Non-Habitual Resident and stock trading

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Non-Habitual Resident and stock trading


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Old 29th January 2016, 04:14 PM
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Default Non-Habitual Resident and stock trading

Hi All,

I have read many many threads and links regarding the NHR but have yet to come across a discussion of frequent trading in non-Portuguese securities. I believe it should be non-taxed in Portugal but I would love to actually hear from someone doing it and not being taxed in any country. Above the exclusion amount I believe this would be impossible for a US citizen but for the rest of us, I'm hoping it's viable.

TIA

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Old 29th January 2016, 05:12 PM
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Soon after posting the above, I came across the following passage from .belionpartners.com/portugals-non-habitual-resident-regime.<html> Capital gains deserve careful consideration. Under article 13, they are treated differently according to whether they originate from the disposal of immovable or movable property. While capital gains from the alienation of real estate may under the double taxation treaty be taxed in the country in which the property is located and will therefore be exempt in Portugal, capital gains from the alienation of other types of property (notably securities) are taxable only in the beneficiary's country of residence. As such, capital gains from the sale of securities will be subject to tax in Portugal, currently at a flat rate of 28%.".
It seems that Portugal doesn't allow for the possibility that another country "may" tax the capital gains if you are tax resident in Portugal and therefore the NHR doesn't help in this case. x 1000000!
If this has changed/someone from a country such as Canada has actually not been liable for capital gains on securities, please let me know!-)

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Old 30th January 2016, 02:05 PM
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This is a topic that interests me. I too have been trying to obtain an answer as to the taxation of CGT on share sale profits. So far I have been given conflicting views. The Bellion quote is taken from the DTAs which Portugal has with many countries. I have checked a few and this is the wording I found. However, others claim that CGT on non-Portuguese share sale profits can be obtained tax free. I have yet to discover the basis on which they make this claim.

There are a couple of points you may wish to consider:

Firstly, you mention "frequent trading". In this case the Portuguese tax authority may regard trading as being your occupation, and tax you as such. This happens in many countries where there is generally no CGT.

Secondly, the tax situation may be different if you were to trade CFDs. As you are no doubt aware, in the UK this is regarded as betting (indeed, the UK uses the term spreadbetting), and is not taxable. Perhaps the same is true of Portugal?

If you manage to find any more information on this subject, I would very much like to hear it.

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Old 30th January 2016, 08:07 PM
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Quote:
Originally Posted by Transcend View Post
... Secondly, the tax situation may be different if you were to trade CFDs. As you are no doubt aware, in the UK this is regarded as betting (indeed, the UK uses the term spreadbetting), and is not taxable. ...
AFAIK trading CFDs is taxable (for a UK resident) in the UK as either income or capital gains, depending on circumstances.

Spread-betting is different and is deemed to be gambling and not normally taxable in the UK.

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Old 1st February 2016, 03:16 PM
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Thanks for the replies. Unfortunately I have not been able to find any more information. That this isn't discussed more shocks me as many retires will have stock portfolios as well as pensions. It is of CRITICAL importance for many who would consider Portugal as a possible retirement location.

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Old 2nd February 2016, 12:59 PM
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Like you, I have read widely in search of the answer to this question. I have initiated threads on both this forum and others, but like you, have failed to get an answer that gives me the confidence to proceed with a move to Portugal.

Because of the delay between arriving in Portugal and discovering the outcome of their NHR application, the applicant is running the risk of being liable for significant amounts of Portuguese tax if their NHR application is rejected.

Although I am still keen on Portugal, there are other countries in Europe where capital income from shares definitely is not taxed, and am beginning to wonder if one of these would be a safer choice for retirement.

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Old 2nd February 2016, 03:48 PM
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Quote:
Originally Posted by Transcend View Post
This is a topic that interests me. I too have been trying to obtain an answer as to the taxation of CGT on share sale profits. So far I have been given conflicting views. The Bellion quote is taken from the DTAs which Portugal has with many countries. I have checked a few and this is the wording I found. However, others claim that CGT on non-Portuguese share sale profits can be obtained tax free. I have yet to discover the basis on which they make this claim.

There are a couple of points you may wish to consider:

Firstly, you mention "frequent trading". In this case the Portuguese tax authority may regard trading as being your occupation, and tax you as such. This happens in many countries where there is generally no CGT.

If you manage to find any more information on this subject, I would very much like to hear it.
Thank-you very much for the reply. There is such a scarcity of information on such matters, unfortunately. Edit: Refreshed the page but didn't see your above post before writing this so didn't quote your last post instead.

Malaysia was very much a country I was considering due to it's not taxing foreign source income but my wife who grew up in a Muslim environment says no way in hell.
Even though they are far better than most Muslim countries (from what I've read), there's no convincing her.


Last edited by BurdenedCanuck; 2nd February 2016 at 03:54 PM. Reason: Refreshing page failed me ;)
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Old 2nd February 2016, 04:08 PM
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Quote:
Originally Posted by Transcend View Post
Like you, I have read widely in search of the answer to this question. I have initiated threads on both this forum and others, but like you, have failed to get an answer that gives me the confidence to proceed with a move to Portugal.

Because of the delay between arriving in Portugal and discovering the outcome of their NHR application, the applicant is running the risk of being liable for significant amounts of Portuguese tax if their NHR application is rejected.

Although I am still keen on Portugal, there are other countries in Europe where capital income from shares definitely is not taxed, and am beginning to wonder if one of these would be a safer choice for retirement.
Once I thought Portugal was an option I was excited and put most of my effort into investigating that option and forgot a lot of what I had discovered regarding other countries before (I'll have to review my scattered notes ...). Next in line for me was Uruguay, but I've been reading a lot of negative things crime-wise about it lately (not that it's still not better than other South American countries with respect to that though). If Costa Rica is ok crime-wise in a city with good medical facilities (and coolish weather for the wife(so in the highlands)) then that might be a better option. It seems that the Netherlands might tax equities trading as income, instead of taxing it @ 1.2% I believe it is, and if so, then that is out. And, that sort of thing seems to be a problem in many countries - that they might declare you as trading for income (etc) and fully tax you. Singapore is another country that may tax you that way. I feel safest with countries that just don't tax foreign income period.

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Old 4th February 2016, 06:42 PM
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What?! From: .lowtax.net/information/monaco/monaco-residence-and-liability-for-taxation.html :
"if an individual is in business as a sole trader or on his own account, he will be taxed according to the principles of the Business Profits Tax " .

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Old 8th February 2016, 01:53 PM
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Depending on personal circumstances and value of potential CGT I would recommend you have a single session with one of the international tax/accountancy firms in Lisbon. Personally we used PWC, I can share contact details of the guys we spoke with in a PM if required. The guys we spoke with explained many of the points raised in the this thread. I'd like to say I fully understood all of it, but the salient points relating to us were covered.

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