Mitigating serious tax burden through early planning
The key to mitigating this financial storm lies in early planning. By taking proactive measures within the first seven years of your NHR tax status, you can maximise your tax and financial position for up to 20 years.
A critical aspect of early planning involves rebalancing your investment portfolio to favour tax-efficient investments. This could include shifting assets into capital gains-exempt investments or those offering tax deferral strategies. By carefully structuring your investment portfolio, you can minimise your tax liability and enhance your overall financial position.
Portugal offers a variety of tax deductions and credits that can further reduce your tax burden. These include deductions for mortgage interest, medical expenses, and charitable donations. By taking advantage of these tax benefits, you can further optimise your financial situation and maximise your savings.
Marcel Léger, a retired investment banker, had this to say about NHR tax planning: "I was comfortably settled into my NHR tax status, six years into the 10-year tax incentive period, the thought of its eventual expiration never crossed my mind,"
"It wasn't until a close friend, also an NHR tax holder, faced a sudden surge in tax liability upon reaching the end of their NHR period that I realised the urgency of planning ahead."
This financial wake-up call prompted Marcel to seek proactive measures to mitigate his future tax burden. "I turned to Portugal Pathways, a trusted advisor for many of my friends and acquaintances," he explained. "With their expert guidance, I was able to restructure my finances and implement tax-efficient strategies, effectively reducing my tax rate to a mere 3.8% for an additional 10 years."
Marcel's experience highlights the importance of early planning for NHR tax holders. "It's easy to get caught up in the immediate benefits of the NHR tax regime and overlook its temporary nature," he cautioned. "But failing to plan for the future can have serious financial consequences. By taking proactive steps, you can safeguard your income, assets, tax and wealth for the future and continue enjoying the benefits of living in Portugal."
Don't Wait Until It's Too Late
The time to act is now. Don't let the temporary nature of the NHR tax regime put you in a false sense of security.
By taking early action and seeking expert guidance, you can safeguard your financial future and continue to enjoy the benefits of living in Portugal.
Contact us for personalised guidance on your income, assets, tax, and wealth management as structuring your unique circumstances is vital to your ongoing life in Portugal.
Talk to our experts
Schedule a free consultation with one of our expert team, so that we can help you plan for the end of NHR and beyond to optimise your wealth.