[Verinia]

Can anyone help me with this please? We are a semi retired couple moving to Portugal. My husband has a small Ltd company delivering IT services mainly done over the Internet, which he intends to carry on remotely from Portugal.mWe plan to become residents shortly and although I understand there is a double taxation treaty, the tax office has told my husband that any work he does on Portugese soil is subject to Portugese tax, even if the work is for an English company.

My questions are:

Can he continue to hold a LTD company in England even if a Portugese resident? What of his annual tax returns and registration at Companies house?

Will all the tax be due to Portugal?

Also we have work pensions that we have taken early. At the moment they are taxed in England. Will this continue if we are residents here?

I know we will need a good accountant here, but just wanted some pointers. Any help very gratefully received.

Thanks

 

[canoeman]

As Portuguese Residents you will obliged to file yearly tax returns, part of which must be your worldwide income and tax paid in other countries.

Your entering one of these really complicated areas and should take very good professional advice from an Accountancy firm with feet in UK & Portugal.
Running business from Portugal will raise complications for him regarding N.I in UK and also Social Security here.

It's not just about tax but HMRC not classing you as a UK Tax Resident which can raise further complications especially if you retain UK assets.

Re where to pay tax on your UK pensions, think it really depends on advice your given on business.

Just a note as it helps organize things a Portuguese Tax Year is January to December.

 

[notlongnow]

Agree that you need accountancy advice, but I can give you some info as I also have a UK Ltd company:

1. You can still keep the company once resident here. As a company director you will always have to do UK self assessment, even if it doesn't mean you owe anything there.

2. Once fiscally resident you pay Portuguese tax on your worldwide income. If your husband pays himself through UK payroll, HMRC should eventually give him a tax code of NT (no tax) , so the UK payroll will have no tax deducted. This can all take time. He should never end up double-taxed - Portugal will take into account tax paid into the UK provided he has wageslips, P60s etc. If the tax due here is more than it would be in England (which it is in our case) you still have to pay the difference.

National insurance / social security is a whole extra can of worms that I'm not even going to try to explain.

It took me three accountants before I found one who could deal with this situation effectively. PM me if you want a recommendation.

 

[notlongnow]

PS. If he takes money out as dividends there's not the same tax relief here that there is in England. I ended up having to pay tax here in my first year that I wouldn't have had to pay if I'd stayed in the UK.

 

[Verinia]

Thankyou very much for the useful advice. I am grateful for the benefit of your experience.