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bigduckontax, Accountant
Category: Tax
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I am resident non dom in the UK been living here for 7

Customer Question

I am resident non dom in the UK been living here for 7 years.
I am setting up a import export company in Ireland, I will own 100% and probably be the only director. As I live in the UK I am thinking of making that Irish company managed and controlled from the UK (so it will pay UK Corporate tax). My questions is in regards ***** ***** dividends and profits of that company. If I take the profits and dividends for myself but pay it to myself outside of the UK (for example Luxembourg) and at the same time I pay the 30K UK remittance charge, as long as I do no bring those funds back into the UK am I correct in saying that I will not have to pay any UK income tax on it ? So I will only pay UK corporate tax and also the 30K remittance charge but nothing else ?
Thank you
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.

Hi. My name is*****'m looking at your question now and will post my answer or ask for more information here in a short while.

Customer: replied 1 year ago.
Hi TonyThanks. Could you confirm it will be today as it is quite urgent ?Thank you
Expert:  TonyTax replied 1 year ago.

I'm sorry. I meant to leave this question for another expert but I clicked on the wrong button. I will opt out so another expert can answer it.

Customer: replied 1 year ago.
HiSince you accepted the question first how long will it take to be referred to someone else ? as no one has yet taken on the question.thanks
Expert:  bigduckontax replied 1 year ago.

If you operate through an Irish company you will pay Irish, not UK, Corporation Tax (CT). Here is the general guidance on Irish taxation from KPMG:

'The corporation tax rate is 12.5% for active income from the conduct of a trade in Ireland. A corporation tax rate of 25% applies to passive income and to income from certain defined activities. Capital gains are taxed at 33% with a participation exemption for gains on disposals of certain shareholdings of 5% or more of companies resident for corporate income tax purposes in EU or income tax treaty states where the company being disposed of or the Irish parent and its 5% subsidiaries taken together are wholly or mainly engaged in carrying on activities in the nature of a trade.'

If you reside in the UK for over 183 days in any tax year you are liable to UK taxation on your world wide income so payment through a tax haven will not be of any benefit to you.

I am s o sorry to have to rain on your parade.

Customer: replied 1 year ago.
HiThank you for your reply. However if you are non domicile then you can fall under remittance correct and thus do not have to pay tax on income from outside the UK as long as those funds do not enter the uk. Also having been here less than 15 years.
My question was regarding if a foreign company making foreign profits is deemed managed and controlled from the UK will those profits when distributed be liable for full UK taxation even if they are distributed outside the UK and no remitted in ?
Expert:  bigduckontax replied 1 year ago.

Here is the Gov UK advice on the remittance basis:

'If you are taxable on the remittance basis you’re liable to UK tax in the normal way on your UK source income and gains. But you’re only liable to UK tax on any remittances (amounts) of foreign income and gains that you remit to the UK If you choose to be taxed on the remittance basis you must include these remittances on your tax return. The supplementary pages that you complete will depend on what it is that you have remitted. For example, you may need the ‘Capital gains summary’ pages, the ‘Employment’ pages or the ‘Foreign’ pages.'

Customer: replied 1 year ago.
according to that the Irish company would constitute foreign gains correct ? So my question even if that Irish company was deemed managed and controlled from the UK would the dividends from that still constitute foreign gains ?
Expert:  bigduckontax replied 1 year ago.

Well, if you have disposed of all or part of the Irish company, then yes. If the dividends remitted to the UK then they constitute foreign income not foreign gains.

Customer: replied 1 year ago.
the dividends which are foreign income (from this Irish company ) if they are not brought into the UK then no income tax is due ? Even if that company is deemed managed and controlled from the UK ?
Expert:  bigduckontax replied 1 year ago.

That is irrelevant, the income comes from foreign sources. Thus it is only taxable in your case on a remittance basis.