There is no inheritance tax

This surprises people arriving from countries where estates are heavily taxed. Portugal abolished inheritance and gift tax. What remains is stamp duty on gratuitous transfers, charged under heading 1.2 of the General Stamp Duty Table at 10%.

Ten per cent, with no progressive scale and no rate that climbs with the size of the estate. And for most families it is not charged at all.

Close family pays nothing

Article 6(1)(e) of the Stamp Duty Code exempts the spouse or civil partner, descendants and ascendants from stamp duty on transfers falling under heading 1.2. In practice that covers the great majority of estates: a surviving spouse, the children, and the parents.

Descendants and ascendants are not limited to one generation. The tax authority confirms expressly that transfers between grandparents and grandchildren are exempt under the same provision.

Who is not exempt: siblings, nephews and nieces, cousins, unrelated friends and partners who are neither married nor registered as living in a civil partnership. Those pay the 10%. If your estate plan leans on a sibling or an unmarried partner, that is the case worth modelling.

One limit to keep in view: the exemption covers heading 1.2 only. It does not extend to the separate charge under heading 1.1.

Only what is in Portugal

This is the rule that matters most to foreigners and the one least often explained. Article 4(3) of the Stamp Duty Code provides that on gratuitous transfers the tax is due whenever the assets are situated in national territory.

The connecting factor is the location of the asset, not the residence or nationality of anyone involved. A British couple resident in the Algarve who inherit a house in Yorkshire owe no Portuguese stamp duty on it. A Portuguese resident inheriting a French portfolio held with a French bank is in the same position. Portugal is not reaching for foreign assets in an estate.

Article 4(4) defines what counts as situated here:

• rights over immovable and movable property located in Portugal;
• movable property registered in Portugal;
• credit rights where the debtor resides here and the beneficiary is domiciled here;
• shareholdings in companies with their seat in Portugal, where the acquirer is domiciled here;
• monetary values and crypto assets deposited with Portuguese institutions;
• industrial property rights registered in Portugal.

The crypto limb is worth noting, because it turns on where the asset is deposited. Crypto held with a Portuguese institution sits inside the rule; the same holding on a foreign exchange does not.

What falls outside the charge entirely

Several common assets are not caught even when they are Portuguese, according to the tax authority's own guidance on the filing:

• life insurance proceeds;
• pensions and benefits paid by social security systems, including death benefits;
• amounts in retirement savings plans (PPR), education savings plans, share savings plans and pension funds;
• transfers in favour of corporate income tax payers, even where those are themselves exempt.

Life insurance and retirement plans falling outside the charge is a structural point, not a loophole, and it is one reason those wrappers appear in Portuguese estate planning.

The filing that catches people out

Exemption from the tax is not exemption from the paperwork. Where there is a gratuitous transfer on death and there are assets situated in Portugal, the Modelo 1 ISTG filing is compulsory. The form itself has a field marking each heir as exempt or subject, which tells you plainly that exempt heirs are expected to appear on it.

The deadline is short and it runs from the death, not from the grant of probate or any equivalent abroad: the end of the third month following the month of death. The tax authority describes these deadlines as non-extendable, save on proof of justified reason, in which case the head of the tax office may grant a postponement of up to 60 days.

The one case where nothing is due: the leaflet is explicit that if the deceased left no assets, the filing and the related obligations do not arise. No Portuguese assets, no Portuguese filing.

Who files, and the tax number nobody expects

The obligation falls on the cabeça de casal, the head of the estate, a role assigned in the order set by Article 2080 of the Civil Code: the surviving spouse if an heir or entitled to a share of the marital property; then the executor; then legal heirs by proximity of degree; then testamentary heirs; among equals, whoever lived with the deceased for more than a year; and finally the eldest.

Before the filing can be submitted at all, the estate needs its own tax number, a NIF de Herança Indivisa for the undivided estate. Only the head of the estate can request it, and doing so requires the details of the deceased and of every heir. Foreign families are routinely caught by this sequencing: they arrive at the filing deadline without having applied for the number that the filing depends on.

Where the head of the estate is non-resident, the request goes through the authority's e-balcão channel, submitted by their fiscal representative, with the estate tax number form, identification documents for the head of the estate, the deceased and all heirs, and the death certificate.

What this does not decide

Portuguese tax law says what is taxed. It does not say who inherits. Which law governs the succession, what a will achieves, and what shares are reserved for particular family members are questions of civil law, and for cross-border estates they can turn on choices made while the person was alive. Those questions belong with a lawyer, ideally before rather than after. What we do is the Portuguese tax and filing side, alongside them.

Frequently asked questions

Does Portugal have inheritance tax?

No. Inheritance and gift tax was abolished. What applies is stamp duty at 10% under heading 1.2 of the General Stamp Duty Table, and close family is exempt from it.

Do my children pay tax on what they inherit from me in Portugal?

No. Article 6(1)(e) of the Stamp Duty Code exempts the spouse or civil partner, descendants and ascendants. The tax authority confirms the exemption also covers transfers between grandparents and grandchildren.

Who does pay the 10%?

Heirs outside that circle: siblings, nephews and nieces, cousins, friends, and partners who are neither married nor in a registered civil partnership.

I live in Portugal and inherited a house abroad. Do I pay Portuguese tax?

No. Under Article 4(3) of the Stamp Duty Code the charge on gratuitous transfers arises only where the assets are situated in national territory. The residence and nationality of the deceased and of the heirs do not extend it to foreign assets.

Is crypto included?

It depends where it sits. Article 4(4) treats monetary values and crypto assets deposited with Portuguese institutions as situated in Portugal. The same holding on a foreign platform is not caught by that limb.

If we are exempt, do we still have to file anything?

Normally yes, where there are assets in Portugal. The Modelo 1 ISTG form marks each heir as exempt or subject, so exempt heirs are expected on it. If the deceased left no assets, the filing does not arise.

What is the deadline?

The end of the third month following the month of death. The tax authority treats it as non-extendable except on proof of justified reason, where the head of the tax office may allow up to 60 further days.

What if the head of the estate lives abroad?

The estate's tax number is requested through the e-balcão channel by their fiscal representative, submitting the estate tax number form, identification for the head of the estate, the deceased and all heirs, and the death certificate.

Sources

• Stamp Duty Code, Article 4(3) and (4) — territoriality of gratuitous transfers and the assets treated as situated in Portugal.
• Stamp Duty Code, Article 6(1)(e) — exemption for spouse, civil partner, descendants and ascendants.
• General Stamp Duty Table, heading 1.2 — the 10% rate on gratuitous transfers.
• Portuguese Tax and Customs Authority, leaflet "Participação do Imposto do Selo — Óbito" — who files, the estate tax number, the third-month deadline and the 60-day postponement, the non-resident procedure, and the assets outside the charge.
• Civil Code, Article 2080 — who holds the office of head of the estate.

Written on 4 September 2026. General information rather than advice on your estate. Whether a particular asset is situated in Portugal, and whether an heir falls inside the exemption, depend on facts this page cannot see.