What are insurance wrappers, and why are they important for NHR tax holders?

Insurance wrappers (unit-linked insurance bonds) offer tax deferral and reduced taxation on withdrawals. In Portugal, withdrawals after 8 years are taxed at 11.2% (a 60% reduction from the standard 28%). Tax is applied only to the gains, not the principal. These structures can facilitate tax-efficient estate planning. Early transition into an insurance wrapper can help mitigate future tax liabilities. However, 77% of expats with NHR fail to act early, risking exposure to high post-NHR tax rates. Seeking professional advice ensures long-term protection for your income and assets.