Moving away from the UK, withdrawing dividends and closing company

[cwah]

That doesnt really work if you are 20 years away from 57 does it

And the pension rules and the tax system cannot be trusted in the UK - I dont like this stuff the pension idea unless it really is the last resort

It wouldn't work if you are in immediate need of the money. But it's a good compromise to reduce tax liability and freedom to take another gig in few months/years should opportunity arise.

I'm also 20 year away and I just topped it up reducing my last fiscal year corporation tax by £7600 which actually is adding more than I could by paying myself dividends (Pension is an expense)

Then I fully plan to let my company open for at least 5-10 more years as by receiving a salary I contribute to my state pension. So each year I get additional state pension benefit without forking anything else....

This is long term plan but it's the best fiscal decision. Get additional money just by letting the company open. And have flexibility to take work back here anytime as well!

[rootsnall]

That doesnt really work if you are 20 years away from 57 does it

And the pension rules and the tax system cannot be trusted in the UK - I dont like this stuff the pension idea unless it really is the last resort

The numbers make it such a no brainer it's crazy not to use direct SIPP contributions, IR35 has made it even more of a no brainer if you have spare cash. If you don't trust the UK rules then not sure where you'll put your money ?

[zerosum]

Or just put then gradually into your pension at £40k / year tax free. It locked it up until 57 yo but then you are free to come back anytime in the UK should a gig becomes available

But all of these concepts depend on being UK tax resident (IR35 as well).

There are other countries which are more fiscally favourable, but you have to get rid of all notions based on UK tax residence. And anyway, if you move back and fall foul of temporary non-residence, it's all taxed in the year of return.

Example:
Sometime in 2019-20 you move away and become non tax-resident (split-year)
20-21 you pay a dividend of 50k
21-22 you pay a dividend of 50k
22-23 you pay a dividend of 50k
23-24 you move back to the UK. You fall foul of temporary non-residence. You pay tax at the 23-24 rates on a dividend of 150k.

The question is whether, if instead you liquidated using an MVL in 22-23 and received a distribution of 150k, and paid CG tax on that according to the new country of residence, and then moved back in 23-24, you would quality for BADR/ER or just pay 20%.

[cwah]

But all of these concepts depend on being UK tax resident (IR35 as well).

There are other countries which are more fiscally favourable, but you have to get rid of all notions based on UK tax residence. And anyway, if you move back and fall foul of temporary non-residence, it's all taxed in the year of return.

Example:
Sometime in 2019-20 you move away and become non tax-resident (split-year)
20-21 you pay a dividend of 50k
21-22 you pay a dividend of 50k
22-23 you pay a dividend of 50k
23-24 you move back to the UK. You fall foul of temporary non-residence. You pay tax at the 23-24 rates on a dividend of 150k.

The question is whether, if instead you liquidated using an MVL in 22-23 and received a distribution of 150k, and paid CG tax on that according to the new country of residence, and then moved back in 23-24, you would quality for BADR/ER or just pay 20%.

Just to re-iterate, what keeping your company to move cash to pension would allow:

1. £7600 saving in corporation tax for the current tax year
2. No tax at all by transfering cash into pension instead of using dividend
3. You contribute to state pension available from 67
4. And you can come back to work anytime in the uk

So where would you go to get anything more advantageous than that?

I'd be curious to know what these countries could offer more than no tax + additional state pension for free.

[zerosum]

Just to re-iterate, what keeping your company to move cash to pension would allow:

1. £7600 saving in corporation tax for the current tax year
2. No tax at all by transfering cash into pension instead of using dividend
3. You contribute to state pension available from 67
4. And you can come back to work anytime in the uk

So where would you go to get anything more advantageous than that?

I'd be curious to know what these countries could offer more than no tax + additional state pension for free.

How about a country that charges 0% on dividends so you can put the money in a pension or wherever you want. With decent weather and without a government that degrades the soul of anyone subjected to their asinine utterances.

State pensions are not the unique preserve of the UK, believe it or not, and one of the gazillion benefits of being in the EU was the ability to combine your state pension contributions with those made in a member state, as you moved freely around -- a benefit still available if you move to an EU member state before the EOY, not after.

[cwah]

How about a country that charges 0% on dividends so you can put the money in a pension or wherever you want. With decent weather and without a government that degrades the soul of anyone subjected to their asinine utterances.

State pensions are not the unique preserve of the UK, believe it or not, and one of the gazillion benefits of being in the EU was the ability to combine your state pension contributions with those made in a member state, as you moved freely around -- a benefit still available if you move to an EU member state before the EOY, not after.

Ok I'm not disagreeing with you. I know there are tax heaven. However I don't know any I'd want to live in. I wouldn't want to live 5 years in dubai or isle of man for example....

Which country(ies) are you thinking about?

[NowPermOutsideUK]

Switzerland is one country. Only 1 hour by plane away. Stay less then 90 days in the Uk and non tax resident

[zerosum]

Stay less then 90 days in the Uk and non tax resident

That law changed in 2013. 30 days is enough to screw you now, in the right circumstances. https://assets.kpmg/content/dam/kpmg...-flowchart.pdf

[zerosum]

Ok I'm not disagreeing with you. I know there are tax heaven. However I don't know any I'd want to live in. I wouldn't want to live 5 years in dubai or isle of man for example....

Which country(ies) are you thinking about?

Dividend Tax Rates in Europe | European Rankings | Tax Foundation

Very high-level overview. Note they only mention the UK's highest level of dividend tax; think of it as a starting point to drill deeper on countries of interest.

Still, just 2 months and 3 weeks left to easily move to an EU country without being forced to apply for a (quota-limited) work permit at the local embassy (forming a company usually does not entitle you to work).

[cwah]

Dividend Tax Rates in Europe | European Rankings | Tax Foundation

Very high-level overview. Note they only mention the UK's highest level of dividend tax; think of it as a starting point to drill deeper on countries of interest.

Still, just 2 months and 3 weeks left to easily move to an EU country without being forced to apply for a (quota-limited) work permit at the local embassy (forming a company usually does not entitle you to work).

Switzerland cost of living is so expensive and they need visa if you want yo stay there. The only way to live there would be to have a good job there... but then it would be more about having the opportunity there than anything else (ie. You'd move there even without the tax benefit).

Other than that your map shows 21% in dividend tax...


I've checked the map and Uk still seems the most advantageous. The 2 countries with 0% dividend tax (estonia & latvia) still have income tax and aren't like being in the sun with great weather. Not sure about pension benefit either.

So I still can't see which country in europe would be better than the UK when considering fiscal benefit, pension and weather.