How to Ensure your Assets in Portugal and the UK are received by your Designated Beneficiaries

British nationals that have relocated to Portugal frequently overlook the question of their estate. Portugal and England and Wales have both have distinct approaches, should a person die intestate, regarding who inherits, probate and inheritance tax. The vast majority of individuals plan to leave their estate to their spouse or partner and their children if they have any.

In England and Wales an individual has testimony freedom enabling them to leave their estate to a person or persons or even an organisation of their choosing through a will. There is no obligation to include relatives and relatives can be excluded entirely from inheriting.

The will can be challenged by family members if they have not been included as beneficiaries and can demonstrate that they were financially dependent on the deceased. British nationals generally prefer this flexibility, allowing them to have control over their estate planning.

Whereas in Portugal it differs significantly due to its "forced heirship" rules, which means that certain heirs, such as the deceased’s spouse, children, or parents, have a legal right to a portion of the estate, called the legítima. This share cannot be reduced or overridden by a will, limiting the individual’s testamentary freedom.

In Portugal if the deceased has a spouse and children, these heirs collectively have a right to at least two-thirds of the estate under Portuguese law. Only the remaining one-third can be freely allocated according to the deceased’s wishes. In the event of the deceased (testator) failing to comply with the forced heirship rules, family members may legally challenge the will in Portuguese courts, potentially leading to a redistribution of the estate in accordance with their legitimate portions.

Marco Lobato, an Associate in the Porto office, comments “For individuals with assets in both countries, cross-border inheritance can become complex. In Portugal, if a foreign national dies intestate having permanently relocated to Portugal, their estate will be distributed according to Portuguese civil law of forced heirship." Marco further pointed out “A British national with assets in Portugal is advised, under the EU Succession Regulation (Regulation (EU) No. 650/2012) which offers EU citizens the option to apply the law of their nationality to their entire estate, even if they reside in another EU country. This also can apply to a British national, who could specify in their Portuguese will that English law should apply to all assets in accordance with their English will. Doing so would allow them to exercise the testamentary freedom granted under English law while still having a valid Portuguese will in place, this approach allows for a clear division of assets between jurisdictions”

Giambrone & Partners’ inheritance lawyers point out that without dual wills, the estate could face delays or even legal disputes, especially where the testamentary freedom allowed under English law clashes with Portuguese forced heirship rules. A lawyer, by structuring the estate plan thoughtfully, can avoid the potential for conflict. A Portuguese will could also help streamline the probate process for assets located in Portugal, as it would be recognised under local jurisdiction, avoiding the need for translation and revalidation of an English will. 

Our lawyers also advise that there is a significant benefit in appointing lawyers in both Portugal and the UK to administer the assets in the estate in both countries when the time comes. Pre-appointing lawyers ensures that each part of the estate is dealt with in accordance with the wishes of the testator and the appropriate laws, minimising administrative delays and managing legal challenges.

Navigating probate in Portugal and the UK requires understanding both countries' regulations, especially for individuals with cross-border assets. Additionally, tax implications differ, with the UK imposing inheritance tax and Portugal applying a lower-rate stamp duty.

Probate in England and Wales

In the UK, probate refers to the legal process where the deceased’s assets are established, any outstanding debts are paid from the estate and the remainder of the estate is distributed to the beneficiaries. The executor or an administrator, depending on whether there is a will, applies for a Grant of Probate or Letters of Administration.

The process involves:

• If there is a will, locating and verifying the deceased's will.
• Valuing all the assets of the estate.
• Identifying and liabilities attached to the estate.
• Paying inheritance tax, if applicable.
• Distributing assets to beneficiaries after obtaining the Grant of Probate.

Probate in Portugal

The person that administers a deceased person’s estate may be the spouse, eldest child, executor named in a will, or a person of trust appointed by a judge. The head of the household is responsible for administering the estate, according to the Portuguese Civil Code.

• A death in Portugal must be reported within two days of the at the Civil Registry Office (“Conservatória de Civil Registo”) in the district where the death occurred.
• The assets must be confirmed and validated within three months.
• A deed of heirs must be signed and submitted to the local tax office.
• The inheritance must be distributed to the beneficiaries in accordance with forced heirship.
• Complete a Deed of sharing if the heirs want to distribute the assets amongst themselves
• Paying outstanding debts and taxes

Inheritance Tax in England and Wales

Estates of over £325,000 attract and Inheritance tax rate of 40%. There are some tax reliefs and exemptions that may reduce this tax. Additional reliefs apply if the estate is passed to a spouse or charity.

Inheritance Tax in Portugal

Portugal does not impose a traditional inheritance tax, but a "Stamp Duty" (Imposto do Selo) at the rate of 10% applies to most estates. However, transfers between close family members (e.g., spouse, children, or parents) are exempt from this tax.

Navigating inheritance and probate for cross-border estates requires understanding both countries' regulations and tax implications. It is strongly recommended to instruct expert inheritance lawyers in both jurisdictions to ensure all the procedures are carried out correctly and to manage or avoid any legal challenges. Giambrone and Partners’ inheritance lawyers in both Portugal and England and Wales can guide and advise you in all aspects of inheritance.

Marco has extensive experience and proficiency in a wide range of commercial disputes and civil litigation matters including debt recovery where he assists the parties with negotiating settlements and provides structured payment plans. He also mediates in breach of contract matters, partnership disputes and employment law disputes to avoid lengthy court procedures and is able to establish the full range of intellectual property rights for clients. He is well regarded by his clients who recognise that his thorough understanding of their business objectives results in solution-based strategies that are effective in achieving sought-after outcomes.

Marco has advised in a number of high-profile criminal cases and as a multi-lingual criminal defence lawyer holds particular expertise in assisting clients of various nationalities with criminal allegations in a wide range of criminal proceedings, providing judicial representation but also negotiating where possible with the relevant authorities to avoid having to appear in court.

Marco’s expertise further extends to assisting individuals with family law, including divorce, financial and child arrangements, prenuptial agreements, personal injury, inheritance, wills and probate, as well as assisting in the distribution of assets under the laws of succession related to intestate succession. Cross-border real estate purchases, as well as real estate disputes relating to landownership, property boundaries, easements and zoning regulations also fall under Marco’s expertise in addition to advising in associated immigration issues

If you would like to know more about how your Uk and Portuguese assets can be inherited by your beneficiaries please contact Marco's clerk Bruno Diniz on bruno.diniz@giambronelaw.com or please click here.