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Non Resident Tax Q&A
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Non UK Resident Tax Consultancy Questions
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Incorporation Overseas
Question: I own 91% of UK company, that has traded for 23 years in UK. I am considering moving overseas, probably Cyprus. Can i re-incorporate the UK Co. in Cyprus, and take dividends overseas whilst resident in Cyprus. . . .
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Non resident capital gains tax questions
Question: Thank you for your reply for Mrs X above. Before Mrs X leaves the country to be a non resident what formalities must she complete here. Also am I right to assume that: 1) if she leaves before April 6 (or within 90 days from this date?) and has been paying the 30K charge - her overseas income/gain for 2010-2011 will be outside the scope for any UK taxes for this income/gain 2)if she has to visit the UK above her 90 days (to deteremine her UK residence) to attend a wedding or for Medical treament then such days would not be included to calculate number of days spent in the UK. Would the number of days allowed to spend in the UK change if she went overseas for employment? 3) If she were to gift her overseas assets while being a non-resident and then return within 1 or 2 year - are there any factors to effect this gift on her return. Thank you . . .
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Stamp duty on transfer of UK property to offshore company by non resident
Question: I have just become non-resident and intend to transfer 3 properties into a UK limited company in the next tax year. I think I understand the position on capital gains but require some information on Stamp Duty. At the moment the properties are owned by me and have a mortgage. It is my intention to sell the properties to a limited company who's shareholders are my 3 children. The limited company will refinance the mortgage and the remainder of the equity will be a loan to me , which I will draw down as part of my pension. It is my intention to gift some of this loan account to the other directors ( my children) to start the 7 years rolling for inheritance tax purposes. My question is does the value of the property have to be at market price for stamp duty. I do not intend to own any shares in the company purchasing the property. Finally, does the 5 year rule for capital gains tax for non residents start from the date of sale or is it just 5 years in total and any sales during that time are free of UK capital gains, thanks . . .
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Extracting retained earnings from a UK company
Question: Dear Wealth Protection I am moving to a Caribbean low tax country to run my UK consulting company and to make residency in the Caribbean. This business does not carry out any duties in the UK. I have built up after tax retained earnings in my UK LTD company and wish to explore a tax efficient method of extracting those profits after I become UK non resident. Presuming I move to a country with low capital gains / low tax income I think either of the following may work- 1) Declare a dividend to pay the retained earnings from the UK LTD. This would not be taxable dividend income in the UK as I am non resident. 2) Wind up the UK company and the proceeds on wind up would be in the form of a capital gain distribution. This would not be taxable capital gain in the UK as I am non resident. Both 1) and 2) would be subject to taxation in the Caribbean country but not the UK. Is this approach correct? Are their any common pitfalls to watch out for? Many thanks, . . .
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Gibraltar category 2 status
Question: Good afternoon. My wife & I are considering taking up residency in Gibraltar 1) I know the application fee for HNWI status is £1,000 and have read that, when obtained by an individual, it also covers his spouse and family; is this correct? 2) I note the maximum tax payable for a HNWI is £26,000. The majority of our investments are in joint names; will my wife also be subject to a maximum taxation payment of £26,000 or, indeed, will one payment of £26,000 cover both our tax liabilities? Thank you in advance for your answers. . . .
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Corporation tax for offshore company
Question: I am a non UK resident. My Non-UK /offshore company deals in buying cheap surplus stocks. My business is run solely from outside the UK Via the internet / fAx and email. I hardly spend more than a few weeks in the UK every year. I plan to buy a few surplus lots from the UK and EEC and stocking them in the UK for resale. I am trying to find the most easy and suitable way from the 2 options below. OPTION 1 I can use a distribution company to store and dispatch the goods when I get orders. Problems with this options are: 1) I will have to file long VAT and EEC returns as a non established unit which I am not very familiar with. 2) The distribution company has the possibility for making costly stock-picking mistakes by shipping the wrong part numbers out. 3) Customers prefer buying from a UK company. Alternately, I can sell all my stocks thru a UK trading company which knows the trade. There will be no contract with this UK company except an understanding that they will be offered a list of items at a particular price and they will have full access to the stocks. Surely the UK company will have to pay the usual UK taxes. As far as my company is concerned what steps should I take to ensure that I am not caught within the UK taxation laws. Would this UK company be classified as my agent. Do I have any better options. Thank you . . .
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SDLT/UK property in Overseas Company
Question: If you currently have property held by an overseas company, what are the SDLT implications if this property were to be gifted without consideration to a UK Ltd company? Also, what would the position be if the property from the overseas company passed instead to a UK resident & dom individual? Thank you . . .
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Offshore tax advice
Question: I have been living and working in the Bahamas since 21st July 2008 and have a 5 year contract. I left my London employer on 30 June 2008. I hold a Permit to Engage in Gainful Occupation (a work permit), renewed annually and am paid in Bahamian dollars. I would like to transfer some of my savings to London to take advantage of the current favourable exchange rate (the Bahamain dollar is linked to the US dollar). If I remit some of my savings before the end of my contract would I have to pay UK tax on the remittance? Should I wait until I return to the UK before remitting my savings to avoid paying any tax? I may return to the UK earlier in July 2011. Will this affect the tax situation? My wife is living with me in the Bahamas. She is not allowed to work here but worked in London until December 2008. She joined me in January 2009 and returned to the UK 3 times last year (Easter, Christmas and Summer) to see our adult children who live in our London home. She was in the UK for 102 days in the 2009/ 10 tax year. Does this affect my residency? Please can you advise me on our individual residency status i.e are we resident or ordinarily resident in the UK? . . .
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Tax assessment after emigration
Question: I will be permanently leaving the UK mid-way through a financial year. I understand that after the expiry of that financial year I will not be taxed on my non-UK sourced income. My question is how am I assessed for the remainder of the first financial year? Will I be assessed for UK tax on my non-UK income: (a) only that which is earned prior to my emigration; (b) all which is earned during the financial year of my emigration; or (c) a pro-rated (based on proportion of that year spent in UK) proportion of the income for that financial year? . . .
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Long term resident
Question: I understand that a long-term resident is not liable to pay taxes on its overseas income, whereas a permanent resident is. What is the criteria to be classified as a "long-term" resident as opposed to the "permanent resident" for EU-nationals? . . .
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Trading foreign exchange - using an LLP?
Question: Interested in anyone with relevant experience or advice - obviously to do it properly i will have to pay for detailed advice, but any comments would be welcomed. I have been a member of an LLP trading foreign exchange for several years (relatively successfully). This will eventually end and i wish to continue trading foreign exchange on my own. Given that returns are (hopefully) going to put me in top tax bracket, AND i am relocating to Scandinavia with family(the EU bit !) in 2 years, probably for long enough to become non resident, was looking at company vehicle until and perhaps beyond 2 years. There may be other partners (very few) but not decided on LLP/Ltd company yet on commercial grounds alone. The business has few physical assets but a large amount of working capital used as collateral - this must be loaned to the company initially. The drawing requirement is quite discrete - i am happy to leave most returns in company to draw off over long term - return of initial capital can easily fund me for several years. The Scandinavian country am relocating to is in EU and has options to draw fraction of capital from company at discrete taxation levels, but anything in excess deemed as income will be heavily taxed. Am primarily looking to slow down income drawings over a period to keep me out of relevant higher tax brackets - am happy to pay reasonable amount of tax but am reluctant to be hit heavily over what might be a short term earnings window. Does anyone have relevant experience with this sort of setup or circumstances. . . .
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Gift by a non-resident
Question: As UK resident and domiciled, if I am gifted a UK residential property by, a non-resident and non-dom person, and then I sell in the future can I count the market value at the date of the gift as the base price for my CGT purposes. . . .
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CGT on properties
Question: I have a small portfolio of rental properties in London. I would like to move from the UK and base myself in another country where I wont be liable for CGT when I eventually sell. Firstly What country would you recomend in Europe? Secondly since I am originally from South Africa I would consider that country too though I would not want to live there all year round. Thirdly can one sell up at the point of leaving and not return for 5 years to get the benefit on no CGT? Thank you very much . . .
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Return to UK - Minimizing tax on lump sums
Question: Expat for 20 years - back on same Company UK payroll as of 1st April 2010, but living in Holland until mid-July and then back to UK and resident thereafter. Will be made redundant 30th Dec 2010 and then early retirement. Large lump sum redundancy payment due January 2011. Pension has been paid into Company overseas pension fund. Propose to take immediate pension following redundancy and commute pension thereby taking a second large lump sum January 2011. Tax implications seem very significant. Can you recommend ways to ease the pain! Many thanks. . . .
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Extracting cash in company tax efficiently
Question: We have a Ltd Co registered in the UK, formerly a building company and now dormant due to retiral, with assets around £375,000 in cash. Our Accountant says that CGT is due if we wind it up. We enquire if this could be avoided by moving to a tax haven such as Gibraltar or if you have any other suggestions. . . .
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Offshore Tax Book
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Capital Gains Tax
