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bigduckontax, Accountant
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We have a client who has formed a UK private limited company

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We have a client who has formed a UK private limited company and is the major shareholder of it. However, she currently lives in Saudia Arabia but has a British Passport. Would she need to file a UK tax return is she receives dividends from the company? Will she also be liable to pay taxes in the UK even though she is based in a foreign country and will only be doing private events in the UK?
Hello Paul, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with you question. Firstly, when she left the UK for Saudi Arabia did she complete a Form P85 and send it to HMRC? If she did not she should do so immediately, fortunately there is no time limit as to its submission, it is available on the web and can be filed on line. On receipt HMRC will classify her as non resident for the tax year after her date of departure and furthermore split the leaving year into two potions, one resident and the other non resident. Even as non resident she is still liable for UK Income Tax on these dividends, see HMRC Advice Note SAIM1170 viz: ' A non-UK resident person is taxable on savings and investment income taxable under Part 4 ITTOIA05 only on income arising from a UK source (ITTOIA05/S368 (2)). ' However, for the moment dividends received will have with a notional 10% tax deducted (system changes in the 16/17 tax year). However, if her dividend income does not exceed her personal allowance of 10.6K, available to all EEA citizens, then she will have no tax to pay anyway. There is no requirement for her to self assess unless she is in receipt of income which has not been taxed at source. If, of course, HMRC require her to self assess she must comply irrespective of her level of income. Once classed as non resident she must not exceed 91 days in the UK in any one tax year. In theory this can be averaged out over four tax years, but the general consensus of opinion amongst experts on Just Answer is never to exceed the magic 91 days. I do hope my reply has clarified your client's position. Don't forget the P85, it will make life much easier for her.
Customer: replied 2 years ago.

Dear *****

She has not actually left Saudi Arabia to live in the UK. She comes to the UK intermittently for events. Does that change anything or she is considered a non-UK tax resident so long as she spends less than 91 days in the UK?

As she receives dividends from the company, are you saying she would not need to declare those on her UK Self-assessment tax return if they are less than her annual personal allowance of £10,600?

Since the company was incorporated in the UK, will it allow her to use the company name around Europe for other events since she is in the jewellery business?

Thanks for your help.

Kind regards


I gathered that from the question Paul. As I told you she should complete a Form P85 which she should do as she quit the UK to ensure that HMRC have her classified her as non resident. One so classified she remains non resident provided she does not breach the 91 day rule I set out in my original answer. I am not saying she need not declare them on self assessment, indeed she must. What I was saying is that there is no requirement to self assess unless in receipt of income which has not been taxed or one is required by HMRC to self assess. The use of the company name world wide will cause no problems. The company's profits will, of course, be taxed under the Corporation Tax (CT) regime. Don't forget that dividends do not reduce the company's exposure to CT, unlike directors' fees, salaries and the like which do. Please be so kind as to rate me before you leave the Just Answer site.
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