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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4882
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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do you deal with europeans reloacting to the UK and have opened

Resolved Question:

do you deal with europeans reloacting to the UK and have opened a LTD?
Submitted: 3 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 3 years ago.
Hello and welcome to the site. Thank you for your question.

Please clarify for me... are you looking at tax implications for the LTD or the individual.
Also, is the income going to be arise in the UK?
Customer: replied 3 years ago.

Hello, It is for an individual, she has opened a LTD here and is selling her company abroad. She is will get her payour gradually, into a UK account, what are the tax implications of this in the UK?


As she is transfering one sale into another UK company start up, what options does she have?


What is the limit of money bringing into the UK without being taxed?


Can she invoice her supliers without paying herself a wage yet?


 

Expert:  taxadvisor.uk replied 3 years ago.

Clare, thank you for your reply.

If the individual sells the business before coming to the UK and becoming a resident for tax purposes, then any gain from sale of that business abroad would escape UK tax. Any funds remitted would also escape tax provided these funds were deemed capital before arriving into the UK.

If the individual has relocated to the UK and now wishes to bring that money into this country then she has a choice of electing to have

- all worldwide income and gains liable to UK tax on arising basis
-
elect for remittance basis alternative tax treatment

The remittance basis of tax treatment is covered under Sec 5 (pages 22-28) with examples of both less than/more than £2,000 unremitted foreign income/gains . here is a link to HMRC 6

http://www.hmrc.gov.uk/cnr/hmrc6.pdf

Monies transferred would form part of initial capital injection/director’s loan.

She can invoice her customers without paying herself a wage yet. Instead, she may wish to consider paying herself a dividend at say quarterly intervals.

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 3 years ago.

hello


 


Ok so I had to look at the link to read some more as I didnt't quite understand the remittence bit.


 


Ordinarlly she will be here and the UK company is here, for Tax purposes which is better for a foreugn national


"decide that you are not resident, or not ordinarily resident, or not domiciled in the UK' as this is still a little confusing.


Kind Regards

Expert:  taxadvisor.uk replied 3 years ago.
Clare, thank you for your prompt reply.

You become a resident of this country if you live here for 183 days or more irrespective of your nationality. If the individual is relocating to the UK and has set up a company here, the intention must be to live here and make UK home.

Residence and ordinary residence are two different things. This is better explained under Sec 3.2 and Sec 3.3 on pages 9 and 10.

In answer to your question which is better for a foreign national, all depends on individual circumstances and level of foreign income/gains when living in the UK and whether to pay tax on worldwide income and availing UK personal allowances or opting for remittance basis tax treatment.

Normally, wealthy Foreign Nationals with significant unremitted foreign income/gains tend to opt of remittance basis. see sec 5.5.2 on page 25.

I hope this is helpful and answers your question.


Customer: replied 3 years ago.

Does the residency start from the date NI number applied for?


 


As you need a NI number to recieve payment from company?


 


Q2:as I sale of company is being prepared now, would the money from the sale of the company coming into UK be classed as taxable or not? with the Ni number already obtained?

Expert:  taxadvisor.uk replied 3 years ago.

Clare, thank you for your reply.

Residency starts from the date you enter the country and not when you apply forNI number.

You need a NI number to draw a salary from the company/employer. If it is your own company then I have suggested alternative method - consider taking dividends as a shareholder/director of your company.

The money would be classed as taxable as the person is already in the UK.

I hope this is helpful and answers your question.

Customer: replied 3 years ago.

I have to go pick up my children, do i have a time limit for our advice?


 

Expert:  taxadvisor.uk replied 3 years ago.
Clare, come back at your convenience.

many thanks
Customer: replied 3 years ago.

HI


 


You said previously that you are a resident when you have lived for 183days, I am assuming this is consectively?

Customer: replied 3 years ago.

Sorry we are just trying to work out when the sale of the company will effect her TAX wise.


 


How much can she bring in as personal money? When and is it taxed?


Thanks

Expert:  taxadvisor.uk replied 3 years ago.

Clare, thank you for your reply

[Question]

You said previously that you are a resident when you have lived for 183days, I am assuming this is consectively?

[Answer]

It is 183 days or more in total in a tax year ..it need not be consective.

[Question]

Sorry we are just trying to work out when the sale of the company will effect her TAX wise.

How much can she bring in as personal money? When and is it taxed?

[Answer]

If she is not already in the UK, then she can bring all her savings to the UK when she first comes and there will be no tax as she would be bringing what she had before coming to the UK and it would cover period before she became resident here.

Once she is in the UK then remittance of any foreign income/gain will be within the scope of UK tax.Sec 5.2 on Page 23 outlines how remittance bisis works .. i.e. you will only be liable to UK tax on your foreign income and/or gains if and when you bring them (remit them) to the UK. See Sec 5.9 on Page 29 for definition of what is remittance.

I hope this is helpful and answers your question.

taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4882
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
taxadvisor.uk and other Tax Specialists are ready to help you
Expert:  taxadvisor.uk replied 3 years ago.
Clare, I thank you for accepting my answer.

Best wishes.

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