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TonyTax
TonyTax, Tax Consultant
Category: Tax
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Will my husband be better off taking out dividends from a UK

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Will my husband be better off taking out dividends from a UK based company as a resident or non-resident?
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi. As of now in 2015/16, a non-UK resident individual would have no tax to pay on UK dividends beyond the notional non-repayable tax credit a dividend is deemed to be paid net of. Whether that tax credit is deductible from the tax liability in the country of residence of the individual depends on the local tax regime. As of now in 2015/16, a UK tax resident individual has no tax liability on dividends at the basic rate. A higher rate taxpayer pays tax at an effective tax rate of 25% of the cash dividend. An additional rate taxpayer pays an effective rate of 30.55% on dividends above an income of £150,000. If you are UK tax resident, from 6 April 2016, you will have some tax to pay on dividends even if you are a basic rate taxpayer if your dividend income exceeds £5,000. Take a look here and here for more information on that. Higher rate taxpayers will alsp pay more tax on dividends. It is not yet clear whether, as a result of the abolition of the notional tax credit on UK dividends from 6 April 2016 which is currently deemed to satisfy a non-UK resident individual's UK tax liability, that non-UK resident individual will now have UK tax to pay on UK dividends and, if so, how much it will be and how it will be enforced. It could be that UK dividends paid to non-UK resident individuals will have tax withheld but that will be an administrative nightmare. If there is to be a liability, it's unlikely to be any more than a UK tax resident individual will pay so any change could be significant. I hope this helps but let me know if you have any further questions.
Expert:  TonyTax replied 1 year ago.
Hi.I'm just following up to find out if my answer helped or if you have any further questions.
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