Portugal NHR Regime - Double Tax Treaty

Dear HMRC, I`m thinking about applying for the NHR regime in Portugal. I`m a resident in the UK and an EU citizen. I would like to ask 2 questions. 1) Once I'm approved for the NHR regime, I`ve heard from Tax consultants and accountants that my dividend taxes would be liable in Portugal, however, due to the NHR regime, I may be exempt from paying it. I do online bespoke research services for my clients and sell bespoke projects and sending them via email. Could you confirm this information that the UK would not require me to pay dividend taxes if I`m settled with the NHR regime in Portugal? However continuing running my UK LTD business and paying corporate taxes in the UK. 2) Could you please send me some information about the split tax year? An example: I would be settling and moving to Portugal in August. My business tax year runs from September. What would that mean regarding my dividend tax payments? Many thanks in advance, Alps

Hi Alps92,
Please have a look at the dual residency helpsheet HS302:
Dual residents 2023 (HS302)
Corporation Tax for a limited company is not something we can help with in this forum, as we only cover personal tax.
Please have a look at RDR3 for information on split year treatment:
RDR3 Statutory Residence Test
You will need to apply the the statutory residence test to determine if split year treatment is applicable.
Thank you. 

 

Dear HMRC, many thanks for your help. I`ve been trying to find information and checked the links you sent me as well. I am mainly interested in 2 aspects of my personal tax now: 1) "The UK normally does not impose a withholding tax on dividends paid to a non-resident despite having the right to do so." Under what circumstances the UK would not impose this tax? I am a bit confused due to the "normally" word as well as due to the fact that the UK have rights to impose withholding tax but it does not do it. Could you please help me with this one? 2) I read the Statutory residence test. Nevertheless I heard from tax advisors that it does not matter in terms of dividend taxes in the year of moving abroad. Let`s say I`d be moving in August, then the 23/24 dividend tax must be paid to the UK. And in the following year, the first point might be applicable. Can you help me with these please? Many thanks again

Hi Alps92,

1. This applies as dividends were previously taxed at source and is refelcted in the DTA. This no longer applies as dividends are paid gross and tax is ony due shuld you receive more than the dividend allowance (currently £1000). the DTA has not been updated.  
2. If moving in August then you will not be in the UK for 183 days and therefore not UK tax resident. your dividends would therefore be disragrded income.

Thank you.

Dear HMRC, I went to Portugal in March and got the NHR regime but had to come back to UK to finish the contract with my current client (28th June 2024). I have a limited company. I move to Portugal on the 29th June 2024 to stay there at least 3 years (then I could come back to UK), so I'm going to be 84 days this financial year 24/25 in the UK and work around 58 days from here. Based on this I have the following questions: 1) Based on the previous details I went through the Statutory Residence Test (SRT) twice to check if UK will consider myself UK tax resident this financial year 24/25 and it seams that I will be, does that mean that I will have to pay taxes for any dividends that I pay from my UK limited company to myself this financial year? 2) Once in Portugal, dividends paid from my UK limited company into myself are exempt of taxes, but my accountant in the UK has told me that when I return to the UK in 3 years time I will have to pay taxes for those dividends, which I am not really sure that is correct, can you please clarify this for me? Kind regards, 

Hi asm2545w,
Please refer to guidance here:
Tax on your UK income if you live abroad
Thank you.