and inheritance planning.
Across all groups, Portugal’s IFICI regime has been a significant driver. While different from the original NHR regime, its favourable treatment for certain types of non-Portuguese income and gains has renewed interest among internationally mobile individuals.
Becoming Non-UK Resident: The Statutory Residence Test
A key theme was the importance of becoming a non-UK resident. The UK’s Statutory Residence Test (SRT) goes beyond simply counting days. Ties to the UK, such as work, accommodation and family, can unexpectedly keep someone UK resident if not managed carefully.
Timing also plays a critical role. Decisions around exit dates, travel patterns and work arrangements can determine whether non-residence is achieved in the intended tax year, which in turn impacts income and capital gains exposure in both the UK and Portugal.
This is particularly important for business owners. Where non-UK residence is successfully established before a sale, there may be no UK capital gains tax. In addition, under Portugal’s IFICI framework, such gains may also fall outside Portuguese tax, provided specific conditions are met.
Inheritance Tax
Inheritance tax (IHT) planning was another frequent concern. From April 2025, UK IHT moved to a residence-based system. As a result, individuals can remove exposure to IHT by becoming long-term non-UK residents, rather than needing to sever all ties under the former domicile-based rules. However, UK situs assets, such as UK property, remain within scope, meaning asset location and ownership still require careful review.
The consistent message from these discussions is the value of early, joined-up planning. Tax residence, estate planning and ongoing compliance are closely linked, and decisions in one area can have significant consequences elsewhere. With a growing international tax presence in Portugal, Forvis Mazars is well placed to support individuals and families considering a move, helping them navigate both UK and Portuguese considerations with clarity and confidence.
Keith Graham
Associate Director, Forvis Mazars
Disclaimer:
The views expressed on this page are those of the author and not of The Portugal News.