Inheritance Tax in Portugal for Foreign Heirs: Stamp Duty, Exemptions and Deadlines

Portugal does not have a separate tax formally called "inheritance tax". Instead, certain transfers on death fall under Portuguese Stamp Duty, Imposto do Selo.

For many immediate family members, no 10% Stamp Duty is payable because Portuguese law provides a family exemption. But the inheritance can still have to be reported to the Portuguese Tax Authority.

For a foreign heir, the right starting point is not nationality. It is:

• 1. which assets are within the Portuguese Stamp Duty rules
• 2. what relationship the beneficiary had to the deceased
• 3. whether a statutory exemption applies
• 4. what value must be reported
• 5. whether the filing deadline has been met

The basic rule

A gratuitous transfer on death can fall under item 1.2 of the Portuguese Stamp Duty table.

Where the transfer is taxable and no exemption applies, the rate is 10%.

That does not mean Portugal automatically charges 10% on every asset in a deceased person's worldwide estate.

The Portuguese Stamp Duty Code uses territoriality rules to determine which assets are treated as situated in Portugal for this purpose. Those rules differ according to the type of asset.

Who is exempt from the 10% Stamp Duty?

The current exemption covers:

• spouse
• de facto partner
• descendants, such as children and grandchildren
• ascendants, such as parents and grandparents

The exemption is attached to the beneficiary's relationship with the deceased.

It is not limited to Portuguese citizens.

So a child living in another country does not lose the family exemption simply because the child is a foreign national or non-resident.

But exemption from payment does not automatically mean exemption from reporting.

Portuguese tax law still requires the gratuitous transfer to be participated where the reporting obligation applies.

Who can have to pay 10%?

Beneficiaries outside the exempt direct-family categories can be subject to the 10% Stamp Duty on taxable Portuguese-situs assets.

The Portuguese Tax Authority gives examples such as:

• brothers and sisters
• nephews and nieces
• unrelated beneficiaries

A beneficiary under a will is not automatically exempt merely because the deceased deliberately left that person an asset.

You therefore need to separate two questions:

Do I inherit?

and

Is my acquisition exempt from Portuguese Stamp Duty?

Those are different legal questions.

Does Portugal tax a foreign heir's worldwide inheritance?

Not automatically.

For gratuitous transfers, Portuguese Stamp Duty depends on whether the asset is treated as situated in Portugal under the Stamp Duty Code.

Some examples are straightforward.

Portuguese real estate

Rights over real estate situated in Portugal fall within the Portuguese territorial connection.

Money deposited with a Portuguese financial institution

Portuguese-situs rules can bring monetary values deposited with an institution established in Portugal into the Portuguese Stamp Duty analysis.

Registered movable assets

Assets registered or subject to Portuguese registration can also fall inside the Portuguese rules.

Other categories require more care.

Shares, quotas, credits and other patrimonial rights have specific statutory situs tests. A connection with a Portuguese company or debtor is not always the only condition in the rule.

For an international estate, do not use a one-line test such as "Portuguese asset equals Portuguese tax". Classify each asset under the actual Stamp Duty territoriality rule.

What is outside the Portuguese Stamp Duty base?

The Code also excludes certain categories from the gratuitous-transfer charge.

The current exclusions include specified categories such as:

• certain life-insurance claims
• some social-security death benefits
• specified retirement and savings products
• certain pension and investment-fund values
• personal or domestic-use property within the statutory exclusion

The exact treatment should be checked against the asset itself.

This is another reason that "10% of the inheritance" is not an accurate general formula.

Is there also a 0.8% tax on inherited Portuguese real estate?

The additional 0.8% Stamp Duty commonly discussed in property transfers should not be automatically added to an inheritance calculation.

Under the current Stamp Duty table, item 1.1 applies the 0.8% charge to onerous acquisitions or donations of rights over real estate.

The 10% gratuitous-transfer charge sits under item 1.2.

For a transfer by death, do not simply import the donation rule and tell an heir that an inherited property always carries both 10% and 0.8%.

The correct inheritance analysis starts with item 1.2, the applicable exemption and the statutory taxable value.

When must the death be reported?

Where the deceased left assets that have to be reported in Portugal, the death and Stamp Duty participation must generally be filed by the end of the third month following the month in which the death occurred.

Examples:

• death in January: deadline at the end of April
• death in March: deadline at the end of June
• death in October: deadline at the end of January of the following year

The relevant person is normally the cabeça-de-casal of the inheritance.

Living abroad does not extend the Portuguese statutory filing period.

What is filed with the Portuguese Tax Authority?

The Stamp Duty participation identifies the succession and the people involved and is accompanied by the required estate information.

The official workflow can require:

• death certificate
• identification of the deceased
• NIF of the deceased
• identification of the heirs
• NIFs of the heirs
• identification of the family relationships
• will or other succession evidence where relevant
• relationship of assets
• values required for tax purposes

The purpose is not simply to "pay inheritance tax". The filing establishes the Portuguese tax picture of the succession, including where the beneficiaries are exempt.

What is the NIF da Herança Indivisa?

An undivided inheritance can receive its own Portuguese tax number, the NIF da Herança Indivisa.

This is not the deceased's old NIF and it is not one of the heirs' personal NIFs.

The Portuguese Tax Authority currently provides a digital request route for the cabeça-de-casal.

Where the cabeça-de-casal is non-resident and has a fiscal representative, the representative can request the estate NIF through the dedicated e-balcão route with the required form and supporting documents.

For an international estate, it is therefore useful to map three different identities:

• the deceased
• each heir or beneficiary
• the undivided estate

Do not treat them as interchangeable.

Does an exempt child still have to file?

The estate can still have a reporting obligation even if the child, spouse or parent is exempt from paying the 10% Stamp Duty.

This distinction matters because foreign families often hear "children do not pay inheritance tax in Portugal" and incorrectly conclude that no Portuguese tax procedure exists.

A better formulation is:

Direct family can be exempt from the tax charge, but the Portuguese succession can still require tax reporting.

What if the deceased lived outside Portugal?

Residence abroad does not, by itself, remove Portuguese Stamp Duty issues if the estate contains assets that fall within Portuguese territoriality rules.

The competent Portuguese tax office and the situs analysis can depend on where the deceased, cabeça-de-casal, beneficiaries and assets are located.

For a foreign estate, the safest approach is to make an asset-by-asset Portuguese tax map instead of assuming that the entire foreign probate tax result carries over to Portugal.

What if another country also taxes the inheritance?

Portuguese Stamp Duty is only one part of a cross-border tax picture.

The country where the deceased lived, the country where the heir lives or the country where another asset is located can have its own inheritance, estate or beneficiary-level tax rules.

A Portuguese exemption does not mean another country will also exempt the transfer.

Likewise, a tax paid abroad does not automatically mean that no Portuguese filing is required.

The Portuguese side should be determined separately, then coordinated with foreign tax advice where necessary.

A practical inheritance tax checklist

1. Identify every Portuguese-connected asset

Separate property, cash, bank deposits, company interests, registered assets and other rights.

2. Apply the Portuguese territoriality rule

Do not assume every foreign asset belongs in the Portuguese return.

3. Identify each beneficiary

Tax treatment can differ between beneficiaries.

4. Check the relationship exemption

Spouse, de facto partner, descendants and ascendants are the key exempt family categories under the current rule.

5. Determine the reporting value

The taxable or reportable value is determined under Portuguese tax rules. Do not substitute an informal estimate.

6. Prepare the Modelo 1 inheritance filing

Include the required succession, heir and asset information.

7. Meet the third-month deadline

Do not postpone the tax file until the estate is finally divided or sold.

Common mistakes

"Portugal has no inheritance tax, so I do nothing"

Wrong. Portugal uses Stamp Duty and can still require a death/inheritance filing.

"I am a child, so no filing is needed"

The family exemption can remove the 10% charge without removing the reporting obligation.

"I am foreign, so I pay 10%"

Nationality is not the test for the family exemption.

"The deceased was foreign, so Portugal has no tax jurisdiction"

Portuguese assets can still fall within the Stamp Duty territoriality rules.

"All Portuguese assets use exactly the same situs rule"

They do not.

"Inherited real estate always means 10% plus 0.8%"

That confuses inheritance with the separate donation/real-estate rule.

Frequently asked questions

Is inheritance tax in Portugal really 10%?

The current Stamp Duty rate on a taxable gratuitous transfer under item 1.2 is 10%. Exempt family members do not pay that charge, and some assets are outside the charge altogether.

Are children exempt?

Descendants are within the current family exemption. Reporting can still be required.

Is a spouse exempt?

Yes, the current exemption covers a spouse. It also covers a de facto partner, descendants and ascendants.

Are siblings exempt?

They are not included in the direct-family exemption in Article 6(1)(e). If the Portuguese transfer is otherwise taxable, the 10% charge can apply.

Does a non-resident heir lose the exemption?

The statutory family exemption is based on the relationship category, not Portuguese nationality. Separate territoriality rules determine whether the asset is within the Portuguese Stamp Duty system.

Does Portugal tax assets outside Portugal?

The Stamp Duty Code applies statutory Portuguese-situs rules. Assets situated outside Portugal for these purposes are not automatically part of the gratuitous-transfer Stamp Duty filing.

When is the deadline?

Generally by the end of the third month following the month of death.

Need to clarify the Portuguese tax side of an international inheritance?

Send us the family relationship, country of residence of the deceased and heirs, and a list of the Portuguese assets you know about.

Our legal team can identify the Portuguese succession and tax procedures, coordinate representation before the relevant authorities and organise the supporting document file.