IR35 and not being tax-resident in the UK

[jamesbrown]

I agree, and I really wish it was that simple, because a scenario like this would have solved all my problems, but the answer I am expecting is that as a director of a UK company, you immediately become tax resident for the income you receive from LtdCo. You can be tax resident in more than one country.

Then you, as a UK citizen, receiving either dividends or a salary from the UK LtdCo, will have the same IR35 exposure.

If you did a circular reference to yourself out in Bali or Bora Bora, you probably also set off red flags for deliberate avoidance or evasion. But I stress, this is just my opinion.

Being a director of a UK company and being UK resident for tax purposes are two entirely different things. Hence the widely understood concept of a "Non-Resident Director" or NRD, of which there are many, of course (including, or even especially, of very big companies).

In fact, it's worth knowing that you don't need to file a SATR for merely being a UK company director, despite what HMRC may suggest (fully understanding the law).

The condition for filing a SATR is, again, that you are personally chargeable to UK tax.

Ultimately, it is the law that matters, but there is obviously hassle involved in being a UK company director and it's hassle that is best avoided entirely if you live and work overseas. There is absolutely no doubt that HMRC will take an interest in you as they so choose, but they cannot operate outside UK tax legislation.

[Jolie]

Being a director of a UK company and being UK resident for tax purposes are two entirely different things. Hence the widely understood concept of a "Non-Resident Director" or NRD, of which there are many, of course (including, or even especially, of very big companies).

In fact, it's worth knowing that you don't need to file a SATR for merely being a UK company director, despite what HMRC may suggest (fully understanding the law).

The condition for filing a SATR is, again, that you are personally chargeable to UK tax.

Ultimately, it is the law that matters, but there is obviously hassle involved in being a UK company director and it's hassle that is best avoided entirely if you live and work overseas. There is absolutely no doubt that HMRC will take an interest in you as they so choose, but they cannot operate outside UK tax legislation.

Agreed, all very valid points which I have already covered. Most of the scenario's you refer to are about the company tax residence and the citizenship of the directors. I am not going to comment on companies and non-UK citizens, because that is outside of this scope.

The issue is about a UK citizen (which I assume the OP is) who becomes tax resident of another country, lives and works there. That does not dissolve their liability to taxation from their LtdCo. AFAIAA, having a UK Ltd that is operational, receiving income and you as a UK citizen named director, will require a SATR if you take any money from it, whether from dividends, directors salary or both. If you do so, you automatically become tax resident again, or you remain tax resident before you even set off if you went abroad after you already setup the company and took income from it.

I will clarify these points in the next couple of weeks, plus one other that is more related to foreign dividend income. (In my case, dividend income from another country paid into a UK bank account and then sent on to another country, but that's another issue.)

[jamesbrown]

Agreed, all very valid points which I have already covered. Most of the scenario's you refer to are about the company tax residence and the citizenship of the directors. I am not going to comment on companies and non-UK citizens, because that is outside of this scope.

The issue is about a UK citizen (which I assume the OP is) who becomes tax resident of another country, lives and works there. That does not dissolve their liability to taxation from their LtdCo. AFAIAA, having a UK Ltd that is operational, receiving income and you as a UK citizen named director, will require a SATR if you take any money from it, whether from dividends, directors salary or both. If you do so, you automatically become tax resident again, or you remain tax resident before you even set off if you went abroad after you already setup the company and took income from it.

I will clarify these points in the next couple of weeks, plus one other that is more related to foreign dividend income. (In my case, dividend income from another country paid into a UK bank account and then sent on to another country, but that's another issue.)

You are quite confused. There are very few countries in the world that tax on the basis of citizenship and the UK is not one of them. The US is one of them, for example.

If there is no charge to UK tax, there is no requirement to file a SATR and UK anti-avoidance legislation cannot apply, by definition. Being a UK citizen does not make you chargeable to UK tax. Being a director of a UK company does not make you chargeable to UK tax. Performing work in the UK that is non-incidental or "productive" does make you chargeable to UK tax (absent some unusual circumstances, such as working for an international organisation). Being a UK tax resident makes you chargeable to UK tax on your worldwide income. The real problem for NRDs arises when they perform work in the UK. None of this will stop HMRC probing whatever they want, but this is all pretty basic stuff.

[jamesbrown]

Oh and, of course, certain capital gains and dividends associated with profits earned in the UK are taxable in their entirety in the year of return for a temporarily non-resident (TRN) person that becomes UK resident again within five years of leaving the UK and realises these gains/profits while overseas, but that also only applies to people that are chargeable to UK tax (the clue is: returns to the UK within five years).