Is your financial planning on track meet your long-term needs in Portugal and to protect your legacy for your family and heirs?
While you can, of course, review your financial planning at any time to ensure it is on the right path, the New Year is the perfect prompt to do so if you have not taken a fresh look for a while.
A key reason to review your wealth management is to check it is all up to date. Establish how any tax and regulatory reforms in Portugal and the UK could affect you, and how to protect yourself from negative change or take full advantage of positive ones. At the same time consider whether any changes in your own personal circumstances mean you should adjust your arrangements.
However, to ensure everything is suitable for your life in Portugal, for your needs, goal and long-term financial security, your review needs to go beyond this.
Strategic financial planning lets you see the bigger picture
Many people only consider segments of their finances at a time. For example, they may have bought shares in companies they like or invested in funds recommended by an adviser years ago. They may speak to a tax accountant about Portuguese taxation and tax planning opportunities. Then they speak to a lawyer about setting up a Portuguese will. At some point they look at their pension funds and try and work out how best to access their retirement savings.
For a truly effective review, and to ensure it is suitable for your life in Portugal, consider how your tax planning, investments, pensions and estate planning work together. Here are some key considerations.
Residency and taxation
You should first make sure you know where you are resident for tax purposes, especially if you are new to Portugal or spend time in two countries. You then want to structure your investments and wealth in the most suitable way to minimise taxation – in Portugal, the UK and wherever you have financial interests – in way that still meets all your obligations.
Regardless of how effective your tax planning in the UK was, you pretty much need to start afresh in Portugal. What was tax-efficient in the UK is unlikely to be tax-efficient here. Explore the compliant opportunities available in Portugal to establish the most effective solutions for your situation and aims, and how much tax you could potentially save.
British expatriates need to keep informed of the UK tax reforms included in the last two budgets, as many have long-reaching implications and also impact you here in Portugal. Investigate options to protect yourself and your heirs where necessary.
If you obtained non-habitual residence status before the regime closed to new applicants, keep a close eye on how many years you left of your 10-year term. Once your NHR status ends, your worldwide income and gains become liable to Portuguese taxation at the full rates. Allow plenty of time to ensure you have made the most of all the benefits and to restructure your assets for the most tax-efficient transfer out of NHR possible.
Estate planning
Do not leave estate planning to the final stage of financial planning. It is vital to review your estate planning when living in Portugal.
Although the local inheritance tax (‘stamp duty’) is very limited, Portugal’s ‘forced heirship’ rules restricts who you can leave your assets to. This can have unwelcome consequences for certain families unless you plan ahead.
The UK’s domicile-based system for inheritance tax ended in 2025 and the replacement long-term residence approach is much more beneficial for British expatriates in Portugal. It presents an opportunity to remove your assets from the UK inheritance tax (IHT) net, if you live abroad long-term. Note, though, that UK pension funds become subject to IHT from April 2027. If you wish to explore options to protect your heirs, you need to start soon.
Financial structuring for life in Portugal
Perhaps the key rule for financial planning is that it must be specifically structured around your personal circumstances – your lifestyle today and plans for the future, family situation, income requirements, objectives, time horizon and risk tolerance.
If you don’t already have a financial plan in place for Portugal, or you haven’t reviewed your savings and investments recently, you need to check they are suitable for you today and the current economic climate. Do they have the right balance of risk and return? Do you have adequate diversification? Can they provide income without risking the capital? Could you consolidate shares and funds so they are easier to manage?
At the same time, consider your tax liabilities on investment income and gains, and whether you could take advantage of tax-efficient arrangements as a resident of Portugal. Also, how will these savings be passed to your heirs? What inheritance taxes will they have to pay? Can the funds be passed on directly or will there be a lengthy probate process?
And when deciding what to do with your pensions, take care to explore all your options to establish the most suitable approach for you with regulated advice.
Pulling everything together
Every family is different. Your strategic financial planning must be carefully designed for you. All the various aspects should work cohesively together to create an overall wealth management plan that provides long-term financial security for yourself and achieves your wishes for your heirs.
It’s essential to thoroughly consider all aspects of your financial plan, particularly the complexities of cross-border taxation and estate planning. Professional advice can help you avoid unintended consequences from interconnected financial decisions. Blevins Franks is the leading cross-border wealth management specialist and will help you find the most effective and personalised solutions – our key aim is give you lasting peace of mind.
Ultimately, spending time on a financial health-check now can help ensure you and your family are in the best financial position for 2026 and long into the future.Keep up to date on the financial issues that may affect you on the Blevins Franks news page at www.blevinsfranks.com