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INVESTMENT OPTIONS IN PORTUGAL

In Portugal, the same principle of deferring tax until withdrawals are made will apply and once again, only the gain or profit element is taxable.

Whilst an individual can choose to include the gain element of withdrawals in their other taxable income, with tax rates of between 14.5% and 48% applying, there is an alternative, as this is an insurance based investment.

Providing at least 35% of the “premium” due under the plan is paid within the first half of the lifetime of the life insurance agreement, then the rate of tax applicable to realised gains will be a flat rate of 28%. (The amount invested is considered to be the premium and as this is a capital investment, typically, the whole premium will be paid at inception.)

However, the proportion of the gain to be taxed will reduce over time.

  Once the investment has been held for 5 years, the taxable amount of the gain will be reduced to 80% which creates an effective rate of 22.4% of the whole gain element.

Once the investment has been held for 8 years, the taxable amount of the gain will be reduced to 40% which creates an effective rate of 11.2% of the whole gain element.

Careful financial planning on an individual basis will ensure that clients benefit fully from the individual country rules and benefits.
ABC Europe Limited
First Floor, Unit 9/10, Riverview Business Park, Station Road, Forest Row, East Sussex RH18 5FS, United Kingdom.
Tel: +44 (0) 20 3167 0880 Email: info@abc-eu.com

The financial advisers trading under Alexander Bates Campbell Europe Limited are members of Nexus Global. Nexus Global is a division of Blacktower Financial Management (International) Limited (BFMI). All approved members of Nexus Global are Appointed Representatives of BFMI. BFMI is licensed and regulated by the Gibraltar Financial Services Commission (FSC) and bound by the rules under license number 3647.
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