You have made the big move to Portugal – congratulations! You have sorted out your NIF, found your dream villa (or at least a decent apartment with a pool), and you know where to get the best pastel de nata within a 5km radius. But there is one crucial topic that most expats keep putting off: what happens to everything you have built when you are no longer around?

It is not the cheeriest subject, we know. But getting your wills and estate planning right as a UK expat in Portugal can save your family an enormous amount of stress, tax, and legal headaches. And the rules may be very different from what you are used to back in the UK.

Why UK Wills Do Not Always Work in Portugal

If you made a will in England or Wales before moving abroad, you might assume it covers everything. Unfortunately, it is not quite that simple. Portuguese law has its own rules about how assets located in Portugal are distributed, and a UK will may not be recognised – or may only partially apply – when it comes to Portuguese property and bank accounts.

Under Portuguese succession law, there is a concept called legitimate heirs (herdeiros legitimarios). This means that your spouse, children, and in some cases parents, are entitled to a guaranteed share of your estate – regardless of what your will says. This is a major difference from the UK, where you generally have full freedom to leave your assets to whomever you choose.

EU Succession Regulation (Brussels IV)

The good news is that under the EU Succession Regulation (commonly known as Brussels IV), you can elect for the law of your nationality to apply to your entire estate. As a British citizen living in Portugal, this means you can choose for English or Scottish law to govern your succession, giving you the testamentary freedom you are accustomed to.

However, this election must be explicitly stated in your will. If you do not make this election, Portuguese forced heirship rules will apply by default. This is one of the most important reasons to review – or create – a proper will once you have moved to Portugal.

Do You Need a Portuguese Will?

In most cases, we recommend that UK expats in Portugal have two wills: one covering UK assets (property, pensions, investments held in the UK) and one covering Portuguese assets (property, bank accounts, and other assets held in Portugal). Having a Portuguese will drafted by a local lawyer ensures it complies with Portuguese formalities and can be acted upon quickly when needed.

It is essential that the two wills do not accidentally revoke each other. A common mistake is for a new Portuguese will to contain a blanket revocation clause that inadvertently cancels the UK will. Always use lawyers in both jurisdictions who are experienced in cross-border estate planning.

Stamp Duty on Inheritance in Portugal

Portugal does not have a traditional inheritance tax. Instead, it levies Imposto do Selo (Stamp Duty) at 10% on Portuguese assets inherited by beneficiaries. The important exception is that spouses, children, grandchildren, and parents are completely exempt from this charge. So if your estate passes to your immediate family, there should be no Portuguese inheritance tax to pay.

For other beneficiaries – siblings, nieces, nephews, friends, or unmarried partners – the 10% Stamp Duty applies to the value of Portuguese assets. This makes it especially important for unmarried couples living in Portugal to plan carefully.

UK Inheritance Tax Still Applies

Here is the part that catches many expats off guard: even if you live in Portugal, you may still be liable for UK Inheritance Tax (IHT). The UK taxes based on domicile, not residence. If you are considered UK-domiciled – which many expats are, even years after leaving – your worldwide assets could be subject to IHT at 40% above the nil-rate band (currently GBP 325,000, or up to GBP 500,000 with the residence nil-rate band).

Changing your domicile of origin is possible but requires clear, permanent intent to remain in your new country indefinitely. Simply living in Portugal for a few years is not enough – HMRC will look at factors like whether you have maintained UK ties, where your family lives, and whether you have made provisions to be buried abroad. It is a high bar, and professional advice is essential.

Powers of Attorney

Estate planning is not just about what happens after death. It is equally important to plan for what happens if you lose mental capacity during your lifetime. In Portugal, you can set up a Procuracao (power of attorney) to allow a trusted person to manage your affairs.

If you hold assets in both the UK and Portugal, you should consider having Lasting Powers of Attorney (LPAs) registered in England and Wales, as well as a Portuguese power of attorney. Without these documents in place, your family could face lengthy and expensive court proceedings to manage your finances or make healthcare decisions on your behalf.

Practical Steps to Take Now

First, review any existing UK wills and check whether they are still fit for purpose now that you live abroad. Second, consult a Portuguese lawyer (advogado) to draft a will covering your Portuguese assets, making sure to include the Brussels IV nationality election if you want English law to apply. Third, coordinate between your UK and Portuguese advisers to ensure both wills work together without conflict.

Consider setting up powers of attorney in both countries. Review your life insurance, pension nominations, and any trust arrangements to make sure they align with your overall estate plan. And finally, keep your documents somewhere accessible – there is no point having a perfect estate plan if nobody can find it when it matters.

How Arthur Browns Can Help

At Arthur Browns, we work with UK expats in Portugal every day to make sure their financial planning covers all the bases – including the ones people prefer not to think about. We can coordinate with trusted legal professionals in both the UK and Portugal to ensure your estate plan is robust, tax-efficient, and gives you peace of mind.

If you would like to review your current arrangements or start putting a proper plan in place, get in touch with us for a no-obligation conversation. Your future self (and your family) will thank you.

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