Non-UK Resident Director of UK Ltd Company - All work performed outside the UK

[NowPermOutsideUK]

Again. I am overseas and non-tax resident. I do not pay any tax in the UK on dividends from UK company shares. Therefore, unless there are different rules on shares from a micro-company, I really don't think the second accountant is right, unless you are currently also tax resident in Dubai.

This is correct - no tax on dividends if resident outside the uk - however if you elect for this to take place you lose your 12.5k personal allowance

NAT: Please confirm you do still need to pay swiss tax on dividends (although they do come with a 7.5% tax paid already from the UK even though you do not pay any personal tax yourself).

I am thinking of taking out a few 100K whilst I am still in Switzerland but last time I looked at this the numbers were better with zero dividends and a full 12.5K PA

[BoaContractor]

I reckon the current accountant is closer to correct.
For a start he's provided some links.

And secondly, the ex-accountant mentions a UK passport. I am not aware that having a UK passport makes a hoot of difference. So on that basis I suggest he knows far less than the current accountant. Is this the reason he's an ex-accountant?

But for where you are now I'd recommend that you read fully the links provided and understand them. And once fully digested ring HMRC to confirm any questions........ or talk to another accountant.

Not the reason he's the ex accountant but I was thinking of going back, I will hold off for now though I think.

I'll read again but I've read as many related articles as I can and it's unbelievable how incomplete the information seems to be, unbelievable. It's almost like they are deliberately not giving you all the information.

[NotAllThere]

NAT: Please confirm you do still need to pay swiss tax on dividends (although they do come with a 7.5% tax paid already from the UK even though you do not pay any personal tax yourself). PA

You declare them on your return, it's treated as income.

[NowPermOutsideUK]

And so my strategy has been to not take dividends but instead sell my shares in limited company A to company B and then treat the income as capital gains which are tax free in Switzerland and have no Uk tax element

I know eek raised her eyebrows at this but it is absolutely possible and company b can have a negative director loan to fund the acquisition of the shares in company a

[eek]

And so my strategy has been to not take dividends but instead sell my shares in limited company A to company B and then treat the income as capital gains which are tax free in Switzerland and have no Uk tax element

I know eek raised her eyebrows at this but it is absolutely possible and company b can have a negative director loan to fund the acquisition of the shares in company a

Don't remember calling you out on that one before - and can't be arsed to do it now as I've better things to do than hunt google for the common ownership rules / issues.

[lecyclist]

And so my strategy has been to not take dividends but instead sell my shares in limited company A to company B and then treat the income as capital gains which are tax free in Switzerland and have no Uk tax element

Is there any concern in your case that your UK company is a CFC and the seat of control is (you) in CH?
Are regulations related to connected parties owning a controlling share in the UK / CH companies a concern?

IANATA. I'm sure you've had your setup approved by a tax professional, but worth checking.

[BlasterBates]

The key issue here is not the UK, it is the country in which you're working. When you work remotely in another country you are running a business there and you need to register it and pay tax. If you run everything through a company in Dubai but you work elsewhere then this is almost certainly illegal in the country that you're working in. This is what you need to be concerned about. This actually applies even if you aren't actually resident in that country. As soon as you sit down in your remote office and work, you will be running a business. Not registering it is illegal.

[NotAllThere]

You pay tax where you physically are located when you do the work.

You pay tax on worldwide income where you are tax resident.*

You can be tax resident in mulitiple countries.

If two countries have a claim on tax there are dual taxation treaties to ensure one is offset against the other, so you only pay one - usually the higher rate.



* Except N. Korea and the USA who continue to want money no matter where you live.

[BlasterBates]

The term tax residency is somewhat confusing and has led to people thinking that you need to be resident to be liable for tax. In fact regardless of residency you are liable for tax where ever you earn income. If you own shares in a US company you will be liable for tax on the dividends in the US even if you never go there, The tax will be deducted by the company issuing the dividend or the broker. If you work in the UK for 3 months temporarily you will be non-resident but you are still liable for tax. This is the mindset you need to have. Non-residents are sometimes exempt from certain taxes but that is the exception. Tax authorities don't use the term "tax residency" they only use the term residency because it does not determine whether you are liable for tax, though residency will determine the level of tax you pay and whether you have to declare worldwide income.

[_V_]

I chuckle at the fact no one here can agree on where tax should be paid, and how much. I also smile when I think that the big tech companies achieve the goal of paying almost no tax anywhere, regardless of where the business is located, and regardless of where the income is generated. Then a bigger smile when I think no tax authority in any country takes the blind bit of notice of their blatant tax evasion.