Is your portfolio still tax-efficient in Portugal?

Portugal offers the lifestyle many expats spend decades working towards. But it also introduces a tax reset that can undermine even well-structured international portfolios.

Portfolios built in London, Johannesburg or New York, were designed for very different tax systems. What once worked efficiently can become exposed, inefficient, or even tax-ineffective under Portugal’s tax system. Without appropriate planning, your overall tax position and exposure may differ from what you expect under Portuguese tax rules.

In 2026, enforcement is more connected and more transparent than ever. The Autoridade Tributária, Portugal’s tax authority, now operates with enhanced visibility through the Common Reporting Standard, meaning offshore structures, legacy investments and previously “out of sight” assets may be more readily identifiable by tax authorities than in the past.

For many UK and South African expats, Individual Savings Accounts (ISAs) and Tax-Free Savings Accounts (TFSAs) are commonly used savings and investments structures that may offer tax-efficient strategies. The same applies to US tax-favoured accounts such as Rothe IRA’s.

In their home countries, these structures may help reduce tax exposure on growth and income from tax.

What this means in Portugal

That tax treatment may not be recognised in the same way. Portugal does not recognise their tax-exempt status, meaning interest and dividends are typically taxed at a flat 28%.

Key review point
Have you considered whether your current tax and reporting arrangements remain aligned with your goals, or whether an alternative solution may be appropriate?

Many UK citizens hold NS&I Premium Bonds and may view them as a tax-free way to save.

How this is treated in Portugal
Those winnings are not treated as interest. They are typically classified as prize income or other income and may be taxed at progressive rates of up to 48%, plus additional surcharges depending on total income.

What to consider
If you hold a large amount, the effective return can be significantly reduced once Portuguese tax is applied, which could make this a less efficient option for residents of Portugal.

The US-Portugal Double Taxation Treaty does not grant Portuguese residents an exemption on US state-level bond interest (unless exempt under NHR rules for those who have this status).

Planning implication
You may wish to reassess whether the net return remains appropriate for your objectives after application of the relevant Portuguese tax treatment.

It was once common practice to hold wealth in offshore centres such as Jersey, Guernsey, the Isle of Man or Mauritius for efficiency and flexibility.

Where the risk arises in Portugal
Portugal maintains a list of “blacklisted” jurisdictions. Income and gains connected to these locations can be taxed at 35% rather than the standard 28%.

This can result in a higher tax charge compared with the treatment of similar structures in other jurisdictions.

Key considerations
If your offshore platform is domiciled in a blacklisted jurisdiction, you may be paying an additional 7% in tax each year. Some individuals review alternative jurisdictions or structures after becoming Portuguese tax resident.

5. Trusts: Implications in Portugal

Trusts are common structures used by residents in a number of countries, including the UK, USA and South Africa. These are all common law countries where trust law is well-developed.

Portugal, by contrast, operates under a civil law system in which trusts do not have the same legal framework, although they may still be relevant for tax classification and reporting purposes.

Where the risk arises in Portugal

Fiduciary structures may face different tax outcomes depending on how the arrangement is classified. In some circumstances, benefits or distributions may be taxable at at 28% on all benefits received, and, if it is domiciled in a blacklisted jurisdiction, this tax can rise to 35%. Foreign tax credit availability may also be limited in certain cases.

Key considerations

Fiduciary structures connected to Portuguese tax residents may benefit from a review to understand their current tax treatment and whether any changes should be considered in light of the Portuguese tax legislation.

Investment suitability is not determined solely by returns, but also by how those returns are treated within an investor’s current tax environment. Where regulated investment advice is provided, advisers must take into account the client’s residency status and overall cross-border position to ensure that any recommendations are appropriate under applicable regulatory requirements.

In some cases, this may involve reviewing existing structures and considering whether they remain suitable within the investor’s current tax environment.

They can also assist in reviewing legacy assets and considering structures that may be appropriate under Portuguese tax rules, taking into account your personal circumstances and long-term objectives.

Sable International can review potential cross-border exposures and assist in exploring restructuring options where appropriate, taking into account long-term planning considerations.

For individuals seeking information on cross-border wealth planning, Sable International is hosting a series of advisory events across Portugal.

These sessions provide an opportunity to discuss a range of cross-border planning topics, including residency considerations, international structuring, and long-term wealth planning across multiple jurisdictions. This event is for informational purposes only.

.Event dates:

● 25 May 2026 – Porto | Sheraton Porto Hotel & Spa

● 26 May 2026 – Amoreira | Praia D’El Rey Marriott Golf & Beach Resort

● 27 May 2026 – Cascais | InterContinental Cascais-Estoril

● 28 May 2026 – Carvoeiro | Tivoli Carvoeiro Algarve Resort

● 29 May 2026 – Almancil | Wyndham Grand Algarve