Working abroad with company in UK

JodieR

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.

Monsoon

Is his wife also in Dubai?

If she is in the UK, keep the company in her sole name until he returns. Simples?

JodieR

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

Monsoon

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.

JodieR

thanks... phoned HMRC.... on hold for 15 mins... told to write in with the facts and someone will make a decision. what a hassle!