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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3652
Experience:  Solicitors 2 years plus PQE
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I am currently living abroad (Austria) and paying tax on self

Resolved Question:

I am currently living abroad (Austria) and paying tax on self employment. I am also a director of a company in the UK that hasn't started trading yet. When it does I initially won't be taking any money from the business however eventually I would like to do this but the tax in Austria is very high. Is there a way I could leave my portion of the money inside the business and draw it out at a later date, perhaps when I go back to the UK and therefore only pay UK tax on it? Is this a legal way? Are there any down-sides to doing it this way (apart form having to fill in a self assessment form in the UK which I will be doing anyway as I am renting my flat out). Is there any other way of doing it?
Submitted: 2 years ago.
Category: Law
Expert:  Alex J. replied 2 years ago.
Hi,
Thank you for your question and welcome.
My name is ***** ***** I will assist you.
There are two ways to draw money out of a limited company:
(i) Pay yourself a salary; or
(ii) Declare dividends.
You are not under any obligation to make the company either declare a dividend or pay you a salary. If the company makes a profit, then this can remain cash in the bank and asset of the company for as long as you take to declare a dividend as shareholder and director of the company.
I look forward to hearing from you.
Kind regards
AJ
Customer: replied 2 years ago.

Thanks for the swift response.

How does the tax work on dividend share? Pressumably I can tax a share amount up to my personal allowance and then pay some tax amount after that, in which case would I be paying the UK tax amount, Austrian tax amount or a special amount for dividends? Do I even need to declare this in Austria at all?

Expert:  Alex J. replied 2 years ago.
Hi,
Thank you.
It would be treated as income in the UK. You would have to pay income tax on it.
The UK and Austria have double taxation treaties. You would only pay income tax on it once.
However ultimately if it this is income earned in the UK you will have to pay UK Tax on it.
Kind regards
AJ
Customer: replied 2 years ago.

ok great. So final question, with the double taxation treaty would I even have to declare it on my Austrian tax forms, or just uk?

Expert:  Alex J. replied 2 years ago.
Hi,
Thank you.
I am afraid that Austrian Tax returns are beyond my expertise. This is really the remit of an Austrian accountant.
I am company lawyer - so I can assist you any further on any questions you have regarding your UK company?
Kind regards
AJ
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