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January 27, 2026 - News
Published on 29 December 2025, the new treaty replaces the 1968 agreement and took effect on 1 January 2026. This is a significant development for UK investors with Portuguese real estate or corporate holdings.
Key changes
• Indirect property transfers: Portugal can now tax shares where over 50% of their value derives from Portuguese real estate.
• Updated withholding tax rules: Modernised rules for dividends, interest, and royalties, including anti-abuse provisions.
• Transparency for trusts and estates: A “look-through” approach ensures proper tax alignment and recognition of tax credits between the UK and Portugal.
These changes may result in increased exposure to Portuguese capital gains taxation.
Who’s affected
• UK individuals holding Portuguese property via foreign entities (e.g., Delaware, Malta).
• UK companies with Portuguese subsidiaries owning property or development assets.
• UK trusts with direct or indirect Portuguese holdings.
For guidance on how the treaty may impact your investments in Portugal, please feel free to contact us.
