Capital gains tax in Portugal for expats works very differently from the UK system most British arrivals know. Once you are Portuguese tax resident, Portugal generally taxes gains on your worldwide assets, including shares, funds and property you bought long before you moved, and it measures the gain from what you originally paid, not from what the asset was worth when you arrived. Gains on shares and funds are usually taxed at a flat 28%, gains on property are taxed on 50% of the gain at progressive rates of up to 48%, and UK wrappers and reliefs such as ISAs and UK main residence relief do not carry across. This guide explains how Portuguese capital gains tax works for residents, how UK assets are treated under the new UK to Portugal double taxation convention, the reliefs for your main home, losses and crypto-assets, how the IFICI regime fits in, and why the timing of a sale around your move matters. It is general information, not personal tax advice. Portuguese figures are for the 2026 tax year (Portugal's tax year is the calendar year) and UK figures for 2026 to 2027; recheck them before you rely on them.
Portuguese tax residents pay personal income tax (IRS) on worldwide income and gains. Capital gains (mais-valias) fall into category G, and the treatment depends on the type of asset. Under article 72 of the IRS Code, the net balance of gains and losses on shares, other securities, fund units, derivatives and crypto-assets is taxed at a special flat rate of 28%. Residents can instead opt to aggregate this income with their other income (englobamento) and be taxed at the progressive rates, which can help where total income is low; the option generally applies to all income of the types covered for that year, so it needs to be modelled before it is chosen. Under article 72, the positive net balance of gains on securities held for less than 365 days must be aggregated where taxable income, including that balance, reaches the top income tax bracket, which is 86,634 euros for 2026. Gains on property work differently: under article 43, only 50% of the net gain on real estate is included in taxable income, and it is then taxed at the progressive rates. For 2026, after the 2026 State Budget (Lei 73-A/2025), those rates run from 12.5% up to 48% on taxable income above 86,634 euros, and a solidarity surcharge may also apply, at 2.5% on the slice of taxable income between 80,000 and 250,000 euros and 5% on the slice above 250,000 euros. Gains on listed securities and units in open-ended funds held for more than two years can qualify for a partial exclusion of the net gain under changes introduced by Lei 31/2024: 10% for holdings of more than two but less than five years, 20% for five to less than eight years, and 30% for eight years or more; the percentage depends on the holding period of each qualifying disposal within the annual balance, it is not automatic for every fund or shareholding, the asset's classification matters, its interaction with aggregation should be confirmed, and how it applies to securities held through foreign platforms has been debated, so it should be confirmed for your own holdings. There is no annual tax-free allowance for gains equivalent to the UK annual exempt amount. Our guide to tax in Portugal for expats covers residency, IFICI and the wider income tax position.
Portugal does not generally give you a fresh base cost when you become resident. The gain is broadly the sale value less the acquisition value, with documented acquisition and sale costs and, for property, qualifying improvement costs incurred in the last 12 years. If you bought shares for 100,000 euros ten years ago, they are worth 250,000 euros when you move, and you sell them a year after arriving for 260,000 euros, the Portuguese gain, ignoring costs and any partial exclusion, is broadly 160,000 euros, not the 10,000 euros of growth since you arrived. For property and certain shareholdings held for more than 24 months, the acquisition value is increased by official monetary correction coefficients published each year, which can reduce the taxable gain on older purchases, subject to the statutory conditions; it is not a step-up to market value. Assets bought in sterling add a further layer, because the values have to be expressed in euros, so exchange rate movements can increase or reduce the Portuguese gain; the conversion method should be checked against current guidance from the Portuguese tax authority (AT) for your situation. The practical lesson is that gains built up during your UK years can be taxed in Portugal if you sell after you move.
Unlike Spain, Portugal can treat you as resident for only part of a year, although this is not an automatic UK-style split-year regime. Under article 16 of the IRS Code, you are generally resident if you spend more than 183 days in Portugal in any 12-month period starting or ending in the tax year, or have a home there in circumstances suggesting an intention to keep it as your habitual residence. Where those conditions are met, article 16(3) treats residence as starting from the first day of your stay in Portugal, with different rules if you were resident in the previous year, so the precise start date needs a facts-based analysis. A gain realised before your Portuguese residence starts is generally outside Portuguese tax, while the same gain realised a few weeks later may not be. On the UK side, a gain realised while you are still UK resident is taxed under UK rules, at 18% or 24% for most individual gains in 2026 to 2027 depending on your taxable income, after the 3,000 pound annual exempt amount, and UK split-year treatment may apply in the year you leave. Selling investments can create immediate tax, market, cost, reporting and suitability consequences, and should not be undertaken solely to pursue a particular tax result: any sale brings forward a definite UK tax bill, investments can fall as well as rise, and any benefit depends on how long you will stay in Portugal and what you eventually sell. If you had sole UK residence for all or part of at least four of the seven tax years before the year you left and might return to the UK after a period of non-residence of five years or less, the UK temporary non-residence rules can bring certain gains realised while abroad back into UK tax in the year you return; our guide to the Statutory Residence Test and our guide to returning to the UK explain how. These questions are easier to consider with professional advice before the residency date than after it.
A short, complimentary call with a cross-border planning specialist can clarify your options, with no obligation.
A new UK to Portugal double taxation convention was signed in London on 15 September 2025 and entered into force on 29 December 2025. It has effect in Portugal for taxable periods beginning on or after 1 January 2026, and in the UK for income tax and capital gains tax from 6 April 2026, replacing the 1968 convention, which continues to apply to income arising before those dates. Under Article 13, gains on UK land and property, and on shares or comparable interests that at any time in the 365 days before the sale derived more than 50% of their value directly or indirectly from UK property, may be taxed in the UK as well as in Portugal. Gains on other assets, such as listed shares and investment funds, are taxable only in the country where the seller is resident, subject to the treaty's other provisions and your facts. For UK property, this generally means a UK property disposal return within 60 days of completion and UK tax on the UK gain, then Portuguese tax on the same sale, with relief for the UK tax by credit under Article 21, subject to its conditions and limited to the Portuguese tax attributable to that gain. The two calculations often differ: for many non-residents the UK charge on residential property can be based on growth since April 2015, with other calculation methods available in some cases under HMRC's rules, and UK private residence relief may reduce the UK gain, while Portugal measures its gain from the original purchase price, includes 50% of it and does not apply UK reliefs. Our guide to selling UK property as a non-resident covers the UK side. ISAs are a UK wrapper: Portugal does not provide an exemption equivalent to the UK ISA exemption, so income and gains arising inside an ISA may be taxable to a Portuguese resident under normal Portuguese rules and need to be reported.
Under article 10 of the IRS Code, a gain on selling your permanent main home (habitação própria e permanente) can be excluded from tax to the extent that the net proceeds, after repaying any loan used to buy it, are reinvested in another main home in Portugal or in another EU or EEA state that exchanges tax information, between 24 months before and 36 months after the sale. You must have had your tax domicile in the home sold for the 12 months before the sale, subject to limited exceptions, declare the intention to reinvest in that year's return, and use the new property as your main home within the time limits, or the relief can be withdrawn. A separate relief in article 10 can exclude the gain where you or your spouse or partner are retired or aged 65 or over and the net proceeds are invested within six months in qualifying pension or insurance products that pay out over at least 10 years, subject to detailed conditions. From 2026, Decreto-Lei 97/2026 added a temporary relief, for sales between 1 January 2026 and 31 December 2029, where net proceeds from selling other residential property are reinvested in Portuguese homes let for housing at capped rents, with strict conditions on letting within six months, at least 36 months of letting in the first five years and no sale within five years. Partial reinvestment gives a proportional relief. These are Portuguese reliefs with Portuguese definitions: a former home in the UK will not normally qualify, and reinvesting in a UK property does not meet the EU or EEA condition.
Gains and losses within category G are netted each year. Under article 55, a net loss on securities and similar assets can only be carried forward for the next five years where you opt for, or are required to use, aggregation, and losses on transactions with counterparties in listed low-tax jurisdictions are disregarded. Crypto-assets that are not securities are taxed at 28% on gains where they were held for less than 365 days, while gains on those held for 365 days or more are generally excluded under article 10, although the exclusion does not apply in some cases involving parties outside the EU or EEA or in states without a tax treaty or information exchange agreement with Portugal; ceasing to be Portuguese resident is treated as a disposal of crypto-assets for these rules. Certain income and gains from entities or structures in jurisdictions on Portugal's list of clearly more favourable tax regimes may be taxed at 35% under article 72 of the IRS Code, depending on the type of income and the rule that applies, as our guide to Portugal's tax haven blacklist explains, which can matter for some people moving from the UAE. People who qualify for the IFICI regime under article 58-A of the Tax Benefits Statute, sometimes called NHR 2.0, which is aimed at specific professional activities and is not a general exemption for investment gains, and register for it, may have certain foreign-source capital gains exempt for up to 10 years, subject to the IFICI conditions and the exclusion for listed jurisdictions; eligibility depends on the activity, not on being a retiree or investor, and many retirees and passive investors are unlikely to qualify. People still within the old NHR regime under transitional rules have different rules for some foreign gains, which need specific advice. Gifts and inheritances are not onerous disposals, so they generally fall outside capital gains tax, but they can attract Portuguese stamp duty, with exemptions for spouses, descendants and ascendants subject to conditions, as our guide to estate planning for Brits in Spain and Portugal explains.
People moving to Portugal often hear about the special regimes first, but most retirees and investors end up under the normal rules. Under those rules Portugal works from your original cost, and your residence can start from the day you arrive, so the date of a sale can matter as much as the amount. It makes sense to understand both the UK and Portuguese position before the move, although for some people the answer will be to make no changes at all.
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Portugal taxes the full gain from your original acquisition cost. Growth built up while you lived in the UK can be taxed in Portugal if you sell after becoming resident, so the timing of disposals around the move matters.
Portugal does not provide an exemption equivalent to the UK ISA exemption. Interest, dividends and gains arising inside an ISA may be taxable in Portugal once you are resident, and they need to be reported.
IFICI is aimed at specific professional activities and many retirees and passive investors are unlikely to qualify, and the old NHR regime is closed to new applicants. Without a special regime, foreign gains are taxed under the normal rules.
UK private residence relief and the UK 2015 rebasing for non-residents reduce the UK gain only. Portugal calculates its own gain from the original cost, so selling a former UK home can still produce Portuguese tax.
Non-residents selling UK property generally have to report to HMRC within 60 days of completion, in many cases even when no UK tax is due, so check HMRC's current rules and exceptions. The sale may also need to be reported on the Portuguese return, with any credit claimed.
Choosing englobamento can lower tax where income is modest, but it generally brings all income of the types covered into the progressive scale for that year. It is also the route that allows securities losses to be carried forward, so the choice should be modelled first.
A portfolio built for a UK resident can look quite different once Portuguese residence begins. An ISA has no equivalent exemption in Portugal, gains on securities are usually taxed at 28%, and a switch between holdings can be a taxable event. Whether any changes are appropriate depends on each person's objectives, attitude to risk, tax position and suitability, and often none are needed, but it is worth understanding the position as part of the move itself, rather than at the first Portuguese tax return.
Illustrative example only, not a real client. This example is simplified and fictional, applies 2026 Portuguese rates and 2026 to 2027 UK rates purely as stated assumptions, ignores currency movements, dealing costs and monetary correction, and is not a guarantee of any outcome. David plans to move to Portugal in spring 2027 and become Portuguese tax resident from his first day there. He has a UK general investment account of listed shares and funds bought ten years ago for the equivalent of 150,000 euros and now worth about 230,000 euros, an ISA, and a former rental flat in the UK. He assumed Portugal would only tax growth after he arrived, and planned to sell most of the portfolio in his first year to buy a home.
In a review with a regulated financial adviser, working alongside a Portuguese tax specialist, David learned that, on these assumptions, the whole 80,000 euro gain would be within the scope of Portuguese tax if he sold after his residence started. As simple arithmetic only, not a tax computation or an expected liability, and ignoring costs, currency, monetary correction, aggregation and other income, 28% of 80,000 euros is 22,400 euros. The partial exclusion percentage depends on the holding period of each qualifying disposal: if every holding were a qualifying listed security or open-ended fund unit held for eight years or more, the 30% exclusion would leave 56,000 euros and the arithmetic would give about 15,680 euros, but the exclusion may not apply to some or all of his holdings, and whether it applies to securities held on a UK platform needed specialist confirmation. The review then set out the UK and Portuguese consequences of selling some holdings before leaving the UK, using his annual exempt amount and paying UK capital gains tax at the rate set by his income position, of selling after the move, and of not selling at all, including crystallising UK tax early, dealing costs, currency risk and staying invested, and looked at how long he intended to stay and whether he might return to the UK within five years. It also flagged that his ISA would not receive an equivalent exemption in Portugal, and that a later sale of the UK flat would need a UK 60-day return and a Portuguese return with a credit for any UK tax.
The outcome is specific to these assumed figures and is not a tax calculation, forecast or recommendation for anyone else. David understood that the timing of his sales, not just the amount, would drive the tax, and that whether any changes to how his investments were held would be appropriate was a separate question, needing its own suitability assessment and tax advice. Advice in a case like this may equally conclude that no changes are suitable, and it cannot guarantee a tax treatment or investment outcome. Different facts, rates or timing could produce a different or worse result. This example is not a recommendation to sell, retain or restructure any investment; any action needs individual suitability, tax and legal advice.
Illustrative example, not a real client.
Clarity Global Wealth helps people moving to Portugal, or already living there, understand how capital gains tax will affect their investments and property before they act. That includes which assets carry gains Portugal would tax, the questions to raise about selling before or after the move, how UK property and ISAs are treated under the new treaty, and how the main home reliefs, losses, crypto rules and special regimes could apply to you. We can arrange a free introduction to regulated financial planning, so you can review your position with a regulated financial adviser before making changes to savings or investments, where advice is appropriate. Any charges for advice would be explained to you before you proceed. The value of investments can fall as well as rise, tax treatment depends on individual circumstances and can change, and advice may conclude that no changes are suitable. Clarity Global Wealth does not provide tax, legal or accounting advice. Filing Portuguese and UK returns is tax-compliance work, so where that is needed we coordinate with qualified tax specialists.
Related guides: Tax in Portugal for Expats in 2026, Portugal's Tax Haven Blacklist in 2026, Moving From the UK: The Statutory Residence Test, Selling a UK Property as a Non-Resident, Capital Gains Tax in Spain for Expats, Investing a Lump Sum as a British Expat and Returning to the UK After Years Abroad.
This guide is provided for general information only and reflects our understanding of the rules as at the date of publication. It is not personal financial, investment, pension or tax advice, and should not be relied upon as such. Rules and tax treatment can change and depend on your individual circumstances and country of residence. You should always seek regulated advice specific to your situation before taking action.
Net gains on shares, funds and other securities are generally taxed at a flat 28%, with an option to aggregate them with other income at progressive rates. Property gains are taxed on 50% of the gain at progressive rates from 12.5% to 48% for 2026, plus a solidarity rate on taxable income above 80,000 euros. Rates should be rechecked each year.
Generally yes, if you sell after becoming Portuguese tax resident. Portugal measures the gain from your original acquisition cost and does not give a step-up to market value on arrival, so growth built up while you lived in the UK can be taxed in Portugal. A sale made before your residence starts is generally outside Portuguese tax.
Generally not. Portugal does not provide an exemption equivalent to the UK ISA exemption, so interest, dividends and gains arising inside an ISA may be taxable to a Portuguese resident under normal Portuguese rules.
Both countries can. Under Article 13 of the 2025 UK to Portugal treaty the UK can tax gains on UK property, and a UK property disposal return is generally required within 60 days of completion. Portugal also taxes 50% of the gain at progressive rates and gives relief by credit for the UK tax, subject to the treaty's conditions and limited to the Portuguese tax on that gain.
Possibly not. A gain on your permanent main home can be excluded if the net proceeds are reinvested in another main home in Portugal or the EU or EEA between 24 months before and 36 months after the sale, and you had your tax domicile there for the previous 12 months. There is also a relief for those retired or aged 65 or over who reinvest in qualifying pension or insurance products.
Not in general. IFICI may exempt certain foreign-source capital gains for up to 10 years for people carrying on specific qualifying professional activities, except gains from listed low-tax jurisdictions. Many retirees and passive investors are unlikely to qualify, and their gains are then taxed under the normal rules.
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