Dividend tax on company profit - Non UK resident

Does a Hong Kong resident have to pay UK earned dividend tax in the UK?

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I am emigrating to Hong Kong from April 2019 onwards for at least 1 full tax year. My situation will classify me automaticaly as a non-UK resident:

  • You work abroad full-time (averaging at least 35 hours a week) and spent fewer than 91 days in the UK, of which no more than 30 were spent working.

I have been working as a contractor and have accumulated profit in my LTD company, and I've been informed that I can extract this profit as dividends, and pay dividend tax in the country in which I am a resident. Which in the case of HK is 0%. 

Does anyone have experience with this and can they confirm this is true? Also, how long will I have to be a non-UK resident for in order for this to be valid, if valid at all?

Any help would be appreciated!

Chris

 

 

Replies (7)

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By Accountant A
18th Feb 2019 12:09

Who usually deals with your personal and company tax affairs? They'd probably be the person to ask in the first instance. There may be other tax issues arising from your emigration so best to get advice 'in the round'.

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By Adam12345
18th Feb 2019 12:27

https://assets.publishing.service.gov.uk/government/uploads/system/uploa...

Section 6 is a good place to start.

You should engage someone with appropriate experience to help you out.

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By Justin Bryant
18th Feb 2019 13:53

It seems everyone's doing this these days. See:

https://www.independent.co.uk/news/uk/home-news/jim-ratcliffe-monaco-tax...

You need to be non-UK resident 6 tax years. See:

https://www.accountingweb.co.uk/any-answers/how-long-to-be-non-resident-...

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Lone Wolf
By Lone_Wolf
18th Feb 2019 14:05

If you don't follow the GAAR then it is likely going to cost you big time. Pay for some advice and save the future headache.

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Replying to Lone_Wolf:
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By Vile Nortin Naipaan
18th Feb 2019 14:42

Don't mention the GAAR. I did once, but I think I got away with it.

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By Duggimon
18th Feb 2019 14:31

1 year makes you a temporary non-resident, which is where your plan falls down. I would echo the advice given that you should seek the services of a qualified professional who will be able to advise on the tax planning opportunities that may exist in your situation, simply paying a huge dividend isn't the solution you're looking for.

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By ArranP
20th Feb 2019 00:28

I am non resident director of a UK Ltd Co, and questioned HMRC directly and a specialist tax advisor regarding receipt of dividends and tax.

Response

"Payment of dividends from UK companies is disregarded income."

https://www.gov.uk/government/publications/non-residents-and-investment-...

" If you return to the UK within five years from the payment of dividends and become UK resident for tax purposes. In that situation you would be taxed on the receipt of the dividends. "

Also, you need to waive your right to utilising your personal allowance and not use your personal allowance in your computations, this can be done on your self assesment.

Each persons situation can be different so specialist advice should be sought from a tax advisor.

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