non-resident director and contractor.

[thomast]

After living in the UK for almost 14 years, my family and I have moved to India during 2014. I continue working as a contractor for my UK client, but my time is split between India and UK. I work remotely while I am in India. For example, during the financial year 2015-16 I will be spending 8 months in India and 4 months in UK. I have agreement from my client for this arrangement. Since my family is now in India I intend to continue this way of working for the foreseeable future. When my current contract ends, I will only take up another contract that would allow this flexibility of remote working.

I wish to know how this change of my circumstances affect my limited company operations and my tax position. For now, the questions I have in mind are

1) Do I have to declare myself to HMRC as a non-resident director? What are advantages or disadvantages of doing so? Are there any tax advantages for being a non-resident director?

2) Can my wife continue to be an employee of my UK limited company and can I continue to pay her salaries and dividends?

[sal]

Have you asked your accountant? It's prudent to do so before, not after the fact such as moving back to India...

[northernladuk]

Does she actually do any work for you company or are you just using her as a tax mule?

As Sal says you need professional advice. We are mainly UK contractors so probably won't have a clue, particularly when there are complexities with your wife involved.

[BlasterBates]

Basically your company is operating in India and the UK. The fact that you are working in India remotely will probably have tax implications there. Firstly there is company taxation and registration issues, and there is personal taxation. It is complicated and you will need an Indian and a UK accountant.

If the Indian authorities query your UK income, knowing that you're resident in India but travelling regularly and working in the UK they may ask specific questions about how much time you spend in the UK, and in India, and if they did they might want some sort of proof, eg plane tickets, hotel bills. So you need to be prepared for that, or enquire with your local accountant, i.e. don't assume you simply tell them this is a UK company with UK income, they might look further.

If you are not resident in the UK you will be obliged to prove it to them, again you wll need plane tickets and proof of your stay in India. Don't expect them to simply accept it because you tell them.

Basically tax authorities assume you are taxable on all your income and it's up to you to prove to them you're exempt, not the other way round (unfortunately).

If this is a long term plan then best get the taxation sorted out so the UK and Indian tax authorities accept it.

Cross border working is a minefield and you can easily end up in hot water with one or the other tax authorities, expect to be put through the mill at some point and do get professional advice.

[meridian]

non-resident director and contractor.

WBBS.

You'll need more specialised advice so if your accountant is not familiar with cross-border working you will need to consider changing.

Some things to consider:
- your Company and yourself are separate legal entities, will the company continue to be resident in the UK?
- if so, where will the registered address be? You could hold this at your accountant's if need be, but what are the implications on Head Office, trading location, etc?
- if not, what does the Agency say about the move of the company abroad? (If you have one)
- when you receive dividends you may be non-resident, but what are the implications of paying them into a UK bank account?
- are you a UK citizen, or non-European? This has implications on whether you are Domiciled or not.
- is there a double-tax treaty between India and the UK? What are the rules on tax residency in each country, are they the same or are there differences to either be aware of or exploit?

Etc.