tax on foreign stocks and share

[4ze]

Hi there,

really hoping someone could shed some light on the following for me

I’m a UK citizen currently living and working overseas in Jordan. I don’t pay tax in the UK and I am exempt from paying tax in Jordan – the European company I work for has an agreement with the Jordanian Gov. on this.

I want to invest in stocks and share and normally I would do this through an ISA in the UK, but since I am not a UK resident I am not eligible to open or pay into one.
I have found a couple of brokers/banks which I could open a stocks and shares account with based in Dubai. I would not have to pay tax in Dubai or the UK on any capital gains or dividends.

I have a few questions.
1. Would I need to pay tax in Jordan? No money would be coming into Jordan. I do not have a bank account in Jordan and would transfer any funds to and from the UK (I expect no one here is an expert on Jordanian tax law, but I am just assuming there is a standard practise)

2. When one day returning to the UK, would I be liable to tax once I transfer the cash over?

3. If I open a UK account instead to trade and pay tax on this, if my gains and dividends are within the yearly allowance each year, does this mean I would not pay tax? Or do I only pay tax when I sell the shares? If the latter, is it correct to assume as long as I don’t sell more than my yearly allowance I wouldn’t pay tax?

Thanks so much for any feedback on this

[AGoodman]

1. No idea
2. Probably not. CGT would only be payable if you returned to the UK within 5 tax years of leaving the UK, in which case you would be treated as making all your gains in the year of return. Absent that, non-UK residents do not pay CGT on investments.
3. As above for CGT (the location of the gain is irrelevant). You will only pay UK income tax on dividends if you are UK resident and non-residents will just pay withholding tax (20%) on bond interest, although you may be able to reclaim this by filing a UK SA return and using your personal allowance. The bond interest may be further limited to UK payers but I am not certain on that.