No tax for UK non-dimicile

**Keldin** · 25 November 2007, 11:37

As a permie I was non-domiciled in the UK and employed by a company in teh Channel Islands but since I worked in teh UK I paid tax in the UK. I would think that if your Ltd is UK based and you are its employee you would have to remain outside the UK for a significant portion of the year. You're probably better off speaking to an accountant/tax person about this.

K

**tim123** · 26 November 2007, 09:53

I don't understand your question.

If you are working in Germany you should be paying tax in Germany. I don't see that you should be paying any tax in the UK in first place, so there is no need to optimise it.

tim

**The Lone Gunman** · 26 November 2007, 10:42

Check with a pro. I have not worked in Germany for a coupl of years and am not sure of current legislation.
In most of Europe your domicle satus has nothing to do with your tax residency. You are tax resident somewhere. Either the last place of tax residency or a country where you have worked for 183 days or more. You are required to pay tax somewhere.
If you are German tax resident then your UK Ltd is not the best tax vehicle. Find a management company who specialises in ermany (I believe there was a legislation change recently). The usual route (and goes for most of Europe) is to take a salary localy which you pay tax on (there is a legal minimum in Germany) then put the over spill into a pension fund. You should pay tax on the pension fund in the country where you are tax resident when you cash it in. Many do not.
If you are UK tax resident then do the usual low salary and divvies.

I am not qualified to give this advice.

**BlasterBates** · 26 November 2007, 11:55

You can't just syphon money off as overspill, if you're going to that you may as well go the whole hog and evade tax completely. If you have an employee taxed in Germany, the Ltd company will also have to be registered, and therefore any "overspill" will be taxed at corporation tax rates. I recommend you work "freiberuflich" (freelancer). All income is taxed as personal income. You'll need to declare this in the UK but it won't be taxable. I can't see how a managed company in Germany is beneficial as it is in Belgium, Luxembourg or Switzerland. As freelancer in Germany, you don't even have to register, just simply get a German tax consultant (Steuerberater) to handle it for you, don't do this through a British company, and don't forget the VAT.

**tim123** · 26 November 2007, 12:44

Originally posted by BlasterBates View Post

You can't just syphon money off as overspill, if you're going to that you may as well go the whole hog and evade tax completely. If you have an employee taxed in Germany, the Ltd company will also have to be registered, and therefore any "overspill" will be taxed at corporation tax rates. I recommend you work "freiberuflich" (freelancer). All income is taxed as personal income. You'll need to declare this in the UK but it won't be taxable. I can't see how a managed company in Germany is beneficial .

Because not all employers will let you "freiberuflich".

It's like the UK, you can't just decide to be self employed, you have to be working in a manner which IS self employed. Admittedly the tests for self employment in Germany are easier to pass than in the UK, but you still need a willing employer to pass them. And for some employers (like a very large electronics company beginning with S) being willing is too hard for them.

tim

**AlfredJPruffock** · 26 November 2007, 12:49

Originally posted by ExecConsult View Post

Hello everybody. I just joined - this board looks very resourceful and full of members with great knowledge about the world of contracting.

I have just moved back to the UK after a year in Europe, do not have a UK passport and am at the moment working on a contract in Germany. My permanent address is in London, and I have a limited registered in England.

I have heard that there are about 110 000 contractors in the UK who claim they are UK non-dimicile and hence, do not pay any tax at all.

I don't like sailing close to the wind, but if I can get away with lower tax without breaking any laws, I am all ears.

Can anyone shed some light on low/no tax for non-dimicile UK contractors please?

Thanks.

You should take advice from a qualified accountant - defining your status as to non-domiciled, non-residency can be quite complex - my understanding is that non-domiciled depends on a range of factors - however if you have property in the UK - that can be a pointer to being domiciled in the UK - however depending on how long you have been away from the UK is an important factor for non-residency - there is an interesting publication from HRMC on this topic which you can obtain from their website - again I would seek professional advice from an overseas Tax Specialist on such a matter.

**sathyaram_s** · 26 November 2007, 13:06

Get in touch with people from your country of origin who are non-domiciled in the UK. They should be able to guide you and refer you to a professional. As far as I understand, it is important to consider the tax rules of your country of domicile as well to ensure you can reduce your tax bill both efficiently and legally

Experts in non-domicile matters are expensive and many deal with you only if you are worth millions in cash/investments.

Originally posted by ExecConsult View Post

Hello everybody. I just joined - this board looks very resourceful and full of members with great knowledge about the world of contracting.

I have just moved back to the UK after a year in Europe, do not have a UK passport and am at the moment working on a contract in Germany. My permanent address is in London, and I have a limited registered in England.

I have heard that there are about 110 000 contractors in the UK who claim they are UK non-dimicile and hence, do not pay any tax at all.

I don't like sailing close to the wind, but if I can get away with lower tax without breaking any laws, I am all ears.

Can anyone shed some light on low/no tax for non-dimicile UK contractors please?

Thanks.

**tim123** · 26 November 2007, 15:15

Originally posted by sathyaram_s View Post

Experts in non-domicile matters are expensive and many deal with you only if you are worth millions in cash/investments.

It's hardly likely to be otherwise, is it.

There's no point p1ssing around trying to change your domicile to save a couple of grand in tax, is there?

tim

**ExecConsult** · 26 November 2007, 17:27

Originally posted by tim123 View Post

It's hardly likely to be otherwise, is it.

There's no point p1ssing around trying to change your domicile to save a couple of grand in tax, is there?

tim

It's high end consultancy, so shaving off 10% would save me 20 K pounds a year. If I can save that legally, I will go for it.

I am taxing in the UK because that's where I have my 'management and control' - this gives me a tax benefit over Germany, as in the UK, I can go for the low salary, high dividends approach outside the IR 35.

I am also providing consultants through my ltd, sourced from the open market in England, and provided to customers around the world.

Also, I am travelling so much that I contemplate giving up my rented accomodation in the UK in favour of staying in hotels. This should strengthen my case for non-domicile, I assume?

So an expert in non-domicile is the way to go. Does anyone know an expert like that I can contact?

No tax for UK non-dimicile