Non Residency

[zenithnz]

I am not getting any help from my Accountant on this, so I am trying to do my own research.

Basically I am leaving the UK, travelling for a year (not working anywhere), and will not be back to the UK for the forseeable future.

I have a fair bit of money in my Company account, but don't want to pay too much tax on it.

I am thinking of filling out a P85, and declaring myself a non tax resident, then while I am a non resident, closing my company, paying my corporation tax and pulling the balance of my company account down as a dividend.

Am I right to think that this dividend is tax free, as I am not a UK resident. And also as I will not be resident to any other country that year, no one else will hit me with a tax bill.

Is this correct, or does someone know of something that will catch me out?

[rootsnall]

I am not getting any help from my Accountant on this, so I am trying to do my own research.

Basically I am leaving the UK, travelling for a year (not working anywhere), and will not be back to the UK for the forseeable future.

I have a fair bit of money in my Company account, but don't want to pay too much tax on it.

I am thinking of filling out a P85, and declaring myself a non tax resident, then while I am a non resident, closing my company, paying my corporation tax and pulling the balance of my company account down as a dividend.

Am I right to think that this dividend is tax free, as I am not a UK resident. And also as I will not be resident to any other country that year, no one else will hit me with a tax bill.

Is this correct, or does someone know of something that will catch me out?

I doubt there is much to be gained as you will effectivly be paying corporation tax on your dividends that you then use to offset against your personal taxation. If you are into the higher rate for the tax year then there may be some gains possible by delaying the divis until after April 7th. One thing you can do is leave 8K or so in your Co and then take it as a tax free capital gain on closing it down. I did this a couple of times when going off travelling for the forseeable future. I had an Aussie mate who built up 200K+ in his Co before leaving for good but there wasn't any magic tax dodging solution when he really looked into it, I doubt there is at the moment. People were willing to 'sell' him a magic solution but they were all dodgy !

Where are you off to ? I'm a bit jealous.

[Tool]

Is this correct, or does someone know of something that will catch me out?

AFAIK, that's correct provided that you stay out of the UK for 5 tax years. You also need to close the company in a tax year where you are not resident anymore (eg: fly off April 1st and close company April 6th).
Basically, non-resident are not taxed on capital gains, but they must be non-resident for 5 full tax years.
I think the monies you get from closing your ltd are considered capital gain, but I think you need to get HMRC approval first (which is almost automatic)...

As usual, I am not qualified to tell you this! seek legal advice!

[zenithnz]

Thanks Guys,

I am travelling from London to New Zealand overland, so no planes, just trains, buses, freighters, elephants, that kind of thing. It will probably take up to a year.

Seems like a good way of getting a decent holiday, also fancy getting some tax benefits out of being a transient.

I think Capital Gains sounds like the way to go, seems fairly straight forward, as long as I don't come back for 5 years. I guess if I do feel the need to get another contract, there is always Asia.