My parents live in Jersey. My father was born here, while my mother was from England but they have lived in Jersey now permanently for over 35 years and have no intention of ever living in the UK again, so are very much non-resident and non-doms from a UK tax standpoint.
As they reach retirement age, I have helped them to build a broad bucket of shares to generate an investment return to live off. The investments are all listed with very predominantly UK domiciled legal structures, comprising ordinary shares and funds (ie no bonds) ie OEICs, closed-ended investment trusts or 'direct equities' (eg Aviva).
My question is whether or not any dividend income they receive is a UK-source income that needs to be declared (and they will have tax payable on) via their UK tax return (which they file as a non-resident landlord - see below)?
- the dividend income will be declared on their Jersey tax return as other worldwide income, which will be subject to local tax here
- they own one other UK sited assets, a property they acquired many years ago as an investment with some inheritance money
(I am aware that the property is a UK-situs asset, and it is simply because of this asset and the income that it produces that they have any UK tax return to do in the first place.)
My believe is that the UK dividend income does not need to be declared / attract UK income tax on the basis that it's 'disregarded income' - a concept I discovered on this page: https://www.expertsforexpats.com/expat-tax/expat-tax-advice/. This UK gov page (https://www.gov.uk/government/publications/non-residents-and-investment-income-hs300-self-assessment-helpsheet/hs300-non-residents-and-investment-income-2019) seems to confirm the same thing:
Can anyone confirm if I am interpreting this correctly please, or any other relevant considerations?"How is investment income charged to tax
With the exception of income from property in the UK and investment income connected to a trade in the UK through a permanent establishment, the tax charge for non-residents on investment income arising in the UK is restricted to the amount of tax, if any, deducted at source. If the tax charge is limited in this way, personal allowances won’t be given against other income. This restriction doesn’t apply in the overseas part of a split year."
Finally, does the analysis change in any way if the listed company pays an 'interest distribution' rather than a 'dividend'? I assume not.
Thanks in advance