What to Do When Your NHR Status Ends in Portugal
- Luso Financial Planning
- Jul 26
- 2 min read
Featuring Luso Financial Planning – www.lusofinancial.com
For many expatriates, Portugal’s Non-Habitual Resident (NHR) regime has made living here especially attractive: lower taxes on certain income, exemptions on some foreign earnings, and a chance to enjoy a Mediterranean lifestyle with financial peace of mind.
But what happens when your 10-year NHR status comes to an end?
At Luso Financial Planning, we help clients prepare for life after NHR—so you can keep more of what you’ve built and continue to live comfortably in Portugal. Here’s what you should know, and the key steps to consider.
🧭 What Changes When NHR Ends?
After the 10-year period:
Your income may become fully subject to Portuguese progressive tax rates, which can reach up to 48%.
Pensions that were taxed at a flat 10% under NHR may also be taxed at higher rates.
Dividends, interest, and capital gains may now be taxed at a flat 28%, or higher if you choose to aggregate with other income.
You lose automatic exemptions on certain foreign income.
In short: without planning, your tax bill could increase significantly.
✅ What Should You Do Next?
1. Review Your Income and Asset Structure
Assess where your income comes from—pensions, investments, rental income, etc.—and how it will be taxed going forward.Identify assets that may trigger higher taxes and explore ways to restructure them.
2. Consider Tax-Efficient Investment Vehicles
One of the most effective strategies after NHR is to use EU-regulated insurance wrappers (also known as investment-linked life assurance policies):
These allow investments to grow tax-deferred.
Withdrawals are only partially taxable: after eight years, only 40% of the gain element is taxable, cutting your effective tax rate on gains.
They help simplify reporting and estate planning.
Ireland- or Luxembourg-domiciled wrappers are especially popular among expatriates because of robust EU regulation and flexibility.
3. Plan for Pension Income
For those with UK pensions or other foreign pensions:
Review if transferring to a QROPS (Qualifying Recognised Overseas Pension Scheme) is beneficial.
Consider drawing income strategically to manage your annual tax liability.
4. Think About Estate Planning
Without NHR, your assets may be more exposed to local tax rules. Portugal’s forced heirship laws also dictate how your assets pass to family members.
Using tools like insurance wrappers can help you name beneficiaries directly and bypass probate.
Review your wills and estate plans to align with Portuguese law.
5. Seek Professional Advice
Every situation is different: your nationality, family situation, and mix of assets all matter. Working with a financial planner who understands Portugal’s tax system—and cross-border considerations—is essential.
🤝 How Luso Financial Planning Can Help
We specialise in helping expatriates and returning Portuguese residents prepare for life after NHR.
We design personalised strategies using tax-efficient structures, sustainable income plans, and robust estate planning.
We keep up to date with changes in Portuguese tax laws—so you don’t have to.
Our goal is simple: to help you keep more of your wealth and enjoy the lifestyle you came to Portugal for.
Ready to plan for life after NHR? Visit www.lusofinancial.com to arrange a consultation and explore how to protect and grow your wealth in Portugal.
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