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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4195
Experience:  FCCA FCMA CGMA ACIS
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I am UK resident for tax purposes and have been resident for

Customer Question

I am UK resident for tax purposes and have been resident for more than 10 years. I am not UK domicile do. I do not have income in UK. My husband is employed in UK and pays UK taxes. My wealth is in India. My indian wealth is parked in a private limited company owned by me. The company has significant profits but has not and is not expected to declare dividends. Am I liable to tax in UK on the profits of the Indian Company owned by me.
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I'm Keith and happy to help you with your question.
In a word no, the company and you are entirely different legal persons. The company's income is not liable to UK taxation. The company and you personally may be embraced by the Indian tax regime which is beyond the scope of this site which is essentially for UK tax advice.
In any event, there is a Double Taxation Treaty in place between the UK and India which precludes the same income streams and capital gains being taxed in both jurisdictions. Furthermore any tax deducted by the Indian authorities would be allowed as tax credit against any possible UK liability in any event.
I do hope I have been able to set your mind at rest on this matter.
Customer: replied 2 years ago.
Would CFC provisions apply to charge tax on the profits of the Indian Company.
Expert:  bigduckontax replied 2 years ago.

The CFC rules are there to provide for profits being diverted from the UK to low tax regimes. In you case your wealth was already existing in India and has not been so diverted, so I submit that the CFC provisions do not apply.

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Expert:  bigduckontax replied 2 years ago.
Thank you for your excellent support.