The New UK-Portugal Tax Treaty: What Actually Changed on 29 December 2025

The new double taxation treaty, which entered into force on 29 December 2025, changes tax rules for UK and Portuguese residents. Key updates include the removal of the UK personal allowance for Portuguese residents, which may increase UK tax liability for some, and a broadened definition of pensions under Article 17 that now explicitly covers personal pensions and lump-sum withdrawals as exclusively taxable in Portugal (subject to domestic Portuguese law). The treaty applies to taxes in Portugal from 1 January 2026, and in the UK from 1 January 2026 for taxes withheld at source and 6 April 2026 for income and capital gains tax.