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Disregarded Income for Non-Tax Residents

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    Disregarded Income for Non-Tax Residents

    Hi,

    I'm planning on becoming a non-tax resident in the UK from next year. I will continue working through my limited company in the UK. I know the rules for becoming non-tax residents are quite complex, but I think I will be able to meet the tests.

    My question is, what does the "Disregarded Income" rule mean for dividends? Will they be excluded from taxation? How does this rule impact my take-home pay?

    #2
    The director of a UK company must be resident in the UK. How will you get round that?

    If you earn income, as a non-UK tax resident, on dividends from a UK company, they'll be subject to the tax regime of your home country. I own shares in US companies - due to tax treaties, I get a rebate on my tax return from tax deducted by foreign entities. Same would apply if I had UK shares. I'm just waiting for the the UK to hit rock bottom before hoovering up.
    Down with racism. Long live miscegenation!

    Comment


      #3
      Originally posted by NotAllThere View Post
      The director of a UK company must be resident in the UK. How will you get round that?

      If you earn income, as a non-UK tax resident, on dividends from a UK company, they'll be subject to the tax regime of your home country. I own shares in US companies - due to tax treaties, I get a rebate on my tax return from tax deducted by foreign entities. Same would apply if I had UK shares. I'm just waiting for the the UK to hit rock bottom before hoovering up.
      Thanks for the reply. I really don't care if I will work with a UK-registered company or a company registered in my country. As long as I can establish my status as non-tax resident in the UK it's all good. Will it be possible to switch to such a setup? I mean to work with a foreign-registered company in the UK?

      I'm in the same position. This Brexit bull*hit is getting too much for me now. I came to this country to earn money, nothing else nothing more. And it seems to me things will get worse for the next 5-10 years.

      Comment


        #4
        If you are actually traveling to and working in the UK, then even if you are non-resident i.e. spending less than 183 days, this will be taxed in the UK.

        Non-residents are not exempt from tax, they are taxed on UK sourced income and not taxed on foreign income. Residents are taxed on worldwide income.

        HMRC UK residence and tax

        Non-residents only pay tax on their UK income - they do not pay UK tax on their foreign income.
        I'm alright Jack

        Comment


          #5
          Originally posted by BlasterBates View Post
          If you are actually traveling to and working in the UK, then even if you are non-resident i.e. spending less than 183 days, this will be taxed in the UK.

          Non-residents are not exempt from tax, they are taxed on UK sourced income and not taxed on foreign income. Residents are taxed on worldwide income.

          HMRC UK residence and tax
          I'm aware of that, that's why I'm asking about 'disregarded income', which includes dividends and income form interest rates. They seem to treat dividends in a different way for non-tax residents.

          Comment


            #6
            Originally posted by skysies View Post
            Thanks for the reply. I really don't care if I will work with a UK-registered company or a company registered in my country. As long as I can establish my status as non-tax resident in the UK it's all good. Will it be possible to switch to such a setup? I mean to work with a foreign-registered company in the UK?

            I'm in the same position. This Brexit bull*hit is getting too much for me now. I came to this country to earn money, nothing else nothing more. And it seems to me things will get worse for the next 5-10 years.
            What BB said. I live in Switzerland. My company is a Swiss GmbH. When working remotely, I just invoiced my client, no VAT. When I worked in the UK through my company, I was liable to pay personal tax on any income arising from that work. My company was also liable to pay tax on any profit arising from the work. Back then, it was possible to reduce the personal income below the tax threshold, and then ensure the company made no profit. Nowadays -probably not worth the risk.
            Down with racism. Long live miscegenation!

            Comment


              #7
              Originally posted by skysies View Post
              I'm aware of that, that's why I'm asking about 'disregarded income', which includes dividends and income form interest rates. They seem to treat dividends in a different way for non-tax residents.
              You need to be careful, these dividends are earned as a direct result of your work. This is not the same as dividends distributed from a UK company you happen to own. I would be very wary.
              I'm alright Jack

              Comment


                #8
                Originally posted by NotAllThere View Post
                The director of a UK company must be resident in the UK. How will you get round that?
                That rule...I believe you can be a non-resident and still be a director of a UK company...

                Comment


                  #9
                  Originally posted by NotAllThere View Post
                  The director of a UK company must be resident in the UK. How will you get round that?

                  If you earn income, as a non-UK tax resident, on dividends from a UK, they'll be subject to the tax regime of your home company. I own shares in US companies - due to tax treaties, I get a rebate on my tax return from tax deducted by foreign entities. Same would apply if I had UK shares. I'm just waiting for the the UK to hit rock bottom before hoovering up.
                  Do they? From A guide to forming a UK company as a non-UK resident | Companies Made Simple

                  • Register a director: there must be at least one person over 16 responsible for running the company — they do not have to be a UK resident.
                  This The perils and pitfalls of non-UK resident directors | Tax Adviser shows that it's not as simple as just being abroad - the UK want tax on the work you do as a director of the UK firm.
                  Last edited by eek; 22 December 2019, 18:46.
                  merely at clientco for the entertainment

                  Comment


                    #10
                    Originally posted by eek View Post
                    Do they? From A guide to forming a UK company as a non-UK resident | Companies Made Simple



                    This The perils and pitfalls of non-UK resident directors | Tax Adviser shows that it's not as simple as just being abroad - the UK want tax on the work you do as a director of the UK firm.
                    Again, I'm interested in knowing what the tax on the DIVIDENDS will be. It seems the dividends are treated in a different way. The income tax on the salary should be paid in the UK. I get that.

                    Comment

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