Depending on where you live, you may have access to tax-free savings accounts which are tax wrappers that allow you to grow your savings without being subject to the tax that normal savings accounts are subject to. In the UK, for example, savers can put their money into an ISA or individual savings account and any growth would not be subject to tax. But what happens when you move to Portugal?
According to Paula Santos from Tax Team Consulting, “Portugal will only tax when the sale takes place. If you keep growing the investment, it will not be taxed. Only on the gain.”
If you’re thinking about moving to Portugal for just a few years, this means that you could hold your savings or investments in your TFSA (tax free savings account) for the entire time you’re in Portugal without having to worry about paying tax on them in Portugal. This assumes, of course, that the actual savings account allows you to move abroad and maintain the account.
If, however, you decide to withdraw from the account while you’re resident in Portugal, it sounds like you will need to consider the tax implications. However, Santos says that you will only pay tax on the gain and not on the entire amount in the savings account.
If you having savings and investments, whether in a tax free savings account or not, it’s definitely a good idea to speak to an accountant (such as Paula Santos) before moving to Portugal.