Generally Capital gains on securities sold whilst a Portuguese tax resident, are taxed at an autonomous rate of 28% and there are some deductions like costs associated with the acquisition and an indexation relief if the securities have been held for more than 2 years.

In 2023 the Portuguese Government legislated that any gains made from the trading of securities, whereby the purchase and sale of a security is within one year, when aggregated to other income in that year, exceeds the upper threshold of €81,199, the gain will be taxed at the person's marginal rate i.e. up to 48% and not the flat rate of 28%

So particular care needs to be taken if trading securities and selling a home abroad to ensure that the thresholds are not breached. It is also important for those with discretionary managed investment accounts be aware of the trading the fund managers of these portfolio carry out during a year as it may also lead to unforeseen higher taxes.

The Labour Government in the UK is widely anticipated to target capital gains tax thresholds in the upcoming budget on 30th October, which potentially could see implementation of changes made at midnight that day. This has led to a flurry of homeowners with second properties taking advice and, in some cases, attempting to dispose of shares and properties to avail of the current rates. But these changes may not be implemented, it is speculation. What is clear is preparation and knowledge are needed.

Given the potential for higher tax, now is the time to consult a locally based financial adviser to help plan for the changes in Portugal and possible changes in the UK. Join us on 27th September 2024 at the Tivoli Marina Hotel Vilamoura by registering @ https://www.opesfidelio.eu/portugal24/