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Inheritance tax in Portugal for non-residents: Your guide

22 January 2025

Understanding inheritance tax laws in Portugal can be complex, not least for non-residents. If you’re a UK citizen receiving inheritance from Portugal or planning to pass on wealth to your loved ones, it’s essential to know how Portuguese inheritance tax may affect your situation.

To help you navigate this topic, we’ve provided key insights on Portuguese inheritance tax rules and their implications for non-residents. Be mindful that tax laws are often intricate and can change over time. This guide serves as a helpful starting point, but it’s highly recommended that you consult a qualified tax professional to ensure your decisions are aligned with your circumstances.

What is inheritance tax?

Inheritance tax, referred to as IHT in the UK, is a tax on the assets – such as property, possessions, savings, investments, and pensions – passed down to someone after a person’s death. Many countries have inheritance tax systems; however, the rules, rates, and reliefs differ significantly between them.

Portugal doesn’t charge a traditional inheritance tax. Instead, it levies a stamp duty called Imposto do Selo on assets located within the country. This is set at a flat rate, eliminating the chance of regional variations.

Portugal’s inheritance laws include forced heirship. This requires a portion of your estate to be reserved for close family members, such as spouses and children, regardless of the provisions of a will. However, as a non-resident, you can elect the succession law of your home country to govern your estate, potentially avoiding forced heirship rules.1

Who needs to pay Portuguese inheritance tax?

According to Portuguese inheritance laws, the deceased’s estate is taxed in line with the laws of the country they are permanently resident in. Therefore, if they live in Portugal permanently, as the beneficiary, you may be required to pay stamp duty for assets inherited that are held there – even if you live in another country, including the UK.1

Inheritance laws vary between countries, making it essential to get professional tax advice to check which rules apply to you, especially if you reside in or have property in multiple countries.

What are the inheritance tax rates in Portugal?

Inheritance tax was abolished in Portugal in 2004. Since then, the government has charged stamp duty at a flat rate of 10% on the value of inherited assets located within the country.1

In contrast, countries like Spain and France have traditional inheritance tax systems that use progressive rates based on the value of the inheritance and/or the beneficiary’s relationship to the deceased. Meanwhile, in the UK, a flat rate of inheritance tax is applied to estates valued over a certain sum.

What’s taxable and what’s exempt?

Assets subject to Portuguese stamp duty

Only assets located in Portugal are subject to Portuguese stamp duty. These include:

  • Real estate: Residential and commercial properties
  • Movable assets: Vehicles (cars, motorcycles, boats), artwork, and personal belongings
  • Bank accounts: Savings and checking accounts held in Portuguese banks
  • Business interests: Ownership stakes in companies operating in Portugal
  • Intellectual property: Rights such as copyrights and patents

Exemptions from Portuguese Stamp Duty

Your inherited assets located in Portugal will only be exempt from stamp duty if you are a close relative of the deceased. Exemptions apply if you are:

  • A descendant (child or grandchild)
  • A spouse or life partner
  • An ascendant (parent or grandparent)1

Calculating your Portuguese inheritance tax liability

Follow these three simple steps to calculate your stamp duty liability if it applies to you:

  1. Subtract the liabilities (debts) from the value of the taxable assets. The taxable value is the market value of the assets at the time of the owner’s death or the value registered for tax purposes.
  2. The resulting taxable net asset is distributed between the beneficiaries according to Portuguese inheritance laws and the deceased’s will.
  3. The 10% stamp duty rate is applied to the amount of inheritance each eligible beneficiary receives.

Paying your inheritance tax in Portugal

Each beneficiary or their representatives must submit a declaration to the Portuguese Tax and Customs Authority (Autoridade Tributária e Aduaneira) within three months of your death. This should outline all assets located in Portugal that are part of the inheritance.

Along with the declaration, each beneficiary must provide:

  • Death certificate
  • A comprehensive list of the deceased’s assets in Portugal
  • Civil identification document and tax identification number of the deceased
  • Civil identification document and tax identification number of the beneficiaries
  • Will or deed of gift or justification.1

The Autoridade Tributária e Aduaneira will assess the stamp duty based on the declared assets. Payment is due within the same three-month period. Failure to do so may result in penalties.

Lumon: Providing peace of mind for you and your loved ones

At Lumon, we’re here to make transferring your funds as straightforward as possible, allowing you to focus on what matters most, whether you’re receiving or sending money abroad.

Our service is designed around your needs, offering a tailored approach and competitive exchange rates. Your dedicated currency specialist to guide you through your options and provide market insights, helping you get great value from your transfer.

  • E-wallet: This allows you to “hold” funds in the currency the inheritance is received in, so you can wait for the rate to improve.
  • Experienced personal account manager: Work with your personal account manager to tailor a currency strategy that insulates the value of your inheritance transfers against currency risk and ensures they are executed seamlessly.
  • Forward contracts: Our forward contract options allow you to secure an exchange rate before the inheritance is released or fix the price of a foreign property sale as part of an inheritance. This gives you the certainty of knowing what the value will be in your desired currency when the time comes to transact.
  • Lumon EU bank accounts: Our EU bank accounts enable the direct receipt of funds from foreign solicitors, allowing us to receive your foreign currency inheritance without you holding a bank account in that country or currency.
  • Dedicated Lumon staff in Portugal: Our dedicated Lumon staff in Portugal specialise in supporting your international payment arrangements with solicitors, lawyers and notary offices.

FAQs about Portuguese inheritance tax

What is the inheritance system in Portugal?

Portugal charges a stamp duty, known as Imposto do Selo, at a flat rate of 10% on the value of inherited assets located within Portugal. However, certain close relatives – including spouses, children, grandchildren, parents, and grandparents – are exempt.

Which European countries have no inheritance tax?

The following European countries don’t charge inheritance tax:

  • Austria
  • Cyprus
  • Czech Republic
  • Estonia
  • Liechtenstein
  • Malta
  • Norway
  • Romania
  • Slovakia
  • Sweden

Sources used: 

1Gov.pt – Tax liability on the transfer of property through inheritance

Sources last checked on date: 08/01/2025

The information provided in this material is accurate to the best of our knowledge at the time of writing 08/01/2025, but it is subject to change. The content is for informational purposes only and does not constitute tax advice. It is essential that individuals seek advice from professional services regarding tax matters. We do not accept liability for any errors or outdated information, and individuals should not rely on the information presented without consulting an expert.