PORTUGAL Law and Practice Contributed by: Miguel Durham Agrellos, Paulo da Rocha Pichel and Ricardo Pereira Amaro, Durham Agrellos
3.2 Recognition of Trusts See 1.1 Tax Regimes . 3.3 Taxation of Trusts, Foundations and Similar Entities Located in Other Jurisdictions Payments made by fiduciary entities to beneficiaries who are tax-resident in Portugal are taxed at a 28% rate (or 35% if paid by an entity located in a blacklist - ed jurisdiction). Proceeds arising from the termination or liquidation of fiduciary entities are subject to tax if the beneficiary is the settlor, at a rate of 28% (or 35% if paid by an entity collated in a blacklisted jurisdiction). CFC rules may apply if the fiduciary entity is located in a blacklisted jurisdiction. 3.4 Tax Consequences of Fiduciary and Beneficiary Roles As mentioned in 3.3 Taxation of Trusts, Foundation and Similar Entities Located in Other Jurisdictions , proceeds arising from the termination of fiduciary enti - ties are subject to tax if the beneficiary is the settlor, at a rate of 28% (or 35% if paid by an entity collated in a blacklisted jurisdiction). 4. Family Business Planning 4.1 Asset Protection Asset protection planning in Portugal usually consid - ers: • implementing family business structures with trans - national elements in order to benefit from multi- layer protections (eg, national law, EU law, bilateral investment treaties, etc); • unit-linked insurance policies, especially in jurisdic - tions such as Luxembourg and Ireland; and • choosing the separation-of-property marital regime to avoid communication of debts. 4.2 Succession Planning Generally, business succession planning comprises the following elements. • Incorporation of family holding companies in accordance with the different branches of the fam - ily.
waiving their right to inherit. The effectiveness of this agreement depends on the choice of the separation- of-property regime (see 2.4 Marital Property ). In any case, this agreement will not restrict the surviving spouse’s right to use the family residence for at least five years. 2.4 Marital Property The Portuguese civil code establishes three regimes to regulate marital property: • general community of estate – all combined prop - erty is considered joint; • estate subsequent to marriage – only property earned during the marriage is considered joint property (framework applicable by default); and • separation of property between spouses. If the separation-of-property regime does not apply, the consent of the other spouse is particularly relevant in the transfer of immovable property. 2.5 Transfer of Property From a tax perspective, the transfer of property may imply a step-up of the asset value. 2.6 Transfer of Assets: Vehicle and Planning Mechanisms See 1.1 Tax Regimes , particularly the material on exclusions and exemptions on stamp tax, applicable to donations and succession. 2.7 Transfer of Assets: Digital Assets No special rules apply to the transfer of digital assets. There is no relevant case law in Portugal concerning digital assets. 3. Trusts, Foundations and Similar Entities 3.1 Types of Trusts, Foundations or Similar Entities In general, domestic trusts and foundations are not used in Portugal for planning purposes. However, under international structures, such entities are used in certain cases.
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