From April 2027, changes to Inheritance Tax in the UK will see unused pension pots become subject to duties of up to 40%, with Income Tax also applied to remaining funds.
The change means that families planning to pass wealth down to future generations now need to reassess their position and consider alternative options. One option that is increasingly coming to the fore, according to tax and wealth planning advisory Sovereign, is swapping the UK tax regime for the favourable taxation schemes of Portugal.
Portugal presents both taxation and lifestyle benefits for those happy to relocate to the sunshine. The country abolished Inheritance Tax in 2004, since when it has charged no tax in relation to inherited assets to direct heirs. A 10% flat rate stamp duty on the value of inherited assets that are located within Portugal applies to siblings, more distant relatives and unrelated individuals – still a significant saving compared to the UK’s approach.
Specialist international tax firm Forvis Mazars points out the value of thinking in the medium to long term about such plans, with residency rules, anti-avoidance provisions, double tax treaties, and the UK’s temporary non-residence regime all needing consideration. The firm emphasises the value of timing, particularly for UK residents with properties and/or businesses to sell as part of their relocation plans.
Both Sovereign and Forvis Mazars will be present at the upcoming Moving to Portugal Show and Seminars in London onOctober 16, 2025. Designed to provide those considering relocating to Portugal with first-hand expertise, the event includes specialist presentations on taxation (including the NHR 2.0 scheme), visas, wealth planning, banking, legal considerations, foreign exchange, property and more. Attendance is free, with registration online in advance at https://London-MTP-2025.eventbrite.co.uk
The Moving to Portugal Show will also take place in Edinburgh for the first time this year, on November 21, for Scottish residents keen to find out more about the taxation and wealth planning benefits of Portuguese residence. The free-to-attend show can be booked at https://MTP-Edinburgh.eventbrite.co.uk, with one-to-one meetings available with experts from Forvis Mazars and a range of other presenters and exhibitors.
Christina Hippisley, General Manager of the Portuguese Chamber of Commerce in the UK, said: “We are delighted to be hosting the Moving to Portugal Show and Seminars in both London and Edinburgh in the coming months. Attendees can access a huge amount of information designed to support a seamless move from the UK to Portugal, connecting with experts offering extensive experience of both countries’ financial systems.”
In addition to the potential financial gains resulting from moving to Portugal, individuals can also benefit from the country’s abundant sunshine, laidback lifestyle and emphasis on enjoying time outdoors.
portuguese-chamber.org.uk | movingtoportugal.org.uk
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