This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Non residence via Full time employment route

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

Non residence via Full time employment route

Postby Jetsetter4805 » Fri Mar 11, 2011 8:23 am

Is it possible to claim non-residence if I (a one man UK Limited Company) decide to assign myself overseas for a complete tax year with a letter of assignment which would supplement my employment own contract?

I would performing duties throughout the entire year and billing clients based in the UK who require me to provide services overseas. Would it matter if I spent the tax year in 2-3 different countries (i.e. 4 months in each country) or would I be expected to stay in one country and establish tax residence there?

With reference to HMRC6, would the fact that I am still a Director/Shareholder of a UK company thoughout the year pose a problem i.e. would it suggest that I have not severed all business ties? I have no familiy or permanent residence in the UK and would be able to stay outside the UK for the complete tax year. My intention is close down my UK company after the full tax year and leave the UK permanently.

Many Thanks!

PracticalTax
Posts: 38
Joined: Mon Mar 07, 2011 10:22 am

Re: Non residence via Full time employment route

Postby PracticalTax » Fri Mar 11, 2011 3:30 pm

Your UK company would remain UK resident unless you could establish its residence in another country under the term of a double tax treaty. The fact that you have left wouldn't by itself move the residence of the UK company. So you are still liable to UK corporation tax but then you might be able to access the net profits more easily if you weren't here.
_________________________________________________________________

[b][size=85]Practical Tax Solutions
info@practicaltax.co.uk
www.practicaltax.co.uk [/size][/b]

Michael I. Atlas, CA
Posts: 192
Joined: Wed Aug 06, 2008 3:37 pm
Location: Toronto
Contact:

Re: Non residence via Full time employment route

Postby Michael I. Atlas, CA » Fri Mar 11, 2011 6:23 pm

Would'nt the answer be to just form a NEW corporation in a tax-haven jurisdiction outside of the UK through which to provide services while he/she is a non-resident of the UK?

Of course, if he/she is resident in a taxable jurisdiction and providing services there, the corporation may be liableto tax in that jurisdiction on the basis of carrying on business there.
Michael I. Atlas, CA,CPA,TEP
Practice Restricted To Tax
Toronto, Canada
http://www.TaxCA.com

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

Re: Non residence via Full time employment route

Postby Jetsetter4805 » Fri Mar 11, 2011 6:52 pm

Hi,

Many thanks for your responses.

I am not looking to avoid UK coroporation tax and am happy just to pay this tax in the UK as I don't have time to set up an overseas company before 5th April. I would not stay in any one country for more than 183 days in order to prevent forming a pemanant establishment (and to avoid becoming tax resident as an individual) and would be constantlly travelling and performing the work in numerous countries - not just the two I was living in over the tax year.

My question was more about establish non-residence from a personal income tax perspective. Would the fact that I'm the Director/Shareholder of a UK company result in me being liable for UK income tax on any salary or dividend I paid myself during the full tax year even if I spent the entire year outside of the UK? Can I assign myself overseas for a complete tax year as a one man Limited Company or does this only work for large companies?

Many thanks again!

maths
Posts: 7553
Joined: Wed Aug 06, 2008 3:25 pm

Re: Non residence via Full time employment route

Postby maths » Fri Mar 11, 2011 8:02 pm

If you work full-time outside the UK under a contract of employment spanning a complete tax year you should lose your UK residency and ordinary residency status (even if you own the company).

However, this requires that you do not attend board meetings in the UK although you can remain a director.

You must work and not mess around !!


Return to “International Tax”