With the government facing pressure to raise revenue and balance public spending, there are growing expectations of potential tax increases affecting higher earners, property owners, and business owners. This environment of unpredictability has once again prompted individuals and families to consider alternatives abroad – and Portugal remains one of the most appealing options.

Why Are UK Residents Looking Elsewhere?

The prospect of increasing tax rates in the UK, combined with the abolition of the non-domiciled regime, has accelerated interest in relocating from the UK. For individuals born in the UK, the shift to a residency-based inheritance tax (IHT) regime means it is now easier to remove non-UK situs assets from the scope of UK IHT. Meanwhile, those who were previously non-UK domiciled are reassessing how long they wish to remain UK resident, given the erosion of historic advantages.

For those who do choose to leave the UK, many will retain ties – whether through family, property, or business interests. This makes it critical to monitor time spent in the UK as becoming UK resident again can have significant tax implications and may trigger anti-avoidance provisions. Careful planning and ongoing review are essential to avoid unintended tax consequences.

Why Portugal? Stability and Opportunity

Against this backdrop, Portugal offers a combination of stability and predictability that contrasts sharply with the current mood in the UK. The recently introduced IFICI regime – which replaced the former Non-Habitual Resident (NHR) regime – provides a ten-year period of favourable tax treatment for new residents. Under IFICI, qualifying foreign-source income such as dividends, interest, and capital gains can benefit from significant exemptions, creating an attractive framework for business owners, entrepreneurs, and high-net-worth individuals seeking a long-term relocation option.

Credits: Supplied Image; Author: Client;

Beyond specific regimes, Portugal’s tax system features several structural advantages that continue to attract international families. There is no wealth tax, which distinguishes Portugal from several other European jurisdictions that have reintroduced or expanded such levies. In addition, there is no inheritance or gift tax between parents and children, a feature that provides comfort to those thinking about succession and estate planning across generations. Combined with a moderate cost of living, a favourable climate, and a strong infrastructure of international schools and healthcare, these factors position Portugal as a compelling choice for those seeking both lifestyle and fiscal balance.

For non-EU citizens, including British nationals post-Brexit, the immigration process is more structured but remains accessible. Several visa routes exist, such as the D7 visa for those with passive income, the D2 visa for entrepreneurs, or the recently introduced digital nomad visa for remote workers. Once residency is established, new arrivals can register under the Portuguese tax system and apply for available tax regimes, ensuring a smooth transition.

While the UK’s fiscal outlook remains uncertain, Portugal offers a stable, transparent, and welcoming environment for those looking to safeguard their wealth and quality of life. For many, it is not just a matter of escaping uncertainty, but of planning with confidence for the decade ahead.

Keith Graham, Associate Director (UK) at Forvis Mazars (keith.graham@mazars.co.uk)

Mário Patrício, Senior Manager (Portugal) at Forvis Mazars (mario.patricio@forvismazars.com)