Technical article
Portugal: Does the New Scheme for Newcomers Help an Heir Who Just Lives on Trust Income?
On that description, a retired heir who lives on trust income does not meet the job test.
Imagine a family where a father in Canada sets up a trust, and his daughter moves to Portugal. She has no job there. She plans to live on what the trust pays her. She has heard that Portugal gives newcomers a low tax rate, and she asks whether that applies to her.
Here is what the public sources show. The older scheme for new residents closed to new applicants from 2024. Its successor is a scheme for what PwC describes as eligible employment and self-employment. It taxes that work at 20% flat for ten years and exempts most foreign-source income. The key words are an eligible job in an eligible entity. The applicant also must not have been a Portuguese resident in the previous five years, and must apply by 15 January of the year after becoming resident. PwC also states that foreign pensions are excluded from the exemption. On that description, a retired heir who lives on trust income does not meet the job test.
So the ordinary rules are the ones to look at. Portugal counts a person as resident after more than 183 days in any 12-month period, or when the person keeps a habitual home there. A resident pays tax on worldwide income. The top rate for 2026 is 48% over EUR 86,634, plus a solidarity rate of 2.5% over EUR 80,000 and 5% over EUR 250,000.
| What arrives | What the sources show |
|---|---|
| Trust income paid to a resident | Investment income, taxed at 28% flat. The rate is 35% if the trust sits in a place Portugal sees as a more favourable tax regime. The heir may elect the ordinary scale instead, which goes to 48% plus the solidarity rate. |
| Trust principal when the trust ends | No income tax for a beneficiary who did not set the trust up. A 10% stamp tax applies as for a gift, and assets outside Portugal do not attract it. |
| An inheritance or gift | Stamp tax at 10%, with an extra 0.8% on gifts of property. |
| Net wealth | No net wealth tax. |
The two trust rows come from a Portuguese law firm's article dated October 2022, so we count them as tier C. The article's date means later changes to the law are not in it. The stamp tax and the top rates come from PwC, tier B. PwC's page does not list exemptions for the 10% stamp tax or say who pays it.
You might say: "A friend told me Portugal gives foreigners a low rate." That was the older scheme, and it closed to new applicants in 2024. The newer one is tied to work. An heir who does take a qualifying job may be a different case from the one in this piece, and the scheme's own pages are where that is decided.
You could add up three lines for your heir: the 28% on trust income, the 10% stamp tax if the trust ends, and the 183-day test. You could also ask whether the trust sits in a place Portugal treats as favourable, since that moves the rate from 28% to 35%.
Family matters here too. A spouse who works in Portugal may sit in a different box from the daughter who does not. A trustee used to US or Canadian beneficiaries may want to know when the trust is due to end, since the stamp tax is tied to that moment.
Has anyone in your family moved to Portugal in the last two years, and what did the tax office tell them about trust income? Share it here. Another family may be deciding between Lisbon and a place with no day count.
Figures are estimates for planning, based on public data. Date read: October 2026.
Sources
- PwC Tax Summaries, Portugal pages on rates, residence, the newcomer scheme and stamp tax (B)
- LVP Advogados on Portuguese taxation of trusts, October 2022 (C)
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