Compare · Portugal vs United Kingdom
Portugal vs United Kingdom for Australians leaving home
Portugal and United Kingdom run the same headline regime, worldwide tax, so the decision turns on the details underneath: what each one does to capital gains, dividends and the Australian income you keep.
The treaty position splits them: United Kingdom has a full Australian tax treaty (tie-breaker plus withholding capped at 15% on unfranked dividends), while Portugal has none, no safety net if both countries claim you.
Portugal is the cheaper place to live day to day, roughly 65% of Sydney's basket against United Kingdom's 105% (indicative, ex-rent), which can outweigh a thinner tax saving over a full household budget.
Personalise this, enter your numbers once and every figure below becomes yours: “your estimated income tax: $14,200”, not “0, 22%”. Open the Country Comparison tool →
| 2 destinations | PortugalPortugal | United KingdomUnited Kingdom |
|---|---|---|
| Tax | ||
| Regime | worldwide, taxes worldwide income | worldwide, taxes worldwide income |
| Income tax on salary | Progressive 13, 48% plus solidarity surcharge above €80k. A €100k salary pays roughly 37% effective, Portugal is not a low-tax country for salaries. | Progressive 20/40/45% plus employee NI (8% then 2%). The £100k, £125k allowance taper creates a 60% effective band. A £120k salary pays roughly 36% effective with NI. |
| Capital gains | 28% flat on share gains (option to aggregate at progressive rates). Short-term gains on assets held <365 days must be aggregated at progressive rates for high earners. (28% typical) | 18% basic / 24% higher rate on shares and crypto, £3,000 annual exemption. FIG-regime arrivals: foreign gains tax-free for 4 years. (24% typical) |
| Dividends | 28% flat on dividends and interest, wherever sourced, with no AU treaty relief. | 8.75/33.75/39.35% above a £500 allowance. Australian franking credits are not recognised, but for FIG-regime arrivals, Australian dividends are simply outside UK tax for 4 years. |
| Interest | Taxed locally around 28% | Taxed locally around 40% |
| Crypto | Crypto held under 365 days is taxed at 28% on disposal; gains on crypto held longer than 365 days are exempt for individuals. Crypto-to-crypto swaps are generally not taxing events. Professional trading is business income at progressive rates. | Crypto disposals are CGT events at 18/24% with a small annual exempt amount (£3,000). Swaps and spending count. HMRC receives exchange data; FIG-regime arrivals can realise foreign crypto gains UK-tax-free in years 1, 4. |
| Australia tax treaty | No, full 30% / 10% withholding, no tie-breaker | Yes, AU withholding capped at 15% dividends / 10% interest, tie-breaker available |
| Social security | Employees pay 11% social security; the self-employed pay ~21.4% on a discounted base. Not included in the calculation above, budget for it. | Employee National Insurance (8% to ~£50k, 2% above) is excluded from the calculation above, add it for employment income. |
| Visa | ||
| Best pathways |
|
|
| Visa ease | 7/10 | 6/10 |
| Family on visas | Dependants covered on main pathways | Dependants covered on main pathways |
| Fastest timeline | ~4 months on the quickest pathway | ~2 months on the quickest pathway |
| Money | ||
| Rent (family home, monthly) | $4,200/mo | $6,500/mo |
| Rent (couple, monthly) | $2,600/mo | $4,200/mo |
| International school (per child/yr) | $18,000 | Free / local system viable |
| Health cover (family/yr) | $4,500 | $4,000 |
| Cost of living vs Sydney | 65% of Sydney (ex-rent) | 105% of Sydney (ex-rent) |
| Relocation one-off | ~$22,000 | ~$25,000 |
| Flights home (return, pp) | $2,600 | $2,400 |
| Life | ||
| Timezone vs AEST | 9h behind | 9h behind |
| Flight from Sydney | ~26 hours | ~22 hours |
| English | 6/10 | 10/10 |
| Safety | 9/10 | 8/10 |
| Healthcare | 7/10 | 8/10 |
| Schooling | 7/10 | 9/10 |
| Climate | Mild Atlantic climate, warm dry summers, wet 15°C winters in poorly heated homes. | Mild, grey and damp, the winters are dark more than cold, and Australians feel it. |
Costs, rates and visa figures are country-module data marked indicative until individually verified; FX and rental markets move constantly.
Honest downsides, side by side
Every destination hub on this site carries its downsides in the open. Here are both lists together, because the right question is rarely “which is better?” and usually “which set of problems would you rather live with?”
Portugal
- No Australia tax treaty: a contested residency year can leave the same income fully taxed in both countries with only messy unilateral credits between you and double tax.
- NHR is gone for new arrivals, the 20% IFICI successor is narrow, and most Australians will face full progressive rates up to 48% plus 28% on investments.
- Salaries and bureaucracy are Southern European: local pay is low, AIMA appointment backlogs are real, and everything official takes months.
- It is the single worst time zone on this list for keeping Australian clients, 9, 10 hours behind AEST means your overlap is their evening.
- Winter housing is genuinely cold and damp; central heating is the exception, not the rule.
United Kingdom
- This is a higher-tax country than Australia for most: 40% starts around A$100k equivalent, NI stacks on top, and the £100k, £125k taper creates a 60% zone with childcare cliff-edges.
- London costs Sydney money without Sydney weather, and the FIG honeymoon is exactly 4 years, after which worldwide taxation lands in full.
- Visa costs are the world's highest: fees plus the health surcharge can run £15, 20k for a family before anyone earns a pound.
- Winter darkness (8-hour days, weeks of grey) is the quiet reason many Australians go home.
Make this comparison yours
The table above shows the general figures. Enter your income and family once and the tax rows become your numbers, “your estimated income tax in Lisbon: $14,200”, not a range.