The Portuguese Government has changed the country´s tax law and with effect from 1st January of this year, the Portuguese tax authorities recognise Trusts in all tax jurisdictions. The consequence of this is that anyone who has a Trust will suffer tax liabilities in Portugal for the very first time.
The tax rate applicable is set at 28%. This will affect many individuals and families, including individuals that have successfully gained the Non-Habitual Residency scheme.
We are aware that many Trusts have been set up by Financial Advisory firms in Portugal, and in the main, the reason for the Trust establishment was in order to facilitate the investment portfolio transaction, as many investment companies would not accept investment business from expatriates living in Portugal for legal reasons. This concept of business adopted by these Financial Advisory firms have placed many in a serious tax liability position due to these recent tax developments.
The tax liabilities that will now arise as a result of this legislation change will be onerous to many, and in addition, we are aware that many of these Financial Advisory firms are advising the public to take appropriate action to offset this new tax. We have learned that individuals are being recommended to dissolve their Trust in favour of an offshore company, which incurs further cost burdens and lowers the tax liability, but does not eradicate the tax issue.
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Being the only UK and Portuguese regulated firm advising Expatriates in Portugal, Private Fund Management have a number of solutions that can resolve this issue. If you would like to discuss this issue and explore the options available to you, please do not hesitate to contact us.
The Private Fund Management
Avenida Jose dos Santos Farias, Loja 1, 8135-167, Almancil
T: +351 289 392 484
E: info@privatefund.management
W: www.privatefund.management
