Your NHR is ending: what British expats in Portugal should consider before the 10-Year window closes

By Steve Thompson | Atlas Bridge Wealth | May 2026

For many British expatriates, Portugal’s Non-Habitual Resident regime played an important part in the original decision to move.

The attraction was clear: a favourable tax framework, good quality of life and, for many retirees, a more manageable treatment of overseas pension income. But NHR was never intended to last forever.

Although the original NHR regime has now been withdrawn for most new arrivals, those already benefiting from it can continue within their permitted period. For existing NHR residents, however, the important question is no longer whether the regime exists.

It is this:

What happens when your own NHR period comes to an end?

That may be one of the most important financial planning questions facing longer-established British residents in Portugal over the next few years.

NHR is a limited window, not a lifetime tax status

Existing beneficiaries of Portugal’s original NHR regime can ordinarily benefit for a maximum 10-year period. During that period, the regime may provide preferential treatment for certain income, including a fixed 10% rate on qualifying foreign-source pension income for those within the applicable version of the regime, and special treatment for some other income categories.

Once an individual’s NHR period ends, they will generally move into the ordinary Portuguese tax system.

That transition may be relatively straightforward for somebody with limited overseas income. For a British retiree or internationally mobile family with UK pensions, investment portfolios, property income or business interests, it may be far more significant.

The key is not to wait until the final tax return under NHR has already been submitted. Good planning normally needs to begin well before the preferential period expires.

Why the end of NHR matters so much for British retirees

Many British people living in Portugal rely on income drawn from UK-based sources, including:

• State Pension income;

• defined benefit or final salary pensions;

• SIPPs and personal pensions;

• investment portfolios;

• UK rental property;

• dividends, interest or business income.

While NHR applies, some of these income sources may have benefited from preferential Portuguese tax treatment, depending on the individual’s circumstances and the specific rules applicable to their registration.

After NHR, the same income may fall within Portugal’s ordinary tax rules.

For 2026, Portuguese tax residents are generally taxed on worldwide income at progressive income tax rates ranging from 12.5% to 48%, with an additional solidarity rate potentially applying above certain levels of taxable income. Special rates can apply to certain investment income and capital gains.

For somebody drawing a substantial pension or relying on overseas income in retirement, the difference between an NHR position and the ordinary Portuguese tax regime could materially affect disposable income and long-term financial security.

The pension issue: do you know your position after NHR?

Pensions are often the largest and most sensitive planning area.

A British retiree may have moved to Portugal expecting their pension income to be taxed at a manageable rate under NHR. If that period is approaching its end, they need to understand what their retirement income may look like afterwards.

That does not mean making rushed pension withdrawals simply because NHR is ending. Large withdrawals can have consequences, and the correct treatment depends on the pension type, the individual’s residency position, applicable tax rules and the interaction between the UK and Portugal.

However, it does mean asking the right questions early:

• What pension income will I need after my NHR period ends?

• How will my UK pension income be treated in Portugal at that stage?

• Am I drawing income in the most appropriate way?

• Would a different income strategy improve the sustainability of my retirement plan?

• Should certain decisions be considered before NHR expires, subject to proper Portuguese tax advice?

This is also an area where the UK–Portugal Double Taxation Convention must be considered carefully. The treaty position, the type of pension involved and whether UK tax has been deducted can all affect the overall outcome.

The right answer is unlikely to be the same for every retiree.

UK investments and ISAs may need a fresh review

Pensions are not the only area to consider.

Many British expatriates continue to hold UK investment accounts or ISAs after moving to Portugal. These may have been entirely sensible while resident in the UK. But a UK tax wrapper is not automatically recognised in the same way once the owner is resident in Portugal.

An ISA, for example, may remain tax-free from a UK perspective, but that does not automatically mean that income or gains within it receive the same treatment in Portugal.

The end of NHR can therefore be an important trigger point for reviewing:

• UK ISAs;

• general investment accounts;

• investment platform portfolios;

• cash deposits and savings accounts;

• dividend-producing investments;

• realised gains and withdrawal strategies;

• existing life assurance or investment bond structures.

The aim is not to make unnecessary changes. It is to understand whether your existing arrangements remain appropriate now that the tax environment around you is changing.

For some residents, a more Portugal-appropriate investment structure may improve tax efficiency, administration and long-term planning. For others, the existing arrangements may remain suitable. The answer depends on the individual, the assets involved, the likely investment horizon and advice from an appropriately qualified tax professional.

NHR ending can change your retirement cash flow

One of the biggest risks is focusing only on investments or tax rates, without understanding the effect on everyday life.

A tax increase on pension income or investments can reduce the amount available for regular spending, travel, family support, healthcare or later-life care.

This is where proper cash flow modelling becomes especially valuable. We offer a full cashflow analysis report at Atlas Bridge Wealth, read more here: Our Planning FEES.

A good retirement plan should test questions such as:

• What happens to my net income when NHR ends?

• Can my assets still support the lifestyle I want?

• Do I need to change the balance between pension income, cash reserves and investment withdrawals?

• What happens if markets fall at the same time as my tax position changes?

• Will I still have sufficient flexibility later in retirement?

For many clients, the end of NHR is not simply a tax event. It is a retirement planning event.

Knowing in advance what the change could mean allows time to consider sensible options, rather than having to react after income has already been affected.

Property income and future disposals also need attention

British residents in Portugal often retain property in the UK, either as an investment or because they have not yet decided whether to sell.

Rental income from UK property may need to be declared in Portugal while the owner is Portuguese tax resident. The end of NHR may alter the overall tax picture, particularly where foreign-source income previously benefited from more favourable treatment.

Future property disposals also need careful planning. Selling a UK property, a Portuguese property or another overseas asset may produce very different results depending on residency, timing, ownership and the applicable tax framework.

Anyone approaching the end of NHR who owns property in either the UK or Portugal should take advice before selling, gifting or restructuring assets.

Doing things in the right order can matter just as much as deciding what to do.

What should you review before NHR ends?

If your NHR status is due to end within the next two or three years, this may be an appropriate time to begin a structured review.

That review might include:

1. Confirming your final NHR year

   Make sure you know precisely when your individual NHR period ends and from which tax year ordinary Portuguese rules will apply.

   
   

2. Reviewing your sources of income

   Identify pensions, rental income, dividends, interest, business income and regular withdrawals from investments.

   
   

3. Understanding your future tax exposure

   Work with a qualified Portuguese tax adviser to model how your position may change after NHR.

   
   

4. Reviewing pension withdrawal strategy

   Consider whether your current retirement income approach remains appropriate after the preferential regime ends.

   
   

5. Reviewing UK-held investments and wrappers

   Determine whether ISAs, general investment accounts or other UK arrangements remain suitable for a Portuguese resident.

   
   

6. Running a cash flow forecast (preferably with us)

   Understand whether your long-term retirement plans remain sustainable after allowing for potentially different taxation.

   
   

7. Checking wills, estate planning and succession arrangements

   A change in your wider financial position is a sensible moment to ensure your estate planning remains aligned across jurisdictions.

   
   

Planning ahead is better than reacting later

The end of NHR does not mean that Portugal suddenly becomes the wrong place to live, nor does it mean that every resident needs to restructure their finances.

What it does mean is that a financial plan created during the NHR years should not automatically be assumed to remain suitable once that period ends.

For British expatriates, the interaction between UK pensions, Portuguese taxation, investment structures, property, succession planning and retirement income can be complex. The earlier the position is reviewed, the more time there is to make informed decisions.

At Atlas Bridge Wealth, we help British expatriates in Portugal understand how their pensions, investments and longer-term financial planning fit together across borders.

We do not provide Portuguese tax advice. Where specialist tax analysis is required, we work alongside appropriately qualified Portuguese tax professionals to ensure the planning is built on the correct foundations.

Because the end of NHR should not come as an unpleasant surprise. It should be something you have already planned for.

Arrange an initial conversation

If you are living in Portugal under NHR and your 10-year period is approaching its end, now may be a sensible time to review your pensions, investments, income strategy and longer-term retirement planning.

You can arrange an initial confidential discovery call with Atlas Bridge Wealth to discuss your circumstances and understand the next steps. You can do that here: DISCOVERY Call.

Important disclaimer

This article is for general information only and does not constitute Portuguese tax advice, legal advice, investment advice or a personal recommendation. Tax treatment depends on individual circumstances and may change. Atlas Bridge Wealth does not provide Portuguese tax advice and, where appropriate, works alongside suitably qualified Portuguese tax or legal professionals. Regulated financial advice is provided through appropriately authorised firms in the relevant jurisdiction.