Foreigners can inherit property and assets in Portugal under the same legal framework that applies to Portuguese citizens.
The inheritance law in Portugal for foreigners determines how heirs, taxes, and probate procedures apply depending on the relationship to the deceased and residency status.
This article covers:
- Is there inheritance tax in Portugal for non residents?
- Who inherits in Portugal?
- Who is disqualified from inheriting under a will?
Key Takeaways:
- Children, spouses, and parents are generally exempt from inheritance tax.
- Non-family members may face 10% stamp duty on inherited assets.
- Mandatory heirs cannot be completely disinherited without legal cause.
- Bank accounts are frozen until probate is completed and inheritance is settled.
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The information in this article is for general guidance only. It does not constitute financial, legal, or tax advice, and is not a recommendation or solicitation to invest. Some facts may have changed since the time of writing.
What are the inheritance rules in Portugal?
In Portugal, inheritance is governed by the Civil Code, which sets out who can inherit and in what order. The law recognizes two types of heirs: mandatory heirs and free heirs.
- Mandatory heirs (children, spouses, and parents) are entitled to a reserved portion of the estate, known as the legítima, which cannot be overridden by a will.
- Non-mandatory heirs (other relatives or non-family members) can only inherit what remains after the reserved portion has been allocated.
Can a non-citizen inherit?
Yes, a non-citizen can inherit in Portugal. Foreign heirs are treated the same as Portuguese nationals under the law.
However, if the deceased had assets in multiple countries, inheritance could be influenced by international treaties or conflicts of law rules.
It’s also essential for non-residents to comply with Portuguese probate procedures to claim their inheritance.
Who is not allowed to inherit from parents?
In Portugal, individuals who intentionally harmed the deceased or were legally disinherited for just cause under the Civil Code are not allowed to inherit from their parents.
Non-family members or distant relatives who are not named in a will are also unlikely to inherit unless all closer heirs have renounced their rights.
Is there inheritance tax in Portugal for non-residents?
Portugal does not levy a general inheritance tax for most heirs.
Instead, a stamp duty (Imposto do Selo) of 10% applies to inheritances, but this mainly affects transfers to non-family members.
Exemptions for close relatives:
- Spouses, children (descendants), and parents (ascendants) generally do not pay stamp duty, whether they are Portuguese residents or foreign nationals.
- Mandatory heirs can inherit assets from parents or spouses tax-free, with no limit on the amount, provided they fall under family exemption rules.
Other heirs:
- Siblings, friends, or non-family members are subject to the 10% stamp duty on inherited assets.
- Portugal does not have a separate estate tax for foreigners; tax exemptions depend mainly on the heir’s relationship to the deceased.
This unified approach clarifies how inheritance taxation works for non-residents while highlighting the benefits for close family members.
What happens to a bank account when someone dies in Portugal?
When someone passes away in Portugal, their bank accounts are frozen immediately.
Access is restricted until the estate is settled and probate procedures are completed.
The bank will usually request:
- Death certificate
- Identification of heirs
- Probate or inheritance documentation
Mandatory heirs can then claim their share, and any applicable stamp duty is calculated before funds are released.
How to avoid forced heirship in Portugal?
Foreign nationals can elect for the succession law of their country of nationality to apply instead, effectively overriding Portuguese forced heirship.
This choice must be expressly stated in your will or similar legal document; your family cannot make this election after your death.
You can also plan your estate to minimize disputes by making lifetime gifts or arranging certain trusts or property transfers while respecting the legítima.
Planning and Protecting Your Inheritance in Portugal
Even though Portuguese inheritance law treats foreigners largely the same as citizens, careful planning ensures your assets are distributed according to your wishes and minimizes legal or tax complications.
1. Choosing the applicable succession law
Foreign nationals can elect for the succession law of their country of nationality to apply instead of Portuguese forced heirship.
This must be clearly stated in a valid will. This option is especially useful if you wish to avoid restrictions like the legítima portion for mandatory heirs.
2. Using lifetime gifts and trusts
Strategic lifetime transfers or trusts can help reduce future disputes, manage estate taxes, and ensure your heirs receive assets efficiently. Gifts to children, spouses, or parents are generally exempt from stamp duty.
3. Understanding bank procedures and frozen assets
When someone dies, Portuguese banks freeze accounts until probate is completed.
Knowing the required documents in advance (death certificate, heir identification, probate papers) helps heirs access funds more quickly and reduces delays.
4. Planning for non-family heirs
Non-family members face a 10% stamp duty. Planning ahead through wills or donations can ensure that friends or distant relatives inherit efficiently, without unexpected costs or legal challenges.
5. International estate coordination
If you have assets in multiple countries, consider international treaties or conflicts-of-law rules.
Coordinating your Portuguese estate plan with plans in other jurisdictions prevents double taxation and simplifies inheritance for your heirs.
6. Professional advice is invaluable
Hiring a lawyer familiar with inheritance law for foreigners can help navigate probate, stamp duty exemptions, and cross-border issues.
Professional guidance is particularly important for non-residents, mixed-nationality families, or complex estates.
Conclusion
Foreigners can inherit in Portugal with relative ease, especially if they are immediate family members.
By understanding the inheritance rules, stamp duty exemptions, and probate requirements, non-citizens can efficiently manage inherited assets while avoiding unnecessary taxes.
For more complex estates or offshore inheritance, consulting a wealth manager can help navigate legal requirements, optimize tax efficiency, and ensure a smooth transfer of assets.
FAQs
How to avoid inheritance tax in Portugal?
To avoid inheritance tax in Portugal, leave assets to spouses, children, or parents, who are fully exempt from stamp duty.
You can also consider joint ownership with survivorship rights for certain properties and use a Portuguese will to clearly define distribution and prevent disputes.
Who is exempt from inheritance tax?
Spouses, children, and parents are fully exempt from inheritance tax in Portugal.
All other heirs may be required to pay 10% stamp duty on inherited assets.
What is the non-resident tax in Portugal?
Non-residents in Portugal are generally taxed at a 25% flat rate on employment income from Portuguese sources.
Other types of income, such as self-employment, pensions, or investment income, may be subject to different flat rates under the non-resident or NHR tax regime.
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