Portugal

British interest in relocating to Portugal is rising sharply ahead of UK tax reforms. According to The Portugal News, enquiries from UK nationals have increased by about 30% over the past year, as families seek financial stability and lifestyle benefits before new tax measures take effect.

With the Autumn Budget expected to raise taxes on global income and high-value property, many Britons are fast-tracking plans to move south. Immigrant Invest, a consulting company specialising in investment migration, analysed the trend and explained why Portugal is one of the most attractive destinations for British nationals seeking relocation.

The trigger — What the UK tax changes mean

Major reforms ahead. The British government is planning major changes to how it taxes global income, dividends, trusts, and foreign assets. Designed to raise revenue and close loopholes, these measures may also increase the tax burden on those with international income.

Impact on global earners. Until now, Britons with non-domiciled status could shield some foreign earnings. From April 2025, this distinction will narrow sharply: foreign income and capital gains may be fully taxed after a short residence period, while offshore trusts face tighter scrutiny and fewer exemptions.

Rising concern among the internationally mobile. Anxiety is mounting among retirees, investors, and professionals with diversified income. For those with property or portfolios abroad, uncertainty over UK taxation is pushing them to seek more predictable systems in Europe.

Relocation as financial planning. Since Brexit, EU residence permits are required, yet relocation has become a key wealth-management tool — a way to secure stability, reduce tax exposure, and regain freedoms once offered by EU membership.

Why Portugal tops the list

Familiar and welcoming environment. Portugal remains a leading destination for UK nationals — politically stable, safe, and English-friendly. With direct flights, international schools, and a relaxed lifestyle, Portugal offers a soft landing for new residents.

About 48,000 UK citizens are registered as residents, with another 30,000 owning property or living part of the year in Portugal. This makes it easy for newcomers to settle, access services in English, and feel at home.

Simple residency routes. Portugal offers several residence options that require no major investment. The D7 Visa is among the most appealing for Britons with steady passive income, such as pensions, dividends, or rent. It provides a path to residence without buying property or starting a business.

Cost and quality of life. Portugal's cost of living is generally 30-40% lower than in the UK. Daily expenses, from groceries to healthcare, are more affordable, and property prices outside Lisbon and Porto remain competitive. The climate, safety, and strong public healthcare system continue to draw British retirees and remote workers alike.

Predictable fiscal environment. Even without the former Non-habitual Resident regime, Portugal's tax rules are transparent and supported by a clear double-taxation agreement with the UK. Many newcomers find that, once they settle and understand the system, their total tax burden remains moderate compared with Britain's rising rates.

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Tax comparison: The UK versus Portugal

Income and pension taxation. In the UK, pension income can be taxed up to 45%, depending on total earnings. In Portugal, pensions and other foreign income are taxed under the general progressive income tax rates, which range from about 13-48%.

Under the Portugal-UK Double Taxation Agreement, pensions are usually taxed only in Portugal, which helps prevent double taxation.

While Portugal's marginal rates are similar to the UK's, the effective rate for retirees is often lower due to lower income brackets, deductions for dependants or health expenses, and the absence of National Insurance contributions. As a result, many British retirees find their overall tax burden in Portugal lighter than in the UK.

Capital gains and inheritance. Portugal has no inheritance or wealth tax, and capital gains on long-held property can qualify for partial exemptions. In the UK, inheritance tax reaches up to 40% and applies to worldwide assets. This difference makes Portugal particularly appealing for families with property or investment portfolios.

Bottom line: while Portugal no longer offers a flat tax rate for newcomers, its transparent system, moderate rates, and absence of wealth and inheritance taxes create a flexible environment for people with passive income.

How the D7 Visa fits into this trend

Designed for income, not investment. The D7 Visa targets those with stable income rather than capital wealth. Applicants must show at least €870 per month and secure accommodation in Portugal. This low threshold attracts retirees, freelancers, and remote professionals.

Clear path to residence and citizenship. The initial permit lasts two years, renewable for three. After five years of residence, holders may apply for permanent residence or citizenship if they meet stay requirements and pass a basic Portuguese test.

Benefits beyond taxation. D7 holders gain access to Portugal's healthcare system, the right to work or start a business, and simple family reunification, allowing spouses and dependants to join under the same permit.

Shifting demographic. Once for retirees, the D7 now appeals to mid-career professionals in IT, finance, and consulting, many relocating to Lisbon or Porto for stability and lifestyle benefits before the UK Budget changes take effect.

Conclusion: What this says about post-Brexit Britain

The surge in British relocations shows how people are redefining their connection with Europe. What was once a political right — free movement — has become a personal strategy for stability and security.

Célia Castilho, Head of Immigrant Invest's Portuguese office, notes that 'UK citizens increasingly view residence as part of financial planning. Portugal's framework blends lifestyle appeal with reliable taxation — a balance rare elsewhere in Europe.'

This new wave of Britons moving to Portugal is not about leaving the UK but staying ahead. Confronted with changing tax rules and economic pressure, they are seeking certainty — and for many, that lies on the Portuguese coast.

About Immigrant Invest

Immigrant Invest is a consulting company, specialising in investment migration. Its team researches global mobility trends and advises investors and professionals on compliant, long-term relocation strategies.

Press contact:

  • Célia Castilho
  • +356 2033 0178
  • digital@immigrantinvest.com