If your Portuguese property is currently owned by an Offshore Company in a blacklisted jurisdiction, you are now faced with paying new punitive taxes in annual rates and, to compound your misery, you will in addition pay a tax on an assumed rental income, whether you enjoy that income or not, and that tax came into effect on 1st January 2002.

Many Offshore Company owners are in some confusion as to what they should do about the situation. Some owners may even be contemplating transferring the asset out of the company into their personal names, which will not only incur Property Transfer Tax (IMT) plus Legal, Notarial, and Registration fees but will remove anonymity and give no protection against future Inheritance Taxes, and you will also incur Capital Gains and Dividend Distribution Taxes, payable on transfer.

If you have been contemplating transferring the asset into your personal name it is no longer wise to think that you can under declare the value, which has been the national practice in Portugal since “time immemorial”, as Local Authorities now have the legal power to purchase any property if they consider the declared price is not the market price – Draconian? Maybe, but be warned this new law has already been exercised by a Local Authority in the Algarve and more will surely follow.

SMEC, through their local Professional Representatives, can resolve your problem within a matter of a few weeks and at an economical cost. They can also arrange all notifications that are required to the Portuguese Company Registration Office in Lisbon, and liaising with your Fiscal Representative.

Implementing the right solution is just as important to those presently planning to sell their property if it is currently held in an Offshore Company as you are effectively reducing the price by the amount of the IMT and legal costs as well as offering your buyer all the ongoing advantages.

Talk to a local SMEC Representative…