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bigduckontax
bigduckontax, Accountant
Category: Tax
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I want to live six months in Portugal and six months in the

Resolved Question:

I want to live six months in Portugal and six months in the UK, after living the past nine years in Hong Kong. I want to continue working for a few years before I retire and would like to know how I can minimise my Tax in the years I continue working. I own properties in both the UK and Portugal. I am also receiving a DB pension in the UK (and paying tax on it!)
Assistant: The Accountant will know how to help. Is there anything else important you think the Accountant should know?
Customer: I hold an Irish Passport although I only lived the first year of my life in Ireland. My wife and two adult children are British
Submitted: 20 days ago.
Category: Tax
Expert:  bigduckontax replied 20 days ago.

Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

Please expand on the DB pension. Who pays it and in what country?

Customer: replied 20 days ago.
Hi Keith,
My DB pension if from a previous employer that is also registered in the UK. I have received monthly payments for the past 3 years and the UK Tax is deducted at source. My wife and I have some other small SIPPs and ISA's in the UK and I have a work related pension in Hong Kong. Thanks David
Expert:  bigduckontax replied 20 days ago.

From the tenor of your question you will almost certainly be tax resident in the UK and have to render self assessment tax returns annually. As a citizen of an EEA country you are entitled to a Personal Allowance (PA) of 11.5K to offset this. Property rentals are invariably taxed in country of origin and in any event you may find yourself liable to tax in Portugal also and have to rely on the Double Taxation Convention between the UK and Portugal to protcect you. This precludes the same income stream being taxed in both jurisdictions. This is done by means of tax credits, the tax paid in one country being allowed as a credit against liabilities in the other. The Convention, however, does not protect you from differences in rates of taxation.

The only effective method of tax reduction available to you is to make contributions to a private pension plan. You already have a SIPP so that should be easy. There is now a maximum contribution level of 40K pa including your employer's element, if any.

I do hope that you have found my reply of some assistance.

Customer: replied 20 days ago.
Do you have any experience or knowledge of Portugal's Non Habitual Residence program?
Expert:  bigduckontax replied 20 days ago.

I have just looked it up, PwC are very keen on it! Remember this is essentially an UK tax advice site.

With a tax rate on 20% under the scheme Portugal equates to the UK unless you are in higher rates tax.

bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 20 days ago.

Thank you for your support.

Whichever way this tax cat jumps you will have to self assess in the UK.