‘It’s not the job, it’s the taxman,’ Mark whispered.
Her forkful of food stopped halfway to her mouth. ‘The Portuguese taxman is going to supplement our income?’
He put down his own cutlery. ‘Well, both the British and the Portuguese, but yes, that’s about the size of it.’
Without interrupting, she let Mark outline the plan, or “our new adventure” as he referred to it. The route to financial security relied upon them selling their London and Devon houses. She could cope with selling the gorgeous house inCroyde built on the cliff road with a long terrace facing the sea, but selling Ovington Square would be a wrench. Mark explained that it wasn’t as simple as just selling up; there was a wrinkle. A few years ago, they’d claimed a cottage in Devon – owned since before they were married – as their principal private residence, avoiding tax when they sold it. That little wheeze meant their London house was a second home, and the taxman’s axe would slice off a third of the proceeds. But they’d never intended to sell it.
‘Portugal has a little-known tax loophole called the non-habitual residence scheme – the NHR. It’s totally legit. Avoidance, not evasion,’ he explained.
‘That doesn’t make it right.’ There was a note of concern in Emily’s voice.
He slid a brochure across the table.
Portugal’s ‘non-habitual residents’ (NHR) scheme offers preferential tax treatment to new residents for their first 10 years in the country. If employed in Portugal in a ‘high value’ activity, your tax rate is set at an attractively low 20%. The scheme also allows you to receive some foreign income tax-free.
‘That means virtually no tax from the UK, or Portugal.’ His voice rose, bubbling with excitement. ‘Once we are on the NHR, we can sell Ovington Square tax-free, which saves us £2 million of capital gains tax. We can tell everyone that, with Alex grown up, we’re downsizing and buying somewhere smaller.’
Emily didn’t mind downsizing. She wasn’t sure about dodging the tax bill – Alex would hate the idea – but neither did she want to part with that much money.
Mark salved her conscience, saying, ‘The rules aren’t meant to catch Ovington Square. It’s our home. If we’d paid a hundred grand in tax on the Devon cottage, we wouldn’t have to pay tax when we sell London.’
That made her feel better. They were just finding a way ofescaping a whopping tax bill they shouldn’t be paying in the first place and wouldn’t be facing if Mark hadn’t been fired. And he didn’t deserve to be fired.
‘Let me get this straight. The goal is to sell our home tax-free and then come home to a slightly smaller house, still in Knightsbridge, and I can live the same way as I do now, and we won’t be doing anything dodgy?’
‘Yes.’
‘But until we come back, what do we live off? You say our basic costs are ten grand a month, but I must blow an additional ten.’
He coughed a laugh. ‘Sometimes more than that! I’m going to take on a couple of noddy roles.’
‘Noddy?’
‘Sorry, slang, non-executive directorships.’
‘Will that fund our current lifestyle?’ she asked, eyebrows raised.
‘Not on their own, no.’
‘So, what will?’
He sat back, a confident expression on his face. ‘Simple. Until it sells, we rent out Ovington Square, just like Croyde.’
Her bottom lip quivered. ‘No! Not London. Where would we live?’
He pulled something from his jacket pocket, beaming at her. ‘I’m buying this house for you. It will drain our entire reserve fund though.’
She took the page, unfolded it. ‘Wow,’ she said, her gaze bouncing back and forth between the pictures and him.
‘It’s got two acres of garden,’ gushed Mark, ‘all fenced off for your dogs. It’s next door to a tennis club, and it’s in the heart of what the estate agents call the golden triangle.’
There were four bedrooms, all with en-suite bathrooms – two upstairs and two on the ground floor – a small study, outdoor pool, built-in barbeque surrounded by terraces, manicuredlawns, flower beds bursting with colour. Every photo showed blazing sunshine. She shivered at the thought of all that heat. This would be fine. She could just base herself in Portugal, come home whenever she wanted to.
‘Boyo, this is stunning!’
‘She comes fully furnished, so we can move straight in. The sellers are even leaving the linen!’
‘Not so sure about that idea.’ She wrinkled her nose. ‘I don’t want to pack up the London house, it’s our home.’
