For business owners, this often coincides with another turning point: the sale of a company or a step back from day-to-day operations. It’s tempting to tie it all together — sell the business, relocate, and begin again with a better work-life balance. But the way these steps are sequenced can make a world of difference from a tax perspective.

Portugal’s new “NHR 2.0” regime — which replaces the previous Non-Habitual Resident scheme — is still settling into place. It offers potential tax exemptions on certain types of foreign income, including dividends and capital gains, but only once residency and eligibility are formally confirmed. That’s where timing matters.

One approach we’ve been advising on is this: rather than selling a business after moving to Portugal, many individuals are better served by completing the sale while still UK-resident. In doing so, they may benefit from the UK’s Substantial Shareholding Exemption (SSE), which can eliminate tax on qualifying corporate disposals.

The proceeds can remain within the UK company structure for now, and no personal tax should be triggered until dividends are drawn. Only once Portuguese residency is established — and, crucially, once the NHR 2.0 scheme has been approved — should individuals consider accessing those funds. If all conditions are met, dividends may then be received with a favourable tax outcome in Portugal.

This strategy not only reduces exposure during a period of legislative change but also provides flexibility. If NHR eligibility is not granted, or if plans shift, the funds remain untouched, and the individual retains control.

Of course, each case depends on its details. But what’s clear is this: with the right cross-border planning, it’s possible to enjoy the best of both worlds — a tax-efficient business exit and a smooth relocation to a country many are proud to call their new home.

At Forvis Mazars, our UK and Portuguese teams work hand in hand to help clients make this transition with clarity and confidence. If you’re spending the summer here and wondering whether life in Portugal could be more than a holiday, it might be the perfect time to start the conversation.

Mário Patrício, Tax Senior Manager at Forvis Mazars in Portugal (mpatricio@mazars.pt)