Tax comparison
🇬🇧 United Kingdom vs 🇵🇹 Portugal
Portugal has attracted thousands of UK expatriates through its Non-Habitual Resident (NHR) regime, offering preferential tax treatment on foreign income. While the original NHR programme closed to new applicants in 2024, the replacement IFICI regime continues to offer significant advantages, particularly for those leaving the UK's increasingly burdensome tax environment.
Tax rates
Tax rate comparison
Side-by-side comparison of personal and corporate tax rates for high net worth individuals.
| Category | 🇬🇧 United Kingdom | 🇵🇹 Portugal | Notes |
|---|---|---|---|
| Personal Income Tax | Up to 45 per cent | Up to 48 per cent (standard) / 20 per cent flat (IFICI regime) | Portugal's IFICI regime offers 20 per cent flat rate on qualifying Portuguese-source income for 10 years. |
| Capital Gains Tax | 18 per cent (basic rate) / 24 per cent (higher rate) | 28 per cent (standard) / potentially exempt under IFICI | Rates unified across all asset classes in Autumn Budget 2024, effective 30 October 2024. Foreign-source capital gains may be exempt under IFICI regime. |
| Corporate Tax | 25 per cent | 21 per cent (+ municipal surcharge up to 1.5 per cent) | Portugal offers reduced rates for SMEs and startups in certain regions. |
| Inheritance / Estate Tax | 40 per cent | 0 per cent (for direct family) / 10 per cent stamp duty (others) | Portugal does not levy inheritance tax on spouses, children, or parents. |
| Dividend Tax | Up to 39.35 per cent | 28 per cent (standard) / potentially exempt under IFICI | Foreign dividends may be exempt under the IFICI regime. |
| VAT | 20 per cent | 23 per cent | Portugal has one of Europe's higher VAT rates. |
| Wealth Tax | None | AIMI: 0.4-1.5 per cent on property above €600K | Portugal levies an additional municipal property tax (AIMI) on high-value real estate. |
| Social Security | 15 per cent (employer from April 2025), 8 per cent (employee) | 11 per cent (employee) + 23.75 per cent (employer) | Employer NI increased from 13.8 per cent to 15 per cent in Autumn Budget 2024. Threshold lowered from GBP 9,100 to GBP 5,000. Self-employed in Portugal may qualify for reduced rates. |
Residency
Residency & visa requirements
| Requirement | 🇬🇧 United Kingdom | 🇵🇹 Portugal |
|---|---|---|
| Tax Residency Threshold | 183 days or ties test | 183 days or habitual abode |
| Investor Residence (ARI) | Innovator Founder visa | Specified routes: 10 jobs; €500K research; €250K cultural support; €500K qualifying non-property funds; or €500K company capitalisation with jobs |
| Path to Citizenship | 5-6 years | For new applications under the rules effective 19 May 2026: generally 10 years of legal residence for UK nationals; 7 years for EU or Portuguese-speaking-country nationals. Earlier pending applications retain the previous rules; other conditions apply. |
| Residence and Travel Rights | UK residence does not confer EU free-movement rights | Portuguese residence and short stays in other Schengen states, generally up to 90 days in 180 subject to entry conditions. An ARI permit does not itself grant EU-wide residence or work rights. |
| CRS / FATCA Reporting | Full participant | Full participant |
Growth Capital Research
“Portuguese residence, Schengen travel and Portuguese citizenship are distinct outcomes. Compare the residence route and tax treatment on their own merits; do not assume an ARI permit grants EU-wide work rights or guarantees naturalisation.”
Frequently asked questions
United Kingdom vs Portugal FAQ
Is Portugal's NHR tax regime still available?
The original NHR regime closed to new applications in December 2024. It has been replaced by the IFICI (Tax Incentive for Scientific Research and Innovation) regime, which offers a 20 per cent flat rate on qualifying Portuguese-source income and potential exemptions on foreign-source income for 10 years.
Can I get EU citizenship through Portugal?
Naturalisation is a separate application, not an automatic benefit of an ARI permit. The rules effective 19 May 2026 generally require 10 years of legal residence for UK and other non-EU, non-Portuguese-speaking-country nationals, or 7 years for nationals of EU or Portuguese-speaking countries. Other eligibility conditions apply. Applications already pending when the change took effect remain under the previous law. Confirm the applicable route and transitional treatment with qualified Portuguese counsel.
How does Portugal compare to the UAE for UK expatriates?
The UAE does not levy personal income tax. Portugal offers residence in an EU country and Schengen short-stay travel, but Portuguese tax treatment depends on income and eligibility, while citizenship requires a separate qualifying application. Residence, tax status and citizenship should be assessed separately.
What is Portugal's Golden Visa status?
Portugal's Golden Visa, formally the ARI, is a separate immigration route. AIMA's current guidance lists specified non-property routes, including at least 10 jobs, €500K in qualifying research, €250K in cultural support, €500K in qualifying non-property investment funds, or €500K company capitalisation with jobs. It does not list a general €1.5M capital-transfer route. Confirm current eligibility, documents and timing with AIMA or qualified immigration counsel.
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- HMRC, Income Tax rates and Personal Allowances, 2025/26
- HM Treasury, Autumn Budget 2024
- Autoridade Tributária e Aduaneira, IFICI Regime 2024
- AIMA, ARI (Art. 90.º-A): https://aima.gov.pt/pt/viver/autorizacao-de-residencia-para-investimento-art-90-o-a
- IRN, Lei da Nacionalidade: rules effective 19 May 2026 (Lei Orgânica n.º 1/2026): https://justica.gov.pt/Noticias/Lei-da-Nacionalidade-novas-regras-entram-em-vigor-a-19-de-maio
- European Commission, Moving between EU countries: https://home-affairs.ec.europa.eu/policies/migration-and-asylum/eu-immigration-portal/already-eu_en
- Henley Private Wealth Migration Report 2025
Disclaimer. This comparison is provided for informational purposes only and does not constitute tax, legal, or financial advice. Tax rates and regulations are subject to change. Individual circumstances vary significantly. Consult a qualified tax adviser before making any relocation or wealth structuring decisions.