UK inheritance tax for expats in Portugal

Since 6 April 2025, exposure depends on a person's UK tax-residence history, not on where they currently reside. 

Two separate tax systems sit behind that single fact, and British expats in Portugal routinely run them together: UK inheritance tax (IHT), which is a UK-side test, and Portuguese Stamp Duty (Imposto do Selo), which applies only to assets situated in Portugal.

UK inheritance tax in Portugal: The short answer

UK inheritance tax travels with a British expat's residence history even after a relocation to Portugal. The test changed on 6 April 2025, when the 2025 UK inheritance tax reforms replaced domicile with a residence-based rule.

The general test for "long-term UK resident" status is at least ten UK-resident tax years in the twenty immediately preceding the relevant tax year, subject to the post-departure rules and applicable exceptions. That status carries UK IHT liability on worldwide assets no matter where the person lives now.

A Portuguese residence permit, a Portuguese address or Portuguese tax residency does not override this test. A Portuguese address does not end UK tax residence. Once UK residence has ended, consecutive non-UK-resident tax years determine when the applicable tail ends.

Why residence history, assets and family circumstances matter

Three things decide where a British expat actually stands:

• Residence years: how many of the past 20 tax years were spent UK resident, which is what the long-term UK resident test counts
• Asset situs: where each asset is treated as located under the applicable tax law. Property, bank accounts, shares and other rights can follow different rules. A UK property generally stays within UK IHT scope regardless of the owner's address, while a Portuguese asset is judged by a different test again
• Beneficiaries: who inherits. The UK and Portuguese systems do not treat spouses and direct descendants identically

How UK inheritance tax works

UK inheritance tax still works as a charge on an estate above fixed thresholds, at a fixed standard rate. Only the eligibility test around it changed in 2025: the 2025 reform sits on top of the existing charge without replacing it.

Nil-Rate Bands and the standard rate

The standard Nil-Rate Band is £325,000. An estate may qualify for an additional Residence Nil-Rate Band of up to £175,000 when an eligible home passes to direct descendants, subject to the inherited value and other conditions. It tapers by £1 for every £2 of estate value above £2 million.

The standard IHT rate is 40%. A reduced 36% rate can apply to qualifying parts of an estate where the charitable-giving test is met, calculated using the relevant net or baseline amount. A surviving spouse or civil partner can also inherit any unused percentage of the first spouse's Nil-Rate Band and Residence Nil-Rate Band, which can effectively double both allowances on the second death.

GOV.UK published a policy paper on 26 November 2025 pushing the freeze on all three figures out by a year. The Nil-Rate Band, the Residence Nil-Rate Band and the £2 million taper point are now fixed through the 2030-31 tax year, to April 2031.

Residence-based scope from 6 April 2025

6 April 2025 is the date domicile stopped determining UK inheritance tax on deaths and lifetime transfers. The long-term UK resident (LTR) test took over.

Under section 6A of the Inheritance Tax Act 1984, inserted by the Finance Act 2025, 10 years of UK tax residence out of the previous 20 is enough to bring worldwide assets into scope (HMRC Inheritance Tax Manual IHTM47020). The test applies to both a final death estate and to certain lifetime transfers made within it, not only to the estate left behind at death. UK-situated assets generally remain within UK IHT scope either way, subject to excluded-property rules, exemptions and reliefs.

Residence, domicile and citizenship are not the same test

A Golden Visa changes someone's Portuguese immigration status without touching their UK inheritance tax position, because that position runs on UK tax-residence history, a completely separate test.

The same split works in reverse: Portuguese immigration residence does not make someone a Portuguese tax resident either, since Portuguese tax law decides that question on its own terms.

Domicile is not entirely gone from the picture; it still governs deaths and transfers before 6 April 2025, and it keeps some relevance in treaty contexts (HMRC IHTM47001).

The pre-2025 regime relied on a "deemed domicile" concept, under which long UK residence could make someone UK-domiciled for IHT purposes even without a formal change of domicile; the long-term UK resident test replaced that concept with a cleaner, purely residence-based count. After 6 April 2025, residence history is the test that counts.

What UK inheritance tax means for expats in Portugal

How long someone lived in the UK before leaving decides exposure under the long-term UK resident test; time spent in Portugal doesn't count toward it. The test is backward-looking by design, and a move abroad does not erase the years already counted. That single point is where most confusion starts, because it runs against the instinct that a new address should settle the question.

The "tail" after you leave the UK

Becoming non-UK resident does not end UK inheritance tax exposure immediately. HMRC's own manual sets out a stepped tail, scaled to how many of the previous 20 tax years were spent UK resident (IHTM47020, with worked Examples 1 to 6).

The table below summarises the general post-departure rules. Return to UK residence and transitional provisions can alter the result. Check the full tax-year history; split-year treatment still counts as a UK-resident year for IHT.

• 10 to 13 UK-resident tax years: three consecutive non-UK-resident tax years (the minimum)
• 14 UK-resident tax years: four consecutive non-UK-resident tax years
• 15 UK-resident tax years: five consecutive non-UK-resident tax years
• 16 UK-resident tax years: six consecutive non-UK-resident tax years
• 17 UK-resident tax years: seven consecutive non-UK-resident tax years
• 18 UK-resident tax years: eight consecutive non-UK-resident tax years
• 19 UK-resident tax years: nine consecutive non-UK-resident tax years
• 20 UK-resident tax years: ten consecutive non-UK-resident tax years (the maximum)

After ten consecutive non-UK-resident tax years, the test resets in the following tax year, including on a return to the UK. This is separate from the shorter tail that may apply. Someone who left the UK after 20 UK-resident tax years is tracking the full ten-year tail; someone who left after 11 or 12 is tracking the three-year minimum. Either way, the clock only starts once UK residence actually ends, not once a Portuguese address is established.

UK property and other UK-situated assets

UK-situated assets generally remain within UK IHT scope even when the owner is no longer a long-term UK resident, subject to excluded-property rules, exemptions and reliefs. UK land and buildings are an important example. Living in Portugal does not change that scope on its own.

This is a separate rule from the long-term UK resident test: it turns on where the asset is treated as located, not on the owner's residence history, so it can still apply to someone who left the UK decades ago and has no remaining UK tax residence at all. Being within scope is not the same as tax being payable, since exemptions and reliefs are applied afterwards.

Non-UK assets: When Portuguese and overseas holdings come into scope

A Portuguese property or other overseas asset is generally within UK IHT scope while its owner is still a long-term UK resident, or still inside the post-departure tail.

Overseas assets owned outright at death are generally outside UK IHT scope once the individual is no longer a long-term UK resident, including under the applicable tail. Lifetime gifts and trusts need separate review; ending long-term UK resident status does not erase every earlier taxable transfer. Portuguese assets still answer to Portugal's own rules throughout.

A Portuguese home bought after moving to Portugal can still count as a non-UK asset inside the UK estate for years, simply because the owner's UK residence history has not yet aged out of scope.

NHR and IFICI do not shield against UK inheritance tax

NHR and IFICI are income-tax incentives, and neither one touches UK inheritance tax.

Portugal's current IFICI tax regime is the narrower scheme that replaced the now-closed NHR regime, with its own rules for Portuguese income tax specifically: a 20% flat rate on qualifying income for a 10-year period, under its own eligibility criteria. Eligibility and tax treatment depend on individual circumstances and current legislation, which may change.

None of that reaches UK inheritance tax. Whatever a person's NHR or IFICI status, their UK IHT position is decided separately, on the UK side, by the long-term UK resident test. The two regimes answer different questions: one is about what Portugal charges on income now, the other is about what the UK charges on an estate later.

Portugal inheritance tax and Stamp Duty

Portugal abolished inheritance tax in 2004 and replaced it with Stamp Duty rules, which apply only to Portuguese-situated assets passing to a non-exempt heir. A British expat still carries UK inheritance tax exposure alongside Portuguese Stamp Duty. The two run on separate rules, set out above, and neither replaces the other. The table below sets the two regimes side by side.

Portuguese-situs assets only

Stamp Duty only reaches Portuguese-situated assets, such as Portuguese property. A worldwide estate is not what is being taxed here. A British expat's UK assets sit entirely outside this regime, just as Portuguese assets fall outside UK inheritance tax once long-term UK resident status and the tail have both lapsed.

Close-family exemptions and the rate for everyone else

Portuguese Stamp Duty on an inheritance depends on who inherits:

• Spouses, qualifying de facto partners (unidos de facto), descendants and ascendants: exempt from the 10% charge under Article 6(1)(e) of the Stamp Duty Code
• Everyone else (siblings, unrelated beneficiaries): a flat 10% (verba 1.2 of the Tabela Geral do Imposto do Selo)

Confirm how any UK partnership is recognised for the Portuguese exemption. A UK civil partnership does not automatically qualify, and it does not automatically fail to qualify either; the recognition question is one for a Portuguese adviser.

There is no 0.8% add-on on inheritance: that additional charge (verba 1.1) is confirmed, directly against Autoridade Tributária e Aduaneira's own Tabela Geral and its FAQ 00031, to apply only to lifetime gifts of Portuguese real estate, not to transfers on death. A non-exempt beneficiary inheriting Portuguese real estate generally pays 10% Stamp Duty; the separate 0.8% property-gift charge does not apply to inheritance.

Portuguese Stamp Duty should not be read in isolation. A Golden Visa, NHR or IFICI status changes nothing about UK inheritance tax exposure, so the two systems need checking side by side, not one at a time.

Gifts

A lifetime gift of Portuguese real estate generally attracts 10% Stamp Duty under verba 1.2 plus 0.8% under verba 1.1. That combined 10.8% never applies to inheritance.

Spouses, qualifying de facto partners, descendants and ascendants are exempt from the 10% charge, but the 0.8% charge generally remains. Other gifts require their own exemption and asset-scope checks. Gifting anything other than real estate keeps the gratuitous-acquisition rate at 10% alone.

Is there a UK-Portugal tax treaty for inheritance tax?

The UK-Portugal double taxation convention does not cover inheritance tax. It was signed on 15 September 2025 and entered into force on 29 December 2025, with effective dates from January 2026 staggered by tax type, but its coverage stops at income and capital gains (HMRC Double Taxation Relief Manual DT15600).

Inheritance and estate tax sit outside every UK-Portugal treaty, past or present. Where the same asset faces both UK inheritance tax and Portuguese Stamp Duty, UK unilateral relief may be available where qualifying overseas tax and UK IHT apply to the same assets, subject to the statutory conditions and limits. Have the claim assessed using the asset valuations and evidence of foreign tax paid.

Pensions and UK inheritance tax: QROPS and beneficiaries

From 6 April 2027, most unused UK defined-contribution pension funds and death benefits move inside the UK inheritance tax estate.

That change is law already: the Finance Act 2026 received Royal Assent on 18 March 2026, delivering a change first announced at the October 2024 Budget.

For deaths before 6 April 2027, most unused pensions and death benefits pass to beneficiaries free of inheritance tax, which is the position many expats still assume applies going forward. Reporting and paying the tax on these funds falls to personal representatives, who can require pension administrators to withhold up to 50% of benefits for as long as 15 months to cover it. A withholding notice does not extend the normal IHT payment deadline. Death-in-service benefits and charity lump-sum death benefits sit outside this change entirely.

For deaths on or after 6 April 2027, scheme location and the member's long-term UK residence status both matter. Relevant UK-established schemes can be within IHT scope even for a non-long-term UK resident; overseas-established schemes are treated differently. A QROPS transfer does not automatically remove exposure. Obtain a scheme-specific assessment before making any transfer decision.

Portugal Pathways' guide to QROPS and UK pension transfer rules sets out the Overseas Transfer Charge and scheme-eligibility details for UK nationals in Portugal, and that is its own regulated question, separate from the residence-based IHT question this guide answers. Pension and estate planning sit closer together than many expats assume, which is a reason to review both at the same time, before any transfer or drawdown decision, not after it.

How to plan for UK inheritance tax as an expat in Portugal

Treat this as the opening questions for a conversation with regulated professionals, not as a substitute for individual advice or a calculation of anyone's actual tax position.

Build a residence and asset timeline

Every other step in this checklist depends on getting this timeline right first, since both the UK test and the Portuguese Stamp Duty test turn on facts that are easy to misremember years later.

1. Set out each tax year of UK residence against the 20-year look-back the long-term UK resident test applies.
2. Sort assets by where they sit: UK, Portugal or elsewhere.
3. Record the date any Portuguese residence permit began, including a Golden Visa, and separately the date Portuguese tax residency began.

Review wills and beneficiaries across both jurisdictions

A timeline only shows what is at stake; a will decides who receives it, so the two exercises need to be checked together, not treated as separate paperwork.

1. Ask a cross-border succession lawyer to review all wills and any choice-of-law clause together, checking their scope and how they interact. Under the EU Succession Regulation (650/2012), habitual residence at death generally determines the law governing the succession as a whole, subject to exceptions.
2. Confirm exactly who is named as a beneficiary in each document.
3. Ask whether a valid nationality-based choice of law under Article 22 would change the applicable law, and what it would mean in practice. The Court of Justice confirmed in Case C-21/22 that this choice is open to non-EU nationals, provided it is the law of a nationality the person actually holds. For a British national, the lawyer should identify the relevant UK legal system and explain any forced-heirship ("legítima") consequences. A choice of succession law does not itself choose the applicable inheritance-tax system.

Coordinate professionals across jurisdictions

Use appropriately qualified professionals with expertise in the relevant UK and Portuguese tax and succession rules. Confirm who is responsible for each issue and how their advice will be co-ordinated. This step comes last because it is where the first two steps' findings actually get acted on.

1. Bring in a UK tax or estate adviser before any transfer, gift or pension decision, not after.
2. Bring in a professional covering the Portuguese rules at the same time, not as an afterthought.
3. Use Portugal Pathways' tax and financial planning service to co-ordinate introductions between the two; Portugal Pathways' role is introductions and co-ordination, not regulated advice. Introductions and partner arrangements may generate fees or commissions, which Portugal Pathways discloses.

Common mistakes

The same handful of errors keep turning up across UK inheritance tax guidance for British expats in Portugal:

• Assuming Portuguese residence alone ends UK inheritance tax exposure. It does not; exposure runs on UK tax-residence history, not current address, and can persist for years after the move.
• Believing a UK-Portugal treaty removes double taxation on an estate. No UK-Portugal treaty, current or previous, covers inheritance or estate tax. UK unilateral relief may be available instead, subject to conditions and limits, and is claimed through the UK estate's own reporting process.
• Treating the pre-2025 domicile test as still controlling. The long-term UK resident test replaced it for deaths and transfers from 6 April 2025, so advice or planning built on the old domicile rules needs revisiting.
• Expecting NHR or IFICI to affect UK inheritance tax. Both are Portuguese income-tax regimes with no bearing on UK IHT, and neither one shortens the long-term UK resident test's look-back period.
• Putting off a QROPS or pension decision until after the move. It needs its own regulated review, separate from the residence-based IHT question, and becomes harder to unwind once a transfer has already gone through.
• Assuming a Golden Visa's low physical-presence requirement says anything about UK IHT. The two are unconnected: one is a Portuguese immigration condition, the other a UK tax-residence count, and meeting one says nothing about the other.

Illustrative scenario

This scenario is illustrative only and does not state a tax outcome for any individual. It assumes the general rules apply, that no transitional exception applies and that the individual remains non-UK resident throughout.

Picture a British national who spent 15 of the last 20 tax years UK resident before moving, and who is now a Portuguese tax resident holding a UK property and a Portuguese apartment. Fifteen UK-resident tax years meet the long-term UK resident test, and on the stepped tail above that means five consecutive non-UK-resident tax years once they have left the UK.

The UK property does not move: it generally stays within UK inheritance tax scope regardless of where its owner lives, subject to excluded-property rules, exemptions and reliefs.

The Portuguese apartment is judged twice, by two different tests. On the UK side, it counts as a non-UK asset generally within scope for as long as the person remains a long-term UK resident or inside the five-year tail. On the Portuguese side, separately, it would carry Portuguese Stamp Duty if inherited by a non-exempt heir, at the flat 10% rate, since it is Portuguese-situated property; a spouse, qualifying de facto partner, descendant or ascendant beneficiary would be exempt from that charge, while anyone else would not.

Neither system answers the question alone, which is why the residence-and-asset timeline in the checklist above is the right starting point for a real review.

Frequently asked questions about UK inheritance tax for expats in Portugal

Do I still pay UK inheritance tax if I live in Portugal?

UK inheritance tax can still apply after a move to Portugal: since 6 April 2025, the test turns on residence history, not current address. A long-term UK resident stays exposed on worldwide assets, with the tail running for years. Succession planning needs both systems in view.

Is there a UK-Portugal tax treaty for inheritance tax?

The UK-Portugal double taxation convention does not cover inheritance tax. In force since December 2025, it covers income and capital gains only, and no UK-Portugal treaty has ever covered inheritance or estate tax. UK unilateral relief may be available instead, subject to conditions and limits.

Does a Portuguese Golden Visa reduce my UK inheritance tax?

A Portuguese Golden Visa does not itself reduce UK inheritance-tax exposure; immigration status and the UK IHT tests are separate questions. UK inheritance tax runs on UK tax-residence history. NHR and IFICI, Portugal's own income-tax regimes, make no difference to it either.

Will my UK pension be subject to inheritance tax?

From 6 April 2027, most unused UK defined-contribution pension funds and death benefits fall inside the UK inheritance tax estate, under the Finance Act 2026. A QROPS transfer does not remove this exposure automatically and needs a separate regulated review.

Next steps

Estate and tax planning across the UK and Portugal needs appropriately qualified professionals covering both systems and working together, because the two answer different questions. Confirm who is responsible for each issue and how their advice will be co-ordinated.

The UK's residence-based test, Portugal's Stamp Duty regime and the incoming pension rules each raise their own question, and they hold together better reviewed as a set than piece by piece.

Start with a residence-and-asset timeline, a review of your wills and confirmation of the professional expertise needed in both jurisdictions. Portugal Pathways' part in that process is introductions and co-ordination, not regulated advice itself.

Arrange a private consultation

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Portugal Pathways is an integrated information, introductions and advisory platform. It provides general information and introductions and does not offer regulated investment, tax, legal or immigration advice. The UK inheritance tax rules, Portuguese Stamp Duty regime and pension rules described here reflect HMRC, GOV.UK and Portuguese Tax and Customs Authority guidance reviewed as of October 2026 and are subject to change. Tax residency is determined separately from immigration residency according to Portuguese tax law and individual circumstances. Readers should obtain independent professional advice before making decisions about residency, tax residency, estate planning, pensions or succession planning.

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Last reviewed: 8 October 2026

Sources:

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• Inheritance Tax Act 1984, section 6A (long-term UK resident test), inserted by Finance Act 2025, section 44.
• HMRC Inheritance Tax Manual, IHTM47020 (long-term UK residence test, stepped tail table and Examples 1 to 6) and IHTM47001 (introduction; when domicile remains relevant).
• HMRC Double Taxation Relief Manual, DT15600, and HMRC's Portugal tax-treaties guidance (UK-Portugal convention signed 15 September 2025, in force from 29 December 2025 with staggered effective dates from January 2026 by tax type; income and capital gains only).
• GOV.UK policy paper, 26 November 2025 (extending the Nil-Rate Band, Residence Nil-Rate Band and Residence Nil-Rate Band taper freeze through the 2030-31 tax year).
• Finance Act 2026: pension IHT changes for deaths on or after 6 April 2027, including IHTA 1984 section 150A (notional pension property), section 226A (withholding) and section 226B (direct payment). See also HMRC's technical note on Inheritance Tax on pensions (May 2026), especially §3.5 on scheme location.
• Regulation (EU) No 650/2012 (EU Succession Regulation, "Brussels IV"), Articles 21 to 23 and 36 (habitual residence as the general connecting factor, choice of law, scope, and states with multiple legal systems), and Court of Justice of the European Union, Case C-21/22, OP v Notariusz Justyna Gawlica (12 October 2023): confirms Article 22 lets "any person," not only EU citizens, choose the law of a nationality they hold to govern the succession as a whole. No UK-Portugal bilateral succession convention was found that would displace this under Article 75, unlike the Poland-Ukraine convention at issue in that case.
• Autoridade Tributária e Aduaneira, Tabela Geral do Imposto do Selo (verba 1.2: 10% flat rate on gratuitous acquisitions, including inheritance; verba 1.1: separate 0.8% charge on real estate, confirmed to apply only to lifetime gifts, not inheritance) and AT FAQ 00031.