Thai With Uk Share Holding

[Kevin1908]

Can a Thai national who does not have any right to reside in the UK be a share holder in a UK company? Clearly they wont have a NI number but I see no reason why they can't hold shares and receive a dividend.

[samran]

of course you can - so long as there aren't any particular restrictions on foreigners holding shares in that particular sector - and in the UK I doubt there are many restrictions - if any - at all.

I hold shares in a couple of UK domiciled companies listed on the LSE.

Edited October 18, 2012 by samran

[Soutpeel]

yes they can, but I guess the thing you need to look at is any tax implications they may or may not be subjected to in the UK...

[Kevin1908]

ok that is what I am getting at. If I put the wife as a 50% shareholder in my own company UK HMRC aren't going to get all pissy about it or they going to expect her to complete a UK self assessment. I guess not as she in in Thailand and not a UK tax payer. UK dividend tax will be deducted at source. Just a bit worried that she doesn't have a NI number.

I think that HMRC should go after Starbucks that has over £300m turnover and pay f all UK corporation tax. In fact I pay more tax than they do.

[Soutpeel]

ok that is what I am getting at. If I put the wife as a 50% shareholder in my own company UK HMRC aren't going to get all pissy about it or they going to expect her to complete a UK self assessment. I guess not as she in in Thailand and not a UK tax payer. UK dividend tax will be deducted at source. Just a bit worried that she doesn't have a NI number.

I think that HMRC should go after Starbucks that has over £300m turnover and pay f all UK corporation tax. In fact I pay more tax than they do.

You would need to check with an accountant in the UK over what exactly any tax implications are, there may or may not be....the reason they dont go after Starbucks...Startbucks have better tax accountants than you, hence the reason I suggested you talk to one..

[chiang mai]

ok that is what I am getting at. If I put the wife as a 50% shareholder in my own company UK HMRC aren't going to get all pissy about it or they going to expect her to complete a UK self assessment. I guess not as she in in Thailand and not a UK tax payer. UK dividend tax will be deducted at source. Just a bit worried that she doesn't have a NI number.

I think that HMRC should go after Starbucks that has over £300m turnover and pay f all UK corporation tax. In fact I pay more tax than they do.

A nice try but no, you'll definitely have problems with that. The company you describe is almost certainly a "closed" company meaning that its shares are not freely traded and that the sum total of shares are held by a very small group of people, typically husband and wife. These are the sorts of company that most UK professionals use to lower their tax rate by paying themselves dividends instead of a salary and generally speaking the HMRC doesn't like them, especially if you are a computer contractor, If you are the latter for example you'll need to prove that you have several clients at the same time and that you are not obviously operating a tax dodge (most people are in this category). As for paying your wife dividends: you could do that if your UK company was a subsiduary of a foriegn company for example so that earnings from one could be offset against the other but that takes most of us into very complex territory. I would have thought that the best approach for you would have been to have an offshore umbrella company although without knowing more details about your business it's hard to judge. So, in summary, if your wife doesn't have an NI number yes, HMRC is going to get pissy about things.

Edited October 19, 2012 by chiang mai

[bangkockney]

The above reply is a little wonky.

You'll have no problem in making your wife a non-resident subscriber.

As long as her yearly dividends do not put her into the highest tax bracket (currently ~ £42k) there will be no UK tax liability.

If you read HMRC's guidance on their website, they suggest that a non-resident director will have to file a UK self-assessment tax return (however I believe there is no legislative requirement for this).

From the company's perspective, it may be better to pay your wife a salary as the payment will be deductible for corporation tax, whereas a divided would not. This benefit would have to be weighed up against the treatment of the receipt in her country of residence for her own personal tax position. Your/her accountant would need to carry out some remuneration planning around this point.

[chiang mai]

The above reply is a little wonky.

You'll have no problem in making your wife a non-resident subscriber.

As long as her yearly dividends do not put her into the highest tax bracket (currently ~ £42k) there will be no UK tax liability.

If you read HMRC's guidance on their website, they suggest that a non-resident director will have to file a UK self-assessment tax return (however I believe there is no legislative requirement for this).

From the company's perspective, it may be better to pay your wife a salary as the payment will be deductible for corporation tax, whereas a divided would not. This benefit would have to be weighed up against the treatment of the receipt in her country of residence for her own personal tax position. Your/her accountant would need to carry out some remuneration planning around this point.

You may be correct, but on the otherhand I'll be truly amazed if a closed company can spirit away up to 42k GBP in anual dividends to someone who is not resident, has no NI number and someone is not legally required to file a tax return, I must get my UK company back and restructure it, it all sounds really wonderful and too good to be true!

[chiang mai]

My apologies to the OP, I've just reread his post and for some reason, the first time around I read it as, "be a share holder in MY UK company", my reply was on that basis.

[Richard W]

My apologies to the OP, I've just reread his post and for some reason, the first time around I read it as, "be a share holder in MY UK company", my reply was on that basis.

You were right - post 4 identifies it as the OP's company.

You may be correct, but on the otherhand I'll be truly amazed if a closed company can spirit away up to 42k GBP in anual dividends <snip>

Don't forget that at least 20% is retained as corporation tax, and non-tax-payers don't get the corresponding tax credits.

[chiang mai]

My apologies to the OP, I've just reread his post and for some reason, the first time around I read it as, "be a share holder in MY UK company", my reply was on that basis.

You were right - post 4 identifies it as the OP's company.

You may be correct, but on the otherhand I'll be truly amazed if a closed company can spirit away up to 42k GBP in anual dividends <snip>

Don't forget that at least 20% is retained as corporation tax, and non-tax-payers don't get the corresponding tax credits.

Arghhh, I'm too young to be completely loosing it, thanks!

[bangkockney]

My apologies to the OP, I've just reread his post and for some reason, the first time around I read it as, "be a share holder in MY UK company", my reply was on that basis.

You were right - post 4 identifies it as the OP's company.

You may be correct, but on the otherhand I'll be truly amazed if a closed company can spirit away up to 42k GBP in anual dividends <snip>

Don't forget that at least 20% is retained as corporation tax, and non-tax-payers don't get the corresponding tax credits.

Arghhh, I'm too young to be completely loosing it, thanks!

Dividend pool is net profit less corporation tax.

Dividend payments are not taxed. It is not correct to say that dividend payments are subject to corporation tax. Dividends are taxed if the receiver is a higher rate tax payer only.

Thus one can take a salary of their tax free allowance and top up with dividends all the way to the higher bracket, ~ £42k, all tax and PAYE free. Or all in dividends.

[Richard W]

Dividend pool is net profit less corporation tax.

Dividend payments are not taxed. It is not correct to say that dividend payments are subject to corporation tax. Dividends are taxed if the receiver is a higher rate tax payer only.

Thus one can take a salary of their tax free allowance and top up with dividends all the way to the higher bracket, ~ £42k, all tax and PAYE free. Or all in dividends.

Note the very first line. The tax man has already taken (some of) his share even before you divvy up. The idea is that dividends come with tax credits that cancel out the tax for the standard rate tax payer, but if you don't pay UK tax, the tax man has already had his bite.

There are complications, such as companies paying dividends even when they have made a loss.