Estate Planning for British Expats in Portugal: What Brexit Changed and What Didn't

In short: Britons are the largest foreign community along the Algarve and a growing presence in Lisbon and the Silver Coast — yet British estate planning in Portugal sits on a fault line. Two things collide: Portuguese succession law, which reserves fixed shares for family, and UK inheritance tax, which follows your domicile rather than where you live. Brexit did not change the succession rules, but it did change your status. With a valid will, a deliberate choice-of-law election under EU Regulation 650/2012, and an organised record of where everything is, you can keep your wishes intact and spare your family a cross-border ordeal in two languages.

The quiet assumption that catches British expats out

Picture a couple from Surrey who sold up and bought a villa near Tavira, or a Londoner now working remotely from Cascais. In England and Wales they enjoyed near-total freedom of testation — you can leave your estate to whomever you like. That freedom is so deeply assumed that most Britons never think of it as a feature of a particular legal system. It is.

Portugal works differently. Portuguese succession law imposes legítima, a system of forced heirship that reserves a large portion of the estate — up to two-thirds — for a protected class of heirs (herdeiros legitimários): spouse, children, and in their absence, parents. A British expat who dies habitually resident in Portugal, having made no election, can find that Portuguese law overrides the freedom they took for granted — leaving a will that no longer does what they intended.

The second surprise is tax, and here Brexit matters. The UK taxes inheritance on the basis of domicile, a sticky common-law concept that is much harder to shed than tax residence. Many Britons who have lived in Portugal for years remain UK-domiciled, which means UK Inheritance Tax (IHT) at 40% above the nil-rate band can still reach their worldwide estate — on top of whatever Portugal applies. Living in the Algarve does not, by itself, end your exposure to HMRC.

None of this is cause for alarm. It is simply a reason to organise things now, calmly, while you can make the choices yourself.

What the law actually says for British nationals

EU Regulation 650/2012 still applies to you — even after Brexit

Here is the point most Britons get wrong. The UK opted out of EU Regulation 650/2012 (Brussels IV), and Brexit reinforced that the UK is now a "third State." But the Regulation is applied by Portugal, not by the UK — and Portugal applies it to everyone who dies habitually resident there, whatever their nationality. So the Regulation governs your Portuguese succession regardless of Brexit.

Its default rule: the law of your country of habitual residence at death governs your entire estate. Settle genuinely in Portugal, and Portuguese law — including legítima — applies to your worldwide estate by default, from your Algarve villa to your ISA back in Britain. We cover the framework in depth in our guide to EU Regulation 650/2012 for expats.

The choice-of-law election is your single most important decision

Article 22 of the Regulation lets you choose the law of your nationality to govern your succession. A British citizen can elect the law of England and Wales (or Scotland, or Northern Ireland) in their will, and Portugal will give effect to that election — restoring your freedom of testation and displacing Portuguese forced heirship.

For most Britons in Portugal, this election is the centrepiece of the plan. Without it, silence means Portuguese law. With it, your estate follows the rules you grew up with. The election must be expressed explicitly in a valid will; it is never automatic, and your nationality alone does not protect it.

A critical caveat: the choice of law does not change which country taxes the estate. Electing English law decides who inherits what; it does nothing to remove Portuguese tax or UK IHT. Distribution and taxation are separate questions, and conflating them is one of the most common and costly mistakes British expats make.

Tax: two systems, no shield

Portugal has no classic inheritance tax. Instead it levies Imposto do Selo (stamp duty) at 10% on Portuguese assets passing to beneficiaries — but transfers to spouses, descendants and ascendants are exempt. For a typical British family leaving assets to a spouse or children, the Portuguese side is often light.

The UK side is where the weight sits. If you remain UK-domiciled, UK IHT can apply at 40% above the nil-rate band to your worldwide estate. Domicile is not the same as residence: it depends on long-term intention and origin, and HMRC does not accept that you have shed a UK domicile of origin easily. There is no UK–Portugal inheritance-tax treaty to coordinate the two systems, so unilateral reliefs and careful planning are what stand between your heirs and a double hit. Assessing your domicile status is a job for a UK-qualified adviser — it is the single most consequential tax question in a British Portuguese estate.

For anything involving real property or the wording of your election, work with a lawyer qualified in the relevant jurisdictions. Sucesio is not a substitute for that advice; it is what makes the advice easy to act on and easy for your family to find.

The classic mistakes British expats make

The first is assuming freedom of testation travels with you. It does not. Without an Article 22 election, Portuguese forced heirship can rewrite your wishes.

The second is assuming Brexit ended UK tax exposure. Domicile, not residence, drives UK IHT — and domicile is stubborn. Many long-term residents of Portugal remain UK-domiciled without realising it.

The third is keeping conflicting wills. An old English will and a later Portuguese will can revoke each other by accident. The cleanest structure is usually a Portuguese will covering Portuguese assets that expressly preserves — rather than cancels — an English will, coordinated by a professional.

The fourth is the invisible estate. A UK pension and ISA, a Portuguese bank account, a brokerage login, a crypto wallet, the password to the family photo archive. Portuguese probate cannot distribute what no one can find, and British heirs tracing assets from abroad, in a language they may not read, can lose months. This gap has nothing to do with law and everything to do with organisation.

How Sucesio complements your will

Sucesio does not replace your will, your UK solicitor or your Portuguese notário. It complements them. Your will and your Article 22 election are the legal instructions; Sucesio is the secure, organised record that lets those instructions actually be carried out — fast, and without your family hunting through drawers in two countries.

Inside your Sucesio digital vault you can organise, in one calm place:

Physical assets — your Portuguese property, any UK real estate, vehicles, valuables — with notes on where deeds and paperwork sit.
Digital and financial assets — UK and Portuguese bank accounts, pensions, ISAs, brokerage and crypto holdings (with secure access hints, never a place for raw private keys or unguarded passwords), and online accounts.
Business and contracts — company documents, insurance policies, pension arrangements.
Personal, non-legal legacy — a letter to your children, a recipe, the recommendations and memories you want to outlive you.

When the time comes, the right people receive exactly what you chose for them — securely and automatically. Your heirs do not search. They find. As we like to put it: so that your loved ones don't have to go looking — they simply find what you left for them.

A step-by-step plan: what to do now

Start with the law election. Decide, ideally with a cross-border lawyer, whether to elect the law of England and Wales (or your UK home nation) in your will, and have that clause drafted explicitly.

Next, check your domicile. Ask a UK-qualified adviser whether you are still UK-domiciled and what that means for IHT — this is the question with the largest financial consequences.

Then align your wills. Coordinate any English will with a Portuguese will so neither cancels the other and Portuguese assets pass efficiently through a notário.

After that, map your estate honestly across both countries — property, pensions, ISAs, accounts, insurance, digital and crypto holdings — and organise access and instructions in Sucesio, separating the legal "who inherits" from the practical "how do they reach it."

Finally, review every two to three years or after any major change — a property purchase, a marriage, a new grandchild, or a shift in UK tax rules.

FAQ

Q: I live in Portugal now. Do I still need to worry about UK inheritance tax? A: Very possibly, yes. UK IHT follows domicile, not residence, and shedding a UK domicile of origin is difficult. If you remain UK-domiciled, HMRC can tax your worldwide estate at 40% above the nil-rate band. A UK-qualified adviser should assess your specific status.

Q: If I elect English law in my will, does that reduce the tax? A: No. Choosing English law under EU Regulation 650/2012 governs how your estate is divided, not which country taxes it. The election restores your freedom of testation; it does nothing to UK IHT or Portuguese stamp duty.

Q: Does Brexit mean EU Regulation 650/2012 no longer applies to me? A: No. The Regulation is applied by Portugal to everyone who dies habitually resident there, whatever their nationality. You can still elect the law of your UK home nation under Article 22, and Portugal will give it effect.

Q: Will my children pay Portuguese tax on the villa? A: Portugal has no classic inheritance tax; it levies Imposto do Selo (stamp duty) at 10%, but transfers to spouses, descendants and ascendants are exempt. So direct-line heirs typically face little or nothing on the Portuguese side — the UK side is usually the bigger question.

Q: What happens to my passwords, accounts and crypto? A: Nothing automatic — and that's the danger. Wills and probate don't recover logins. Sucesio lets you organise secure access hints and instructions so your chosen people can reach your digital and financial life without you having to expose sensitive credentials in a legal document.

This article is provided for informational purposes only and does not constitute legal, tax or financial advice. For any decision regarding your estate, consult a qualified notary or lawyer in your country of residence. Sucesio is a complement to a traditional will, not a replacement for one.

— The Sucesio Team