Double taxation

[WINDSURFER]

Hello, I have a FHR in Portugal and for 10 years have paid tax in the UK and Portugal on the same income as I was advised that this was required. I have now heard that I should not be double taxed in the UK on the same income when tax has been paid in Portugal. Any advice would be appreciated. Thank you

[AGoodman]

No, you shouldn't be paying tax twice. In fact it's extremely rare that anybody has to pay twice.

The relevant provision is in Article 21(2)(a) of the new 2025 UK Portugal Double Tax Treaty-https://www.gov.uk/government/publications/portugal-tax-treaties

That's very new. It would previously have been covered in the same way by Art 22(1) of the 1968 Treaty.

The fact it is an FHL shouldn't make a difference as the treaty includes businesses deriving any form of profit from rental income.

You still in theory have a tax liability in both countries but you pay your tax to Portugal and then that tax can be set off as a credit against your UK tax liability. You would only have to pay any excess in the UK. It gets a little complicated because the UK and Portugal have different tax years so you may need to apportion the Portuguese tax.

If you have overpaid, you can claim back UK tax for up to 4 years using Overpayment Relief.

You may also want to revisit whoever gave you the original advice as, if they were paid professionals, you may be able to obtain compensation.

[WINDSURFER]

Thank you for the reply. I have obviously paid a lot of unnecessary tax for 10 years. I will do what I can to claim some back.