Possible to receive dividends in UK when not resident?

[AGR]

Hi,

I am hoping someone on here can help me, as I am rather confused!

My wife and I are planning to move from the UK to South Africa, where we intend to live indefinitely.

I have my own Limited Company in the UK (I have a 98% holding), through which I will continue to work throughout my time in SA. This will be my only source of income.

My questions:

1. Once I become a resident of South Africa, can I continue to pay myself a dividend "tax free" in the UK (i.e. notional tax based on the fact that the dividend is paid after corporation tax at 21%)?

2. Can I continue to pay myself a salary (e.g. just below the personal annual income allowance) in the UK, even though I am no longer a resident?

3. What would be the most effective way to pay myself from the income I generate through my UK-based limited company (i.e. have access to my funds in South Africa but pay as little tax as possible)?

Thanks in advance for any and all help.

Alex

[Brian Clarke]

"1. Once I become a resident of South Africa, can I continue to pay myself a dividend "tax free" in the UK (i.e. notional tax based on the fact that the dividend is paid after corporation tax at 21%)?"

That is not affected by where you are tax resident. Remember that a dividend in the UK is not tax free, although it comes with a tax credit which may or may not cover the whole tax liability on it.

"2. Can I continue to pay myself a salary (e.g. just below the personal annual income allowance) in the UK, even though I am no longer a resident?"

Sure. But, like the dividends, it's a UK income source and therefore taxable in the UK, and to keep things straight you will need to do a UK tax return each year.

"3. What would be the most effective way to pay myself from the income I generate through my UK-based limited company (i.e. have access to my funds in South Africa but pay as little tax as possible)?"

To give anything like a precise answer to that, it would be necessary to have a personal consultation, but the same considerations apply as if you were in the UK - eg are you making pension contributions?

[maths]

I am not sure I agree with Brain Clarke's comments 1 and 2.

1. The UK source dividend income qualifies as "disregarded income" in which case no UK income tax liability arises thereon.

2. No UK income tax liability arises on the UK source salary so long as no UK duties are performed (and even if they are the UK/SA double tax agreement is likely to offer protection).

[GARDNER4]

Hi

Unless i am mistaken all common wealth countries individuals are allowed the personal allowances in the UK if they earn any salary here, otherwise TAX will be deducted in full if they are not part of the common wealth from their salary. If SA is not part of the commonwealth tax will be paid to the UK AUTHORITY, but as MATHS stated above double tax agreement is likely to offer protection.
Pls note that you will need to satisfy govt that you actually did work for the company for the salary you got paid for.