Working abroad with company in UK

JodieRJodieR Experienced MentorPosts: 1,002Registered
Client has been working in Dubai since June 2011 and intends to stay based there until May 2013 and therefore should qualify to be regarded as a non-resident while he's away.

He now wants to set up a Ltd Company with his wife so that when he comes back he'll have work to return to. There's also a chance that the company will start to generate money before he's back from Dubai.

So, at what point would he loose entitlement to ESC A11? would becoming a director of a UK company trigger this? or managing a UK company? or receiving dividends from a UK company? Or none of these? I've read it ESC A11 but it doesn't cover anything like this. Hope someone can help.

Comments

  • MonsoonMonsoon Font Of All Knowledge Posts: 4,071FMAAT, AAT Licensed Accountant
    Is his wife also in Dubai?

    If she is in the UK, keep the company in her sole name until he returns. Simples?
  • JodieRJodieR Experienced Mentor Posts: 1,002Registered
    That is an option, yes, but it's all a bit vauge & I'd quite like to know where the line is drawn, there just doesn't seem to be much guidence on it :(
  • MonsoonMonsoon Font Of All Knowledge Posts: 4,071FMAAT, AAT Licensed Accountant
    Fair enough.

    ESC A11, split year treatment, seems to me to be fine. It's about residency. Having a Ltd Co in a country does not make you resident. If he meets all the other non-residency tests then I would have thought it would be ok but like you say, something definitive would be nice.

    I would say he passes ESC A11 and qualifies.

    So now, look at the rules for non-resident directors of UK Ltds, maybe you will find something there. If it helps, I have friends who own Ltd Companies that are trading and they are non-resident for a few years while living abroad. They still get dividends etc. But that's a medium sized company - I don't know if an OMB is different.
  • JodieRJodieR Experienced Mentor Posts: 1,002Registered
    thanks... phoned HMRC.... on hold for 15 mins... told to write in with the facts and someone will make a decision. what a hassle!
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