Share this content

Tax due on dividend if non resident

Tax due on dividends if non resident

Didn't find your answer?

I have a UK limited company with a few properties in it, i use the company for my consultancy work, although it has been used this year, its not been used in the previous 2 years. I have been non resident in the UK for the past 3 years, i have around 200k in my company that has had corporation tax paid on it. How much of that is allowed to be taken as a dividend without incurring personal tax ?

Replies (17)

Please login or register to join the discussion.

A Putey FACA
By Arthur Putey
17th Jan 2022 15:26

Depends on where you are tax resident. Once you've worked that out you can apply the tax rules for that country.

Thanks (0)
Replying to Arthur Putey:
avatar
By swampydrill
17th Jan 2022 15:45

I know people dont like this answer but im not really tax resident anywhere, i stay in Ghana but work other places around the world, i need 183 days in Ghana to be classed as tax resident but as i have worked in other countries i dont get near that, i pass the UK ties test and am looking to see if i can take a dividend out of the profits in the UK ltd company and not incur UK tax. This money has sat in the business for a while, at least 3 years but is a few hundred K.

Thanks (0)
Caroline
By accountantccole
17th Jan 2022 15:44

Depends whether you have other UK income streams - normally non residents will either get a tax credit or use disregarded income rules so probably no UK tax if the dividends are your only UK income, but if you have other income it is more complex.
Like Arthur says - there is likely to be tax /social charges etc due where you are resident

Thanks (0)
Replying to accountantccole:
avatar
By swampydrill
17th Jan 2022 15:49

Thanks. The company has some revenue from the properties in the business but is less than 25k a year, i have not taken a salary from the company this tax year although i did do a job in Mexico where i had to use the UK business so the company did earn around 150k so far this year which will be open to corporation tax unless i can get an NT tax code from HMRC. The dividend i would like to pay is from profits in previous years

Thanks (0)
avatar
By Catherine Newman
17th Jan 2022 15:57

The company and you are separate. Companies do not get NT codes and the income from property in a company is not your income stream. An NT coding means No Tax on any salary and nothing else. The company will pay corporation on its profits wherever you are. It used to be income tax but is now CT.

Thanks (0)
Replying to Catherine Newman:
avatar
By swampydrill
17th Jan 2022 16:32

Quite right Catherine, understand fully we are 2 different issues. I didnt write it very well, i only mentioned NT codes because as a non resident i could potentially pay the company income as a salary and be due no tax. Different to my original question about dividends which i think has now been answered with it being disregarded income

Thanks (0)
Replying to swampydrill:
A Putey FACA
By Arthur Putey
17th Jan 2022 17:05

Well if you had been able to do that (assuming none of your duties were performed in the UK) the company would have paid less corporation tax! So advice earlier might have helped.

Thanks (0)
avatar
By Paul Crowley
17th Jan 2022 16:11

I consider that you need an accountant with an international tax department
Probably a large firm
If you are tax resident nowhere (per your post) then the UK company is probably still UK taxable

Thanks (1)
Replying to Paul Crowley:
avatar
By swampydrill
17th Jan 2022 16:36

I believe you are correct, i still fill in a self assessment due to being a director but i then pass the tests in order to be classed as a non resident for tax purposes.
I have a max 2 ties in the UK and have spent less than 90 days in UK, 1 of those ties is based on housing, my accountant believes its a tie, other accountants believe they are not as they are in the company and rented out and so not available to me. I only want to do things correctly and within the system.

Thanks (0)
Replying to swampydrill:
avatar
By AndyC555
17th Jan 2022 16:53

"i still fill in a self assessment due to being a director"

You don't need to. HMRC used to insist that every director filed a tax return but when it was pointed out that there was no such statutory obligation to file a tax return just because you are the director of a UK company, they've stopped asking for them.

Thanks (1)
Replying to swampydrill:
avatar
By Hugo Fair
17th Jan 2022 16:54

"my accountant believes its a tie, other accountants believe they are not .."

So you have an accountant AND have spoken to other accountants (like a second-opinion) AND are now asking a bunch of anonymous people on a forum (many of whom are highly competent accountants - but you don't know which are/aren't).

I don't mean to be cheeky but you do realise that ultimately it is you that has to make the decision(s)? If you feel you can't rely on the advice of your accountant then its probably time to pick another one!

Thanks (1)
Replying to Hugo Fair:
avatar
By swampydrill
17th Jan 2022 20:21

I know full well its me that has to make a decision but accountancy is not my strong point as you can see. There is a lot of money involved and i dont want to make the wrong decision. The thing about these sites is that you almost self regulate, if someone was giving me bad advice then someone else would correct them, i believe anyway.

Thanks (0)
Replying to swampydrill:
avatar
By Leywood
17th Jan 2022 20:42

You believe wrong.

They used to.

They also used to pump OPs for sufficient information to answer the question that should have been asked in the first instance or for more information to assist an assessment.

But then it used to be a forum purely for professionals with the odd person poking about for free advice.

Now the forum is littered with the complete opposite.

So now, well it’s rare.

Thanks (0)
avatar
By AndyC555
17th Jan 2022 16:51

It is theoretically possible to be a tax 'nomad'. Tax resident nowhere.

Since the introduction of the Statutory Residence Test in the UK 2013, residence (or not) in another country isn't taken into account when determining UK residence.

Being resident nowhere obviously won't give you any tax-treaty protection. It might be the case (for example) that any salary paid from your company in respect of the work you did in Mexico was taxable in Mexico even if you weren't tax resident in Mexico. I don't know as I haven't looked at Mexico's tax rules but this sort of thing is a possibility.

Similarly, if you happened to be in a country with the 'wrong' tax rules on the day you paid any dividend, you might incur a liability there.

Given the amounts involved, it is going to be worth your while getting proper paid advice. Relying on this forum could end up with you spending time in a Mexican jail for tax evasion!

Thanks (1)
Replying to AndyC555:
avatar
By swampydrill
17th Jan 2022 20:44

I agree, often a company will pay our tax liabilities in that country if there is a liabiity, for Mexico thats why i had to work through the limited company because they do have a dual taxation agreement with the UK, is definitely something i have to continually check

Thanks (0)
Replying to swampydrill:
My photo
By Matrix
17th Jan 2022 20:49

Did you have to pay tax in Mexico on profits attributable to a Mexican PE?

Thanks (0)
Replying to Matrix:
avatar
By swampydrill
17th Jan 2022 22:51

No, thats the idea of a dual taxation agreement i guess

Thanks (0)
Share this content