Hi, UK resident non dom now member of the board of directors in an italian company.
I'm going to require the E101 from HMRC to avoid italian contribution, anyway it isn't really clear for me if I have to pay the NIC only on the remitted income or on all the sum I will receive despite they are remitted or not. Any ideas ? Thank you in advance.
Marco
Replies (3)
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Where are duties carried out ?
If no duties in the UK and no UK business enjoys the benefit of the services, NIC is not in point .
You separately do have to be careful to ensure that the Italian Company is not a "relevant person" as defined in ITA s809M-
If there is such a UK connection , then the Director has to pay employee's class1 contributions, and the remittance rule arguably may not apply - see ITA s. 809L(2)(b).
The computation of income for NIC frequently differs from that for I/T. Look at the treatment of Schedule D losses for example. When sideways relief is claimed for I/T in the year of the loss, the losses can still be carried forward for NIC purposes.
A different example of asymmetry lies in "normal expenditure" computations for IHTA s21 purposes , where the CTO accepts that unremitted income can be taken into consideration to 'frank' gifts.
Remittance.
There seems to be no problem with your plan if the director's fee from the Italian company is to be remitted to the UK anyway. The UK/Italy Double tax agreement will require a remittance if the client seeks to benefit under its provisions.