With economic growth slowing, inflation still above target and limited fiscal space available, analysts widely believe the Budget will include adjustments affecting property, pensions, investment income and long-standing reliefs.

These measures would apply regardless of where an individual currently lives, as long as UK-sourced assets or income remain part of their financial affairs.

“A significant number of residents in Portugal still have UK exposure through property, pensions or investment accounts,” says Jake McLaughlin, Executive Director of deVere Portugal, part of one of the world’s largest independent financial advisory organisations.

“The upcoming Budget is likely to include technical changes that influence how those assets are taxed, even for people who left the UK years ago.”

One of the most anticipated areas concerns income tax thresholds and allowances. The existing freeze has already been drawing more individuals into higher bands, and extending it further has been discussed as a way to raise revenue without altering tax rates.

“Threshold freezes work quietly in the background,” McLaughlin says.

“They reduce the real value of allowances over time. Anyone receiving income from the UK, including salaries, rental income, or pension payments, can feel the effect without realising why their position has shifted.”

Property is another focal point. Options under consideration include additional council tax bands for higher-value homes, revised rules for capital gains on certain main residences, and further measures addressing second properties.

“Many people in Portugal retain a UK home either for family reasons or long-term planning,” McLaughlin notes.

“Changes to valuation bands or the way gains are treated could influence decisions on when to sell or restructure.”

Pensions could also see adjustments. With reliefs carrying a large fiscal cost, the Treasury has been assessing potential refinements to how contributions, employer arrangements and fund values are treated.

“Residents in Portugal who draw from UK pensions or continue to build UK entitlements should monitor developments closely,” McLaughlin explains.

“Small alterations to the rules can influence expected outcomes over a long retirement horizon.”

Rental income may be affected as well. One proposal being examined would bring rental income for individuals within the scope of National Insurance Contributions, which would increase the tax burden for non-residents who still own property in the UK.

“Rental income is central to many long-term plans,” he comments. “Additional contributions would change net returns, and that has a direct impact on overall planning.”

Investment structures are also on the table. Speculation includes adjustments to ISA rules, revised treatment of dividends and incentives aimed at strengthening the UK’s capital markets.

“Residents in Portugal who still hold UK portfolios need to understand how two tax systems interact,” McLaughlin explains. “A shift in one jurisdiction can alter planning in the other.”

To help residents in Portugal understand these developments, deVere Portugal is hosting a live online session: What It Means for Your UK Assets in Europe. Registration link here: https://us06web.zoom.us/webinar/register/3717622601409/WN_GSxTCKmUQSCicL9JFu9cVQ

The event, held in partnership with ILYA Advisors, will outline expected Budget measures, risks and opportunities for those with UK-linked holdings, and practical planning considerations under a cross-border framework.

“People want clarity. The session will explain the changes being discussed and how they could influence UK income, property, pensions and investments for anyone based in Portugal or elsewhere in Europe.”

The webinar will take place on Tuesday 2 December, with registration open to all residents across Portugal who wish to understand the evolving UK policy environment and its potential impact on their assets.


by Staff Reporter