What happens when I become an offshore shareholder?

[alphadog]

This is a tricky area and you need to speak to an accountant. You might well be exempt.

Good advice. Trouble is, different accountants will give different answers (and certainly, my current accountant is no expert on non-resident taxes)...

[ContrataxLtd]

Hi All

I'm considering emigrating out of the UK permanently (to NZ). My UK ltd company has built up some nice retained profits.

Fortunately the tax man in NZ allows newcomers to bring all income from offshore into NZ free of tax for five years.

So, I plan on sending all of my UK ltd's retained profits as a dividend to myself in NZ subsequent to having moved there permanently. No tax due in NZ. What about the UK? I assume none, given that my primary residence for tax purposes will no longer be the UK? Once I have made the dividend payment from the UK company bank account to my personal bank account in NZ, will it be a simple case of getting the UK accountant to send the final UK ltd accounts and shut down the company?

It all seems a bit too easy

Hi Alphadog

Have a read of this HMRC manual:

SAIM1170 - Savings and investment income: non-residents

You probably won't have a UK tax liability on the dividends but you definitely need to check your residency status when you leave to ensure you become non resident in the UK and also qualify for split year treatment (if you are leaving part way through a tax year). You need to look at the statutory residency tests and apply them to your specific circumstances.

HTH

Martin
Contratax Ltd

[prozak]

Move to NZ.

Tidy up all your affairs here. Establish full year residency. No rush as you have 5 years.

Pay dividend

Pay no Tax.

It is not so hard. The difficulty is when you rush over there and complicate things by still being resident here.

[alphadog]

I have an update on this thread for anyone who is interested...

Advice I have received indicates that my original plan is possible if I become non-resident for uk tax and remain non-uk resident for tax for a period of at least 5 years.

Unbeknownst to me, new anti-avoidance legislation was introduced in 2013 to prevent people becoming non-uk resident for a relatively short period of time, extracting all their UK retained profits as a tax free dividend, then becoming UK-resident again. Fair enough.

Only thing is, we have absolutely no idea if we are going to be non-uk resident for 5 years or more. Maybe we'll be back in a couple of years time with our tails between our legs. Which makes it a tricky judgement call on my part... probably going to do MVL and take the 10pc ERCGT up front, rather than risk paying a huge amount of higher rate dividend tax if we return within 5 years.

Some further discussion here:
http://www.taxation.co.uk/taxation/A...-and-dividends