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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4198
Experience:  FCCA FCMA CGMA ACIS
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I am resident in the UK, I have a UK limited company and I

Customer Question

I am resident in the UK, I have a UK limited company and I also have a Hong Kong limited company. I would like to send profits from the UK limited company to the HK limited company. I plan on moving and becoming resident in Hong Kong in the next few years.
Submitted: 5 months ago.
Category: Tax
Customer: replied 5 months ago.
Hong Kong limited company tax is 0% on overseas profits. So basically I want to avoid paying UK tax and send the money to Hong Kong instead where it won't be taxed.
Expert:  bigduckontax replied 5 months ago.

Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

To move these profits just invoice from the HK company to the UK company for professional services for the sum involved. This is how all the big boys, Amazon, Starbucks and Vodafone, all operate although they use a maze of companies in offshore companies in places like Gibraltar, Panama, Channel Islands, Turks and Caicos Islands etc. You will have seen the furore in the media over the lack of payment of UK Corporation Tax (CT) as a result.

I do hope that you have found my reply of assistance.

Customer: replied 5 months ago.
Thanks Kieth - how do you then get it back into your personal account without uk tax... move country I guess?
Expert:  bigduckontax replied 5 months ago.

By moving it out of your HK company. That is the way to do it.

Customer: replied 5 months ago.
But I would still have to pay uk dividend tax rates on that income?
Expert:  bigduckontax replied 5 months ago.

Why should you; the first 5K is tax free anyway.

Customer: replied 5 months ago.
I'd be moving 100s of thousands- I read dividend tax on foreign dividends for uk residents on the higher income tax rates are 40%+... this is where things get confusing
Expert:  bigduckontax replied 5 months ago.

Or even 45% if you go into the higher bracket and you will loose your personal allowance at the rate of one pound for every two quid over 100K.

Customer: replied 5 months ago.
moving is the only option to reduce tax at this level?
Expert:  bigduckontax replied 5 months ago.

If you left it in the UK company the tax would be at 19%.

Customer: replied 5 months ago.
UK:
Corporation tax would be 19%
Dividend tax would 45%HK:
Corporation tax (on foreign income) would be 0%
Dividend tax would be 16.5% as an hk resident (with working visa)I also heard Dubai is 0% income or dividend tax
Customer: replied 5 months ago.
Or am I missing something here Keith?
Expert:  bigduckontax replied 5 months ago.

No, you are generally correct.

Customer: replied 5 months ago.
Thanks
Customer: replied 5 months ago.
Posted by JustAnswer at customer's request) Hello. I would like to request the following Expert Service(s) from you: Live Phone Call. Let me know if you need more information, or send me the service offer(s) so we can proceed.
Expert:  bigduckontax replied 5 months ago.

I would love to talk to you, but I am responding to you from a time zone 6 hours ahead of the UK making telephoning both impractical and expensive.

Please be so kind as to rate me before you leave the Just Answer site.