Deferring dividends + Changing tax residency

[je vais a la plage]

Hi,

I got my first ever contract work in UK (yay!) and am trying to do a bit of tax planning. One idea is to simply defer paying myself, i.e.

• paying myself only what is needed to live on
• under a pessimistic view, assume that I wouldn't find another contract when this expires
• move back to my birth country, where there's no dividend tax, and pay out everything in the company as dividends (I have permanent residency in UK, but no ties otherwise.)

I'm guessing I'm not the first to come up with this. Not sure if there are any obvious issues? Are there any tax advisors you can recommend to run this by them?

[je vais a la plage]

Hm... not got a reply... Not sure if no one knows the answer, the answer is too obvious... or.. ?

[ASB]

Provided you have actually ceased to be tax resident in the uk that should be fine from the uk end. Ceasing to be tax resident may be harder than you think.

Returnin within 5 yearshas an impact. I.e. pay up.

[SeanT]

You may as well max out the 7.5% band and leave the rest in the company if you don't need more, whether going to another country or not, who knows what the tax rate will be in the future.

[Hobosapien]

Bear in mind that deferring dividends will only be tax efficient for so long. i.e. The tax is due for the tax year the dividend was declared within even if you don't actually receive payment personally until sometime in the future.

So deferring beyond a tax year boundary may cause issues with breaking into higher tax bands if you need more out later and don't declare them early enough.

[je vais a la plage]

It seems drawing a salary just below the NI threshold (8424 for 2018/19) and dividends within the lower limit (36,500) would be a good idea, even if I were to leave the country. Kinda maximizes the withdrawal from the company, and minimizes potential future taxation risks...

Okay, sounds like one thing checked off my list. Thanks guys!