by Raoul Ruiz Martinez email@example.com
Raoul Ruiz Martinez is a resident financial consultant for Finesco Financial Services Ltd., Glasgow. Finesco Financial Services Ltd is authorised and regulated by the Financial Services Authority (FSA).
Rising living costs and the impact of wealth taxes through austerity measures have taken the sunshine off life in Portugal.
Retiring or relocating your family to Portugal is still a dream for many. Expat pensioners with time and money sought, and seek, the attractive combination of sunshine, relaxed lifestyle and good food. Families are choosing Portugal for the same lifestyle and a child friendly nation.
However, life for the Algarve-based expatriate has become more difficult in recent years. The Euro, despite all its dramas, has strengthened against the Pound during the past decade, reducing the spending power of established expats with sterling income.
This has been a remarkable setback for the expatriate community and the Portuguese economy both, since it is traditionally seen as a major source of revenue.
Taxes are set to move higher. The Portuguese coalition government is contemplating further measures to increase capital gains taxes to 26.5% where just two years ago they stood at 10%. One can only fear that more of the same medicine is still to come.
So where does that leave us? Residents, non-residents, families or retirees all left crying in our vinho verde (or whatever your favourite tipple is)?
There have been stories in the papers about people returning to their home countries because the economic issues has forced them to rethink their plans as they cannot afford to live in Portugal anymore.
This appears not to have happened to any large extent and, in any case, with a significant move you need a certain amount of wealth to live in the first place, especially in a foreign speaking country.
As a result, with the right advice, you will be less affected by a drop in the currency or in your investments.
The consistent good weather, complemented by the peaceful and rustic charm of our adopted country continues to paint a positive picture against the backdrop of a turbulent and challenging financial world.
In this current state of profound change, as far as financial advice is concerned, the modern expatriate (both the recent and the more experienced) need to deal with not only somebody they trust, but who is also local.
Taxation is, of course, an important part of life since the more tax being paid means less money is available for spending. However, that is not the only reason for moving to Portugal and nearly always a lifestyle choice will win over a pure tax calculation.
People will continue to seek improvements in the quality of their lives within a different culture and lifestyle. Professional and ethical financial advice is the mainstay for this future in expatriate communities.
Raoul has a weekly radio feature (Raoul’s Rant) on the Owen Gee Solid Gold Sunday morning show on KissFM Algarve.
Raoul Ruiz Martinez can be contacted at the offices of euroFINESCOs.a. either by telephone on 289 561 333 or on email firstname.lastname@example.org.
All statements concerning tax treatment and their benefits are based upon our understanding of current tax law and practices both of which are subject to change in the future. Levels and bases of reliefs from taxation are also subject to change. This article is intended to provide a general review of certain topics and its purpose is to inform but NOT to recommend or support any specific investments or course of action.