Portugal may offer opportunity to leave temporarily

Commenting on the changes announced to UK Non-dom status in the Summer Budget, which mean that Non-doms resident in the UK for more than 15 out of the last 20 years will pay UK tax on worldwide income and gains, Simon Baylis, Partner at Moore Stephens, the Top Ten accountancy firm, says:

These changes make the UK significantly less attractive to overseas high net worth individuals who contribute substantially to the UK’s tax base.

“The new ‘15 out of 20 years’ rule is likely to push a considerable number of high net worth individuals out of the UK. Most will not see moving to a more favourable jurisdiction as a major problem – they are already highly internationally mobile.

“For many of them, this will simply mean paying more attention to the number of days they spend in the UK, to ensure they remain non-resident for the year.

GBP Lattice (PD)“Alongside the traditional choices such as Switzerland, some Non-doms may target other jurisdictions such as Spain and Portugal as potential destinations if they leave.

“There are many factors, such as local wealth tax, to consider but in Portugal for example, ex-pats can reside in the country for up to ten years, and pay a flat 20% expat income tax on Portuguese income only. This may allow them to get back below the ‘15 out of 20 years’ barrier and then return to the UK.”

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