ii am a uk tax payer but if i am a the controlling shareholder of a hong kong ltd company and that company makes say 100,000 profit in a year (the company makes profits from uk investments)
but the company does not pay me any dividend or wages in that year do i have to pay any tax in the uk in that year from the earnings of that company.
thanks for any help
Replies (9)
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You only pay tax on your income. You only get income from a limited company if it pays you a salary or a dividend. You appear to have received neither.
Hold on a moment - what about TCGA 1992 s13?
Not nearly enough information in the question to conclude one way or the other - what a surprise.
Possibly not but if it is a venture you are seriously considering, you would be well advised to appoint an adviser - or two, as you will need to understand any obligations in HK.
If you are managing the company from the UK then I expect the profits will be brought onshore. Why a HK company? What advice have you already received?
Assuming these are revenue (income) & not capital profits, s720 ITA 2007 may be more relevant (unless motive test applies etc.).
On the assumption that the OP transferred the UK investments (or the means to acquire them) to the Hong Kong company, then I agree that ALL of the income of the Hong Kong company is taxable on the OP, under the ToAA legislation, unless the Hong Kong company is UK resident (and, therefore, liable to UK corporation tax), by reason of being managed and controlled from the UK.
I also agree that 51% of any gains that the the Hong Kong company may make are taxable on the OP, unless it is UK resident.
Both matters need to be correctly self-assessed.