British expats in Portugal risk paying tax in the wrong country, adviser warns
An adviser's column in Portugal Resident explains how UK and Portuguese residency rules and the double taxation treaty decide where expats owe tax.
British expatriates in Portugal could pay tax in the wrong country if they misjudge their tax residence, according to an article published by Portugal Resident. Christopher Moore, a partner at the financial advisory firm Blevins Franks, wrote the piece. It is guidance from an adviser, not a news report.
Moore writes that some British expatriates assume they are taxable only in the UK when they have in fact become Portuguese tax residents. Others believe they became Portuguese residents automatically when they still fall under UK rules. He writes that getting it wrong can mean unnecessary tax, unexpected reporting obligations or attention from the tax authorities.
According to the article, anyone present in Portugal for 183 days or more in any 12-month period is generally regarded as a Portuguese tax resident. People who spend fewer days there can also be treated as resident if they keep a home in Portugal in circumstances suggesting it is meant to be their habitual residence. The article says residency depends on circumstances, not on nationality or immigration status.
People with remaining UK ties also have to consider the UK's Statutory Residence Test. It looks at time spent in the UK, whether a person has a home there, where they work and their personal ties to the country. Where someone meets both countries' tests, the article says, tie-breaker provisions in the UK-Portugal double taxation treaty settle on a single country. These include the location of a permanent home, the centre of personal and economic interests, and where the person habitually lives.
This matters because Portuguese tax residents are taxed on their worldwide income and certain capital gains. The article puts Portuguese income tax scale rates at 12.5% to 48% in 2026, with an extra 2.5% or 5% for the highest earners. It puts the rate on investment income at 28%, or 35% for assets in a "tax haven" territory. It adds that because tax authorities now exchange information worldwide, "reporting errors or omissions are unlikely to go unnoticed."
“Tax residence is not a matter of personal choice.”Christopher Moore, Partner, Blevins Franks
The article also says that people already benefiting from Portugal's former Non-Habitual Residence regime can keep its provisions until their 10-year term ends.
The piece leaves several questions open. It does not say how many British expatriates may have their residence status wrong. It introduces a list of how UK assets would typically be taxed for a Portuguese resident, but that list does not appear in the published text. The article also warns that tax rates, scope and reliefs may change, and that its tax information is a summary and individuals should get personalised advice.
