Inheritance matters in Portugal can feel complex, mainly when assets or heirs are spread across countries. Anyone dealing with Portuguese inheritance should understand the legal framework, the role of European law, and the tax obligations that arise when a person dies.
How Inheritance Law Works in Portugal
Portuguese inheritance law is rooted in the Civil Code and shaped by European legislation. Since 2015, the EU Succession Regulation (Regulation 650/2012) has applied to cross-border cases.
This regulation allows two main approaches:
- The estate is usually governed by the deceased’s last habitual residence law.
- Alternatively, the deceased may choose the law of their nationality to apply, often through a will.
This makes inheritance planning especially important for foreign residents or families with property in Portugal.
Forced Heirship Rules in Portugal
Portugal does not allow complete freedom to decide who inherits. Certain relatives are entitled to a reserved share of the estate, known as the “legítima.”These forced heirs include:
- Spouses
- Children and other descendants
- Parents and other ascendants
The reserved portion varies: if only a spouse or one child survives, they receive half the estate. Where there are more heirs, two-thirds of the estate is protected for them.
Because of these restrictions, estate planning in Portugal often requires balancing personal wishes with the law’s mandatory protections.
Taxation of Inheritance in Portugal
Portugal is often considered attractive for inheritance because there is no inheritance tax. However, this does not mean heirs face no taxes.
Stamp Duty
The central tax is Stamp Duty, charged at 10% on inherited assets. But there are important exemptions. Transfers between spouses, ciessentialers, parents, and children are free from Stamp Duty, although reporting is still required.
Other Possible Taxes
- IRS (Personal Income Tax): If the estate continues generating income (such as rent or dividends), heirs must declare it.
- IMT (Property Transfer Tax): May apply if an heir receives more property than their legal share.
- Capital Gains Tax: Applies if heirs later sell inherited assets at a profit.All taxes and declarations must usually be managed by the “cabeça-de-casal,” often the surviving spouse or another designated heir.
Why Planning Matters
Inheritance cases in Portugal often involve foreign nationals, cross-border property, and multiple heirs. Without proper planning, disputes and unexpected taxes can arise. Families can simplify the process by making a will and, where possible, choosing which law applies. At the same time, understanding Portuguese forced heirship and tax rules ensures compliance with local law.
Key Takeaways
- Portuguese inheritance law combines national rules with EU succession regulation.
- Forced heirship guarantees shares to close family members.
- Portugal has no inheritance tax, but Stamp Duty and other taxes may apply.
- Early planning helps families reduce complexity and avoid conflicts.
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