Selling your UK property from Portugal? Here’s the tax twist nobody warned you about

Steve Thompson
Dec 30, 2025
4 min read

Steve Thompson, Founder, Atlas Bridge Wealth | Specialist advice for individuals and families moving to, living in, or leaving Portugal 🇵🇹

December 4, 2025

If you’re a Brit living in Portugal and still own a property back in the UK, whether it’s your old family home, a buy-to-let, or something you hung onto “just in case”, this might be one of the most important things you read this year.

Because there’s a quiet little tax trap that almost nobody talks about.

And occasionally I meet expats who say the same thing to me:

“Steve… I honestly thought selling my UK property while living in Portugal would be straightforward.”

It can be straightforward. But only if you understand how the UK and Portugal look at your gain, and they look at completely different numbers.

What the UK thinks your gain is… isn’t what Portugal thinks it is

A lot of people still think that if you’re non-resident in the UK, you can just sell your UK property tax-free.

That hasn’t been true for years.

Before April 2015, yes, non-residents could sell UK property with no UK capital gains tax at all. But since then, the UK introduced something called 'rebasing'.

In simple terms:

For residential property, the UK only charges CGT on the gain from April 2015 to the sale date.
Anything before that is often effectively wiped clean for UK CGT purposes.

So if you bought a buy-to-let in 1995 and sell it now, HMRC is usually only looking at the gain since 2015, a small slice of the true growth.

As one client put it recently:

“I thought the UK would tax me on everything since the 90s… Turns out they’re only interested in the last few years.”

Unfortunately… Portugal is interested in something very different.

Portugal looks at the whole story, except when it doesn’t

Once you become tax resident in Portugal, you enter a whole new system.

Here’s the part most expats miss:

A standard Portuguese resident can be taxed on the entire gain from original purchase all the way to the sale.
Under NHR or the new IFICI (“NHR2”) scheme, foreign property gains can be fully exempt during your 10-year window.

So while the UK might tax only the “2015 onwards” slice, Portugal may look at the whole thing from day one.

I had one chap in Lagos say to me:

“Steve… how can the UK be looking at £150k of gain and Portugal be looking at £300k? It’s the same flipping house.”

Welcome to cross-border tax.

Same property, same sale price. But....different countries, different rules.

A Real-World Example (Happens All the Time)

Let’s say you bought a rental flat in 1995 for £100,000 and it’s now worth £400,000.

The real gain is £300k.

But…

The UK rebases at 2015, maybe the property was worth £250k then. So the UK taxes only the £150k gain since then.
Portugal — if you’re a standard resident — can tax the entire £300k gain (subject to 50% inclusion and other rules).
Portugal under NHR/IFICI — the gain might be completely exempt.

One couple from the Silver Coast said it best:

“Nobody told us the timing mattered this much. If we’d sold six months earlier, still under NHR, we’d have saved a fortune.”

Timing isn’t just important, it’s everything.

And Then There’s the Day-Counting Problem…

You’d be amazed how many people get bitten by this.

Even after moving to Portugal, your UK day count still matters for:

UK tax residency
How your gains are taxed
Your future inheritance tax status
And whether HMRC might still consider you “UK-resident” in a year you sell

I had a client in Albufeira who said:

“Steve, I thought once I moved abroad, the UK stopped caring about how many days I spend there.”

If only.

The UK’s Statutory Residence Test has a long memory. And with the new long-term residence rules for inheritance tax, day counts are becoming more important, not less.

The Conversation Most Expats Haven’t Had Yet

When I meet expats who still own UK property, the questions usually start with:

“Should I sell?”
“Should I keep it as an income source?”
“Should I wait until after NHR expires?”

But the questions that really matter are things like:

When exactly did you buy the property?
When did you become Portuguese tax resident?
Are you under NHR or IFICI, and when does your 10-year window end?
Have you (accidentally) triggered UK residency again under the SRT?
And what’s your long-term plan, staying in Portugal or eventually returning?

Most people have never had this all mapped on one page.

As a client in Tavira said after we walked through it:

“I can’t believe how much money was riding on the sequence of events. No one ever explained this to us before.”

So What Should You Do?

You don’t need to rush and sell your UK property tomorrow.

But you do need to understand:

Whether the UK sees a small gain…
Whether Portugal sees a big gain…
And whether NHR/IFICI could mean no Portuguese tax at all for a limited window.

For some people the answer is:

“Hold onto it, you’re fine.”

For others:

“If you sell under the wrong system or at the wrong time, you could be paying tax you don’t need to.”

The difference can be huge.

If This Hit a Nerve

If you’re a UK expat in Portugal with a property still sitting in the UK, and nobody has ever walked you through both sides of the tax story, it’s worth getting proper cross-border advice.

Not UK advice. Not Portuguese advice. Both. At the same time.

If you want clarity on your own position, even just a 20-minute call, drop me a message.

There’s a reason so many expats tell me: