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Where Taxpayers and Advisers Meet

UK company dvidends for non-resident individual

Jetsetter4805
Posts: 22
Joined: Wed Mar 09, 2011 6:37 pm

UK company dvidends for non-resident individual

Postby Jetsetter4805 » Fri Dec 02, 2016 4:15 pm

I have been non-resident for several years and have recently started to operate through a UK limited co as my main client is UK based and I can easily file the relevant submissions (CT return, annual return etc.) myself online. I still submit UK individual tax returns and was wondering how the £7500 dividend limit would affect me as a non-resident. I realise that this would be taxable income in my country of residence but would there be scope for me to pay myself a higher dividend (than £7500) and not be subject to further UK income tax as a non-resident or would I be taxed in the same way as a UK tax resident?

Thanks in advance.

LozaACCS
Posts: 1504
Joined: Wed Aug 06, 2008 3:55 pm

Re: UK company dvidends for non-resident individual

Postby LozaACCS » Fri Dec 02, 2016 8:12 pm

Dividends are still disregarded income so yes providing you do not claim a personal allowance (assuming you are entitle to one), obviously you would need to consider the position in your country of residence.

maths
Posts: 7543
Joined: Wed Aug 06, 2008 3:25 pm

Re: UK company dvidends for non-resident individual

Postby maths » Sat Dec 03, 2016 2:51 pm

The dividend allowance is £5,000 (effective 16/17).

However, if your only UK source income is dividends then your UK income tax liability as a non-resident is capped under the legislation which means that in effect no income tax arises on the dividends irrespective of the amount

LozaACCS
Posts: 1504
Joined: Wed Aug 06, 2008 3:55 pm

Re: UK company dvidends for non-resident individual

Postby LozaACCS » Sat Dec 03, 2016 9:18 pm

Unless you elect for a personal allowance

maths
Posts: 7543
Joined: Wed Aug 06, 2008 3:25 pm

Re: UK company dvidends for non-resident individual

Postby maths » Sun Dec 04, 2016 2:53 pm

Why do you say this Loza?

LozaACCS
Posts: 1504
Joined: Wed Aug 06, 2008 3:55 pm

Re: UK company dvidends for non-resident individual

Postby LozaACCS » Mon Dec 05, 2016 9:23 am

I should have added "assuming you have UK non disregarded income" - S811 ITA 2007

Jetsetter4805
Posts: 22
Joined: Wed Mar 09, 2011 6:37 pm

Re: UK company dvidends for non-resident individual

Postby Jetsetter4805 » Mon Jan 09, 2017 2:02 pm

The dividend allowance is £5,000 (effective 16/17).

However, if your only UK source income is dividends then your UK income tax liability as a non-resident is capped under the legislation which means that in effect no income tax arises on the dividends irrespective of the amount
Thank you for the response - much appreciated. I also receive a modest amount of UK bank interest but presume this doesn't affect the above.

In response to Lozza's remarks, I have never 'elected' to receive a personal allowance. This has always been automatically received/applied each time I have submitted a UK tax return as I usually receive a refund for any tax deducted at source on my UK bank interest.

Jetsetter4805
Posts: 22
Joined: Wed Mar 09, 2011 6:37 pm

Re: UK company dvidends for non-resident individual

Postby Jetsetter4805 » Thu Mar 16, 2017 11:56 am

I'm still a bit confused about 'electing to have a personal allowance'. The PA is automatically applied to my tax calculation.

With this in mind, as a non-resident the income tax liability on £30k of UK source dividend income in 2016/17 will result in a NIL UK income tax liability? The only other UK source income is £2k of bank interest income.


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