British expatriates who move to Portugal could lose their tax free status under new plans being brought in by the left-wing government in Lisbon.Or perhaps it's just the work of those dastardly left-wingers and Communists who have been elected by the Portuguese...?
The ruling Socialist Party introduced an amendment to this year's budget which will levy a 10pc tax on the foreign revenue of British pensioners and other foreigners who move to Portugal.
In the wake of the 2008 financial crisis, Lisbon introduced a 10-year tax exemption for European nationals on condition they lived in Portugal for six months a year.Oh, no: it was just a temporary measure to stimulate investment at a particularly stressed economic time.
To enjoy this tax perk, they had to qualify for non-habitual residence (NHR) status, under which a person cannot have lived in Portugal for the previous five tax years. The scheme allowed expats to pay no tax for 10 years on foreign income. For Britons this could be pension income, dividends, rental income and non-Portuguese employment income.
The relief was designed to try to bring badly needed foreign investment into the ailing Portuguese economy.
The breathless headline of "British pensioners in Portugal to lose tax-free status" does, though, illustrate quite nicely how difficult it is for governments to remove goodies handed out to people—even when those goodies were always intended to be temporary...