From January 2024, donations between spouses or civil partners, descendants and ascendants, up to the amount of €5,000.00 do not have to be declared for Stamp Tax purposes (which used to be €500.00 for values or goods).
Stamp Duty only applies to Portuguese assets (like real estate, cars, boats and shares registered in Portugal) rather than assets held in other countries. Some people may have to pay administration fees, particularly if the heirs are not Portuguese. That’s because there are translation costs and stamp costs on many of your non-Portuguese documents.
All other gratuitous transfers are assessed Stamp Duty at a flat rate of 10%.
There are several tax exemptions for those collecting an inheritance in Portugal, like if you inherit government pensions and allowances, small gifts, certain savings funds, life insurance if held in trust and trustees are not resident in Portugal, or if the policy itself is outside Portugal. Though tax may be liable in the country where the beneficiaries of the trust are resident (source: Blevins Franks).
A potential Stamp Duty exemption does not relieve the beneficiaries of the obligation to make the respective declaration of the assets transferred to the Finanças, until the end of the 3rd month following the death.
The death report is made through the delivery of Model 1 of the Stamp Tax and annexes I and II, relating to the identification of assets and type of heir, respectively. The forms can be printed directly from the AT website or you can request them from Finanças.
If someone is left a property in Portugal and sells it soon after the death of the person who left it to them, it’s possible they may find themselves liable for Capital Gains tax on the sale.
Occasionally, prior debts may reduce the overall value of the estate. However, Portugal has laws in place that protect people from inheriting debts left by the deceased.
You can find more information about inheritance law and the process of drawing up a Will for Portuguese assets in our bulletin N06 and about Capital Gains in our bulletin T07
You should always contact a competent financial advisor or seek advice from your relevant tax authority.
Disclaimer
afpop considers in good faith that all the information provided is true and accurate after having endeavoured to so confirm to the best of its ability. However, afpop is not qualified to render any technical advice, recommendation or information, nor is it under any legal duty to do so. Therefore, afpop declines any responsibility for possible damages arising directly or indirectly to members or non-members from alleged incorrect or misleading advice, recommendation or information and strongly advises all members to seek always the services of qualified practitioners and/or professionals for any technical matters, such practitioners and/or professionals being exclusively responsible for possible damages arising from their activity, including their technical opinions that may be inserted in our publications.