A decade since Brexit: A reminder to plan ahead for the end of NHR tax benefits

As the 10th anniversary of the EU referendum looms in the UK, it should act as a timely reminder to many expats who subsequently took advantage of Portugal’s enticing Non-Habitual Resident (NHR) tax regime to act now to avoid being hit with unwelcome financial burdens.

NHR offered a flat tax rate of 20% on certain income and exemptions on global income. For many Brits, it proved an attractive alternative after the UK voted to leave the European Union in 2016.

The regime’s reduced tax rates allowed new residents to maximise their post-Brexit financial planning.

Closed for new applicants since 2024, it was subsequently replaced by the IFICI (Tax Incentive for Scientific Research and Innovation), often referred to as NHR 2.0.

But the original NHR had a 10-year lifespan - and once expired, many face shifting into Portugal’s top rate progressive tax bands - up to 48%.

However, by taking steps well in advance, those still enjoying the benefits of NHR can take mitigating action to prevent such a significant increase.

Contact Portugal Pathways’ expert team to arrange a discovery call to plan for the end of your NHR tax status.

But, ideally, seeking that legal and financial advice should come within the first seven years to achieve the best possible outcomes.

Explains Steve Philp, director of Portugal Pathways, which helps high-net-worth individuals navigate Portugal’s tax landscape: “While 2026 marks ten years since the Brexit vote, the anniversary should act as a wake-up call to many benefiting from the original NHR that they need to act well in advance of its 10-year shelf life expiring if they want to avoid a sharp hike in their tax bill.

“There are solutions available - if they’re acted on in good time, ideally before year seven of their NHR tax status period.

“Delaying this planning and restructuring of your finances, whilst a current NHR tax holder, could lead to a significant tax burden after the 10-year tax period finishes.

“Failure to act early will impact your income and assets, as well as potentially your lifestyle in Portugal.”

While the Brexit vote took place in 2016, much of its impact was not felt until the transition period ended at the end of 2020.

It was then that many took advantage of Portugal’s original NHR. And for those now halfway through their 10-year period, the time to act is now.

For those more than seven years into the regime, action can still be taken, but it proves more challenging.

Adds Steve Philp: “While it is still possible to connect them with qualified tax and wealth advisors, the delay makes it significantly harder to avoid the looming hike in tax obligations once NHR tax status expires after ten years.

“This can’t be enacted at the last minute; it has to be carefully planned so that you are optimised for low tax once your NHR tax status of 10 years comes to a close.”

The 10th anniversary of Brexit should serve as more than just a political milestone; it is also a timely reminder for expats to review their long-term financial planning.

The post-Brexit landscape has continued to evolve, and what once seemed like a distant consideration has now become an urgent priority.

Acting early ensures flexibility, choice, and peace of mind - while delaying could lead to limited options and avoidable tax exposure.

The conclusion of the 10-year NHR period is not the end of opportunity - but it does require foresight, professional advice, and decisive action.

‍

About Portugal Pathways

‍‍Portugal Pathways has supported hundreds of Golden Visa residency-by-investment applications and provides expert guidance through its professional supply chain network on estate planning, wealth management, Golden Visa and tax optimisation, including post-NHR / IFICI tax regime planning, as well as private healthcare, money transfers and bespoke relocation and luxury real estate solutions to enhance life and investment in Portugal

‍

Disclaimer: The information on the Portugal Pathways and Portugal Investment Owners Club (P Club for short) websites and in email communications is for general informational purposes only and should not be construed as legal, tax, or financial advice. You should consult and check with a qualified professional advisor before relying on any information provided on this website or in email communications. As it relates to investments in Golden Visas or other wealth management solutions offered by regulated and professional advisors, it is important to note that past performance is no guarantee of future returns. Private equities can be highly illiquid and come with risk and should always be under professional independent advice. Golden Visa investments need to be held for 6 to 7 years to allow for permanent citizenship/passport in the EU.

‍

‍