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Inheritance Tax Portugal

If you are – or want to be a Portuguese resident – it is important to note that you are subject to Portuguese law, even if the assets that comprise your estate are located in different countries. According to article 4 of Regulation (EU) N. 650/2012 of the European Parliament, the courts of the Member State in which the deceased had his/her habitual residence at the time of death shall have jurisdiction to rule on the succession as a whole.

Inheritance Tax of choice

You may choose the law of your nationality to govern your succession (or any one if you have multiple nationalities). If you do not exercise this choice, the Portuguese law will govern your succession as a resident at time of death.

 

Inheritance Tax Portugal offers one big advantage: having Portuguese law governing your succession is that since 2004 there is no inheritance tax in Portugal. This tax exemption only applies to family members that are directly related – ascending or descending lines (in other words, parents or children of the deceased), as well as the spouse or civil partner – the latter since 2009.

It is important to bear in mind that, despite not being taxed by the State, it is mandatory to declare the assets inherited at the tax office, up to three months after death, to avoid penalties.

Beneficiaries who are not part of the exemption rule (siblings, niece/nephew, uncle/aunt, cousin of the deceased) will need to pay stamp duty tax, which is a flat rate of 10% of what is being inherited (there is an exception from property inherited which adds 0.8% to the 10%). This tax may be paid in up to 10 instalments.

Wills and Intestacy

Portuguese law includes two types of succession: legal and voluntary, the latter being governed by a Will.

When there is no Will, the estate is divided by the legitimate heirs, (children, spouse and parents).

If you prefer to decide the destination of your estate, you can make a Will (private or public). Both types need to be notarised by a public notary. Note that you can only dispose freely a part of your estate, which vary depending on the number and nature of legitimate heirs.

This said, Inheritance Tax in Portugal deserves good planning in order to avoid future difficulties due to tax amount to be paid by any individual heirs.

For example:

  • If the spouse is the only legitimate heir, he/she is entitled to half of the inheritance;
  • If the legitimate heirs are the spouse and children, the legitimate quota is 2/3 of the inheritance. The available quota to be freely disposed is 1/3;
  • If there is no spouse, the children are entitled to half of the inheritance or 2/3, depending if there’s one or more descendants;
  • If there are no descendants, but the spouse and ascendants, then the legitimate quota is 2/3.

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Client testimonials

"It would help to understand what the process was and to be informed more along the way . I do understand I was not the only client and covid made things a little more difficult, but being in another country you have a feeling of not been kept informed and you feel lost especially when it's dealing with a death ."

Maureen Home (Aug 10, 2021)

Inheritance

Available in the following locations: Aveiro, Castelo Branco, Faro, Lisbon, Portimão, Porto, Viseu.

* If your local town is not listed, a lawyer from our nearest office will be happy to assist you.

Location

1Who is this Service for?

For those who need to arrange for an estate abroad to be transferred to beneficiaries under a Will or via intestacy

2What does this service consist of?

  • Assistance obtaining a legalised copy of the death certificate.
  • Arrange a legal copy of any existing will.
  • Verification of the existence of any life insurance policies.
  • Power of Attorney to avoid excessive travel costs
  • Inheritance Acceptance Deed drawn-up with the public notary.
  • Payment of Inheritance Tax at the office.
  • New titles in the inherited assets are inscribed in the relevant registry
  • Simultaneous sale or disposal of assets if required (please request quotation).

 

Support services

3Free Support Services Included

When combined with the free and innovative Advocate Abroad support services you can be sure that you are obtaining completely transparent legal services from registered and regulated English-speaking lawyers abroad.These support services include:

  • Verification of the regulatory status of your professional.
  • Fees as recommended by the Local Professional Body
  • Fees specified in advance and legally guaranteed.
  • Service levels agreed in advance and guaranteed.
  • All professionals must hold professional indemnity insurance.
  • Professionals' proficiency in English monitored.
  • Continuous quality controls and reviews.

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