Inheritance law in Portugal for expats: forced heirs, wills, 10 % stamp duty

• Forced heirs: spouse, descendants and ascendants are entitled to a reserved share (legítima) — two thirds of the estate when a spouse and children inherit together (Civil Code art. 2159.º); a will can only dispose of the rest
• No inheritance tax, but stamp duty of 10 % on the assets located in Portugal — from which the spouse or civil partner, children, grandchildren and parents are exempt (Código do Imposto do Selo, art. 6.º e))
• Your own law, if you say so: under EU Regulation 650/2012 a foreign resident may choose the law of their nationality to govern the whole succession, in a will; otherwise the law of the last habitual residence — Portuguese law — applies
• Three months: the death and the assets are declared to Finanças by the end of the third month after the death (CIS art. 26.º)

An expat who dies in Portugal leaves behind two questions that most families discover in the wrong order: which country’s law says who inherits, and what Portugal taxes. The first is decided by an EU regulation and, if you want, by a line in your will; the second by the stamp-duty code, which is gentler than most inheritance taxes but not free for everyone. Here is the map.

Which law governs your estate

Since 17 August 2015, Regulation (EU) 650/2012 applies in Portugal to every succession with a cross-border element. Its default rule (art. 21) is that the law of the State where the deceased had habitual residence at death governs the succession as a whole — a Briton, an American or a Brazilian who lives in Portugal is, by default, succeeded under Portuguese law, for property everywhere, subject to what non-EU countries accept. The exception (art. 22) is a choice of law: anyone may choose the law of a State whose nationality they hold, at the time of the choice or of death, “expressly in a declaration in the form of a disposition of property upon death” — a will. The chosen law then governs everything the regulation lists (art. 23): who the beneficiaries are, their shares, the rights of the surviving spouse, the power to disinherit, the reserved shares.

That single clause is the most valuable sentence an expat can put in a will. Without it, Portugal’s forced-heirship rules apply to your estate; with it, a British or American national keeps the freedom of their own law to leave the estate as they wish. The choice does not change the tax: Portugal taxes what is in Portugal under its own rules whatever law governs the succession.

Portuguese succession law, if it applies

Who inherits without a will (art. 2133.º): first the spouse and the descendants; then the spouse and the ascendants; then siblings and their descendants; then other relatives to the fourth degree; finally the State. A divorced or judicially separated spouse is not called. Between spouse and children the estate is divided per head, but the spouse’s share can never be less than a quarter (art. 2139.º); without a spouse, the children share equally.

Forced heirs (arts 2156.º–2159.º). The legítima is “the portion of assets of which the testator cannot dispose, because it is legally destined to the forced heirs”: the spouse, the descendants and the ascendants. Spouse and children together are entitled to two thirds of the estate; the spouse alone, with neither descendants nor ascendants, to half; children alone to half if there is one child, two thirds if there are two or more. A will that ignores those shares is not void — it is reduced to the disposable portion, one third when spouse and children survive.

De facto partners (união de facto) are not heirs under the Civil Code. They have the right to remain in the family home for a period and to certain benefits, but not a share of the estate; a partner who should inherit must be named in a will, within the disposable portion. Marriage or a choice of foreign law changes that arithmetic.

Wills in Portugal

A will is a unilateral, revocable act by which a person disposes of all or part of their assets for after death (art. 2179.º). Minors cannot make one (art. 2189.º). Portuguese law knows two ordinary forms (art. 2204.º): the public will, written by a notary in the notary’s book (art. 2205.º) — the form we recommend, because it is kept and found —, and the closed will, written and signed by the testator and approved before a notary (art. 2206.º). A will made abroad in the form of the country where it was made is recognised in Portugal; a foreign will covering Portuguese property must be translated and, where required, apostilled at the time of the succession.

A Portuguese will can be limited to assets in Portugal and state the choice of law for the succession as a whole; ask the notary to record the choice of nationality law expressly, in the words of art. 22 of the regulation, if that is your intention.

What Portugal taxes: stamp duty at 10 %, with exemptions

Portugal abolished inheritance and gift tax in 2004 and replaced it with stamp duty. Transfers on death are charged under verba 1.2 of the General Table at 10 % of the value of the assets located in Portugal — property at its tax value (VPT), bank balances, shares, vehicles. The exemption (art. 6.º, n.º 1 e)) covers the spouse or civil partner, the descendants and the ascendants: for the great majority of family successions the duty is zero and only the declaration remains. Siblings, nephews, cousins, friends and unmarried partners without a recognised union pay the 10 %. Life-insurance payouts, pension funds and retirement-savings plans (PPR) are outside the tax (CIS art. 1.º, n.º 5).

The procedure after a death, in order

Two situations we see often

A couple of British nationals, resident in Portugal, with a house here and children in the UK. Without a will, Portuguese law applies: the children and the surviving spouse share, with two thirds reserved. With a Portuguese will choosing English law, each spouse can leave everything to the other; stamp duty is nil either way because spouse and children are exempt.

An unmarried couple, one Portuguese, one American, no children. Under Portuguese law the partner is not an heir: the parents (ascendants) inherit, and the partner would pay 10 % on anything received by will beyond the reserved share. A will naming the partner, within the disposable portion, plus a recognised união de facto for the exemption — or marriage — changes the outcome.