Portugal Resident and UK resident - Double taxation

Good Morning I am currently working in Portugal and have been registered as a resident and also pay tax here as well as social security: As the Portuguese end of tax year is closing in i am unsure of my position versus the UK 2023/2024 year as they are split and my situation is as below: 1.My estimation is i will have only spent 104 days in the UK for the 2023/2024 tax year 2. I will have spent over 183 days in Portugal 3. I am registered as a specialist worker and have a D3 Visa as an engineer (which i believe may fall under article 14?) and has a 10 year period of being able to be on a 20% tax liability in Portugal 4. My employment is with a Portuguese company 5. I have a home in Portugal 6. I have a home and wife in the UK 7. I have a Portuguese bank account and 100% of wages is paid here in Portugal 8.I have not worked 1 hour in the UK this year and none of my work is carried out in the UK under this contract 9. I will have some dividends paid in the UK from a UK LTD Company but these will be within my personal allowance limit - i am a director but employment ceased with this company in the 2022/2023 tax year as i knew i was moving to Portugal 10. I am paying tax (with holding tax to the Portuguese authorities through their tax portal monthly) How will i be taxed? - Only in Portugal on my Portuguese earnings and only in the UK for my Dividends? Thanks in advance for any guidance you can give. PL

Hi

You would need to review the guidance and take the statutory residence tests, to determine your UK tax residence status.
Only then would you be able to confirm whether you are still tax resident in the UK.  RDR3 Statutory Residence Test

Thank you

I did the on line test and it stated I would still be a resident in the uk for 2023/2024. Can you advise of my required steps as I have already paid tax on a monthly basis from April 2023 in Portugal and the UK deadline for this part year will be a while after. Do I advise Portugal of my earning in the UK for Jan to April 2023. Will Portugal tax me on my Dividends I drew from my UK limited company in 2023. Will I only be taxed in one country? I have proof of residence in Portugal and certificates of tax registration etc. Thanks PL

Hi,

You can find guidance here:

Tax on foreign income

Thank you.

Good evening With regards to my position, my circumstances changed and will only be spending 87/88 days in the UK which makes me a non uk tax resident and the on li e check confirmed this. I may still take money via dividends from my UK company but will have had no income what so ever in this tax year and my work is 100% in the EU. From what I read the dividends I draw would not be taxed due to my status, is my understanding correct. Thanks in advance

Hi paul Lythe,
That is correct as this would be disregarded income.
Thank you. 

 

Good morning I am a UK resident working for a UK company as a PAYE employee. My family is based in Portugal, where I spend a large part of the year. I don't pay tax on NIC in Portugal because I don't earn income in that country, but I will be selling property there this year. I was wondering if there's a way to be registered as dual resident in both countries, still keep my PAYE employment, and avoid paying double capital gains tax when I sell the Portuguese property later this year? Thank you very much in advance

Not HMRC..on basis you are UK tax resident and not tax resident in Portugal you are liable to UK tax on worldwide income/gains. The Double Taxation Agreement says Portugal can tax the gain, but that it is not only taxable there, therefore it remains liable in the UK also. As you would also be liable in the UK then you would complete a Self Assessment form in the UK, work out the gain on UK rules, and claim the tax paid in Portugal as a Foreign Tax Credit (CGT) against the UK liability so that you get relief in the UK for the tax paid in Portugal. That is the only way it can be dealt with...i.e. dual residence registration is not appropriate for this.

should have said...if tax due in the UK calculation is less than paid in Portugal then nothing to pay in the UK, but you cant reclaim any excess. If UK calculation shows more tax due then you pay the difference between that paid in Portugal to HMRC

Hi vivyane,
You still need to report the sale of the property in the UK but you can claim foreign tax credit relief for the Portuguese tax paid to reduce any UK CGT due.
Thank you.