Dividends tax, living outside of the UK?

**Spikeh** · 27 February 2018, 13:50

Originally posted by infosec View Post

Firstly, in the nicest way possible, my accountants are rubbish so please don't advise me to ask them ;-)

<advice>
Before reading or posting anything else... get yourself a better accountant.
</advice>

**northernladuk** · 27 February 2018, 13:55

They are rubbish and you are continuing to pay them why?

**Spikeh** · 27 February 2018, 13:57

Originally posted by infosec View Post

If the answer is that I won't have to pay the dividends tax from April this year, then I can issue the £200k dividend then, and continue as normal...

There is absolutely no way that you'll get away without paying tax due on that money - wherever you earn it.

I don't imagine HMRC would let you legitimately run a UK business if you live and (more importantly) carry the work out in another country; WHERE you do the work is the important factor - I have worked with companies based in the EU and US, but done the work from my UK home. In this instance, the tax is dealt with by the UK tax system. The only variation has been VAT - you don't charge clients outside of the UK VAT - but that also varies depending on country.

If you are resident outside of the UK (you'll need to find the definition of this as I'm not an expert) you probably won't be allowed to take advantage (!) of the UK tax system, unless you perform the work in the UK.

**Lance** · 27 February 2018, 15:09

Originally posted by infosec View Post

Firstly, in the nicest way possible, my accountants are rubbish so please don't advise me to ask them ;-)
I would however appreciate some of your battle hardened opinions on my situation please:

After 15+ years in the UK as a contractor I've moved to another European country, the current tax year is my 'cross over' year where I have lived in both the UK (2.5 months) and my new country.
From April 6th I'll only be living in my new country with the very occasional UK visit for a few days.
My new country has a tax system where I don't need to pay any tax on foreign earned dividends which I qualify for.

I'm the sole director of a UK limited company and understand I'll still have to do a UK tax return as a result.
I have £200K+ available for withdrawal as dividends.
I'd like to get the £200k+ out of the UK Ltd company in the most tax efficient manner possible.
I appreciate options around pensions, MVL/Entrepreneurs Relief etc

I shall continue to consult worldwide outside of the UK and need a company structure to do so.
So I could retain my UK limited company or go for Estonian e-residency and a company there for example.

What I can't get a straight answer to is, and any thoughts are appreciated:
Do you have to pay UK dividends tax if your not living or tax resident in the UK?
Is it a tax on a dividend being issued or a tax on a UK tax resident receiving a dividend?

Once I'm through the cross over year and no longer have any time/ties in the UK I'm unsure if using a UK limited company still leaves me paying the UK dividend tax. So is this a good way to continue to operate?
(credibility wise it's better to have a UK company in my situation is part of my thinking )

If the answer is that I won't have to pay the dividends tax from April this year, then I can issue the £200k dividend then, and continue as normal....

Thoughts welcome...

A foreign country that doesn't require you to pay tax on dividend income? Where is this utopia?
Are you sure they'd count as 'foreign earned' if you paid yourself whilst tax resident there? I doubt it.

Are you sure you can keep a UK company to contract globally? What customers do you believe would allow this?

You ask "Is it a tax on a dividend being issued or a tax on a UK tax resident receiving a dividend?" - it's the latter, although the taxable entity isn't necessarily an individual (look at pension funds).

I don't know for sure but I think you're dreaming and an MVL is probably going to be the most tax-efficient.

**infosec** · 27 February 2018, 15:28

Such a beautifully hostile forum this, feel the love....

**Spikeh** · 27 February 2018, 15:36

Originally posted by infosec View Post

Such a beautifully hostile forum this, feel the love....

I'd say its more passive aggressive.

**jamesbrown** · 27 February 2018, 15:43

There's a five-year rule on dividends. Put simply, if you become non-resident, but return to the UK within five years, you'll be taxed on dividends taken during that period as though you'd taken them in the year of return. It isn't quite that simple, because it depends on your residency status prior to leaving, but that's the gist. This anti-avoidance measure applies to several other forms of tax too.

**Lance** · 27 February 2018, 15:50

Originally posted by Spikeh View Post

I'd say its more passive aggressive.

except in General

**WTFH** · 27 February 2018, 15:52

I'd say that your accountants aren't bad, they just aren't giving you the advice you want to hear.

If you're expecting "take the 200k+ out of your business account, pop it into your personal account and leave the country", that wouldn't be the correct thing for them to say.

What country have you moved to?
Have you actually moved there yet?
In a previous thread, you were asking advice on where to move to, so I'm suspecting you haven't actually moved anywhere yet. Would I be right?

You mention Estonia. You know that e-residency isn't the same as being tax resident there? And if you do set up a company there, you'll pay 20% CT on dividends?

Maybe a bit of honesty from you might mean you'll get better answers on here.

Dividends tax, living outside of the UK?