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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3822
Experience:  FCCA FCMA CGMA ACIS
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I am an ex***** *****ving in Spain and director and shareholder

Resolved Question:

I am an ex***** *****ving in Spain and director and shareholder (1 of 2) of a uk company which is less than 1 year old. As I have been building the business I have not taken a wage either in Spain or UK and as it is approaching end of tax year I would like to draw a small wage and looking at ways to pay into a pension or investment with other monies with tax relief or getting the company to pay the pension/investment on behalf of me.. Whatever money I earn must be claimed in Spain and possibly taxed at a higher level to I am looking at ways to plan better
Submitted: 1 year ago.
Category: Tax
Customer: replied 1 year ago.
I understand I can look at taking a dividend however given that my partner may not opt for this option and is the major shareholder (Spanish).
Customer: replied 1 year ago.
I would like to try to pay myself before the end of the UK tax year April 2016 and possibly make the payment pension/investment by the company before this date.
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. As a director you are an employee of the company per se. Any wages paid by the company must be paid under PAYE arrangements. Dividends, if declared by the company, must be paid equally to all shareholders in proportion to their holdings. Dividends, unlike salaries, do not count against a company's Corporation Tax (CT) assessment. Pension contributions, the aggregate of yours and your company's contributions may not exceed 100% of wages of GBP 3600 if wages are below this level. Wages paid by the company will be taxable in the UK, but under the Double Taxation Convention between the UK and Spain cannot be taxed in both jurisdictions. This is achieved by means of tax credits, any tax paid in one country being allowed as a tax credit against any liability in the other on the same income stream. I do hope that you have found my reply of assistance.
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Customer: replied 1 year ago.
Hello Keith, I was thinking about paying myself GBP8060 or GBP10600 and then arranging for a payment of GBP3600 into a pension. I understood that what I earned in UK which in this case upper limit GBP10600 would only be subject to personal company NI contributions in UK, yet in Spain I would need to pay 25% tax at this level so would end up paying 25%. I am sorry for my ignorance on double tax treaty. At this stage I am not drawing a wage in Spain until the branch here starts business. As I am one of two shareholders and my partner who is Spanish and the major shareholder does not wish to take dividends it makes it difficult for my options.
Expert:  bigduckontax replied 1 year ago.
Thank you for your support.

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