The difference between tax residency and legal residence: EU, UK, Portugal

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The content on this channel is for educational and information purposes only. It should not be relied on as advice, and you should always take qualified advice before making any changes to your personal position.

Whilst I have experience in the financial and tax industry, this channel is for recreational purposes and is not an advertisement for my business or services. Its purpose is to share quality information.

Whilst every care is taken as to the accuracy of the information in these videos, the information provided is based on the understanding of the rules at the time, and rules can change with little or no notice.

Whilst I cover a wide range of issues on the channel, in my professional role I specialise in tax efficient investments, UK and overseas pensions, estate planning, and wealth management for expatriates based in Portugal. Unfortunately, I do not offer visa or tax return services, nor can I assist US nationals.

Thank you for your support and understanding. I hope to continue to provide you with valuable information to help you with your life in Portugal. If you have any suggestions for content you would like to hear, please let me know


In this video, I explain the concepts of residence as compared with tax residence here in Portugal and also look briefly at domicile and nationality.

There will be further videos in this series building on the topics covered.

Legal residence – the right to reside in a country so for Portugal, this could be done through an EU residency application, if you are an EU citizen, or a visa application such as the Golden Visa, D7 visa or D2 visa. (please see the following video for more information on visas

   • Portugal residency visas explained: D7 vis...   )

Legal residency can be important for certain things such as healthcare, length of time you’re allowed to spend in a country, However, it does not impact on your tax status

Tax residency - as a general rule is based on physical presence and a typical definition is if you spend more than 183 days in a country, you could be regarded a tax resident there

Why is tax residency important. It is important because it determines who has taxing right over you

Generally you would be subject to tax on your worldwide income and gains wherever they arise

It is also important in ensuring that you not considered tax resident in more than one jurisdiction

Definition of tax residency in Portugal – two key ones:

https://www.oecd.org/tax/automatic-ex...

Establishing residence here and tax residence is the key and gateway into applying for the Non Habitual Residence scheme (NHR) - please see my separate video here:

   • Non Habitual Residence (NHR) Portugal tax ...  

Two myths in relation to tax residency:

1. You are not able to choose your tax residence per se, the only way of choosing is by limiting spent spent in any one country

2. Registration in a country does not in itself make you a tax resident there - again this comes back to the requirement for physical presence

Nationality - Your nationality derives from your birth place and coming to live in Portugal does not change that (although you are able to apply for Portuguese nationality after 5 years here, and not have to sacrifice your existing passport)

One critical point when becoming tax resident in Portugal is ensuing you have clearly left your previous country of tax residence. The UK in particular has stringent rules in this area, meaning you could in some circumstances be limited to 16 days back in the UK without falling back under its tax net.

Domicile – this is a confusing term used differently but my focus is on the specific application it has for UK nationals and I have covered this in more detail in the video below:

   • Is there inheritance tax or succession tax...  

#NHR #movingtoportugal #d7visa #goldenvisa