While much attention is often (and rightly) placed on the valuation, deal and legal structuring, and succession planning aspects of a transaction, there is another dimension that can significantly impact the final result: the personal tax position of the seller.

One option that has become increasingly relevant in recent years is to consider the Portuguese tax framework. Portugal has long attracted international individuals with its lifestyle appeal, but certain elements of its tax regime may also be of interest to entrepreneurs contemplating the sale of a UK-based business.

If properly structured and timed, a change of residence to Portugal prior to the sale may allow for the realisation of capital gains with a favourable tax treatment — and in some cases, full exemption. While such an approach must be carefully planned to comply with both UK and Portuguese tax rules, the potential benefits can be substantial.

This may be possible under the NHR 2.0, if eligibility requirements are met, since there is a tax exemption on the majority of income and gains obtained out of Portugal. In the case of UK private company shares, this may create a window of opportunity for owners willing to take a long-term view on their exit strategy.

That said, cross-border transactions of this nature involve many moving parts — including residency rules, anti-avoidance provisions, double tax treaties, and the UK’s temporary non-residence regime. Early engagement with experienced advisers in both jurisdictions is essential.

If you are contemplating a sale in the medium to long term, it may be worth exploring whether the Portuguese tax regime could play a role in your broader succession and wealth planning strategy.

Bernardo Pereira, Tax Partner at Forvis Mazars in Portugal (bpereira@mazars.pt)

Paul Joyce, M&A Partner at Forvis Mazars in the UK (paul.joyce@mazars.co.uk)