UK Ltd Company - Non Resident Owner - Thailand & Dividends

[rhiannond]

Hi all, I've been lucky enough to start a successful business which has been building retained income/profits, but I'd like to optimize my personal tax situation. The company is a UK Ltd company and for the moment I'm ok with keeping it in the UK and paying all relevant taxes there, this is something that can be optimized later but my clients like to deal with a UK Ltd. Unfortunately I can only pay myself a small salary between 50-100k per year which I find quite limiting.

Fortunately, I can run things from anywhere and I'm keen to travel and see a bit of a the world...

I have been advised that I can move to Thailand (taking advantage of the Thai Elite Visa) and go UK non-resident by declaring myself so to HMRC (and not entering the UK more than a week or two per year). Once I have done this, I can then pay out as much in dividends as I like to my own bank account, and as long as I don't remit these funds to Thailand in the same year then they are not taxable. To me this seems the most efficient way to extract the company profits.

What I'd like to know is if anyone is successfully doing this? If so, have you had any issues with HMRC? Do you pay your dividends into a UK bank account or an offshore account? Have you managed to return to the UK after doing this or are you happy to stay in Thailand? If there's any advice or somewhere else I should look, please let me know. Thank you.

 

[Marzio]

Well if you use the LTD as a dormant partner of a UK LLP where you are the 100% partner resident in Thailand you'll live tax free.

 

[fshore]

Why can't you pay a higher salary?

Well if you use the LTD as a dormant partner of a UK LLP where you are the 100% partner resident in Thailand you'll live tax free.

The llp income is only tax free if not sourced/earned in the UK. If a UK Ltd is a partner then it might be difficult to claim that the income is not earned in the UK.

 

[Marzio]

If a UK Ltd is a partner then it might be difficult to claim that the income is not earned in the UK.

Not if is a dormant company. Dormant = non generating income.

 

[rhiannond]

Why can't you pay a higher salary?

Of course I could choose to pay myself a higher salary but the tax on any income above about 100k is quite steep.

The idea behind moving to Thailand to live and travel for a few years would be to pay out the retained profits without incurring that tax. So if anyone has any advice on doing this I'd love to hear from you.

I'm afraid I don't know much about this dormant LLP stuff. The UK Ltd company is still actively generating income and isn't or won't become "non generating income". Do you have any more information on this sort of setup?

 

[Marzio]

I'm afraid I don't know much about this dormant LLP stuff.

LLP stands for "limited liability partnership" and is tax transparent while LTD stands for "limited company" and pays corporate taxes.

Since LLP is a partnership, the income is not taxed at the company level like a LTD would do but instead is taxed at the partner level where he reside.

Since you reside in Thai you will not get taxed as long as you don't remit these funds to Thailand in the same year.

Since LLP requires two partners you will be one with 100% of ownershop and your LTD will be the second with 0%

The LTD is there basically just to be the second partner and it will not do anything other than that, that's the meaning of dormant.

It is a really easy setup for you, cheap and works.

 

[fshore]

Not if is a dormant company. Dormant = non generating income.

How can it be not generating income if its a partner in the LLP that is generating income?

Of course I could choose to pay myself a higher salary but the tax on any income above about 100k is quite steep.

There would be no UK tax on the salary if you are UK non resident.

 

[Marzio]

How can it be not generating income if its a partner in the LLP that is generating income?

A partner with 0% of the share of profits, that's how.

 

[fshore]

A partner with 0% of the share of profits, that's how.

I'm not convinced that this will work. It could of course work until you got questioned by HMRC. Would be better to use another country's ltd as the partner.

 

[Marzio]

Would be better to use another country's ltd as the partner.

Of course it would be better not to have any UK partners (even if dormant) to avoid any questioning from HMRC but he could use the LTD as a "momentary" partner while registering a US LLC as the second partner to avoid losing any income in the meantime.

 

[rhiannond]

I'm sure at all about the LLP stuff, if possible I'd prefer to keep corporate structure untouched at least for now.

As @fshore said, I'm trying to have 0% tax on my personal income (from dividends not remitted to Thailand in the same year). I would like to know or chat with anyone who is or has done this, or hear any advice on this before I commit to the big move.

I really just want everything above board and to be able to show to HMRC, I'm legitimately non resident, and pay my taxes in Thailand, if they ever asked. Just looking for others experiences and advice here so if possible I'd prefer to stay away from any LLP magic.

 

[fshore]

I'm sure at all about the LLP stuff, if possible I'd prefer to keep corporate structure untouched at least for now.

As @fshore said, I'm trying to have 0% tax on my personal income (from dividends not remitted to Thailand in the same year). I would like to know or chat with anyone who is or has done this, or hear any advice on this before I commit to the big move.

I really just want everything above board and to be able to show to HMRC, I'm legitimately non resident, and pay my taxes in Thailand, if they ever asked. Just looking for others experiences and advice here so if possible I'd prefer to stay away from any LLP magic.

If you become UK non tax resident then this should be easy. There are guides and flow charts on the HMRC website to determine when you are (non) tax resident. It doesn't matter if you pay dividends into a UK bank account.
Generally the cases where a UK bank account matters is if you are resident, non domiciled in the UK, then you don't want to get paid into a UK account.

 

[sherwoodcap]

LLP stands for "limited liability partnership" and is tax transparent while LTD stands for "limited company" and pays corporate taxes.

Since LLP is a partnership, the income is not taxed at the company level like a LTD would do but instead is taxed at the partner level where he reside.

Since you reside in Thai you will not get taxed as long as you don't remit these funds to Thailand in the same year.

Since LLP requires two partners you will be one with 100% of ownershop and your LTD will be the second with 0%

The LTD is there basically just to be the second partner and it will not do anything other than that, that's the meaning of dormant.

It is a really easy setup for you, cheap and works.

Wow. Is this for real?
If this is legit it would be perfect for my situation.

I'm sure at all about the LLP stuff, if possible I'd prefer to keep corporate structure untouched at least for now.

As @fshore said, I'm trying to have 0% tax on my personal income (from dividends not remitted to Thailand in the same year). I would like to know or chat with anyone who is or has done this, or hear any advice on this before I commit to the big move.

I really just want everything above board and to be able to show to HMRC, I'm legitimately non resident, and pay my taxes in Thailand, if they ever asked. Just looking for others experiences and advice here so if possible I'd prefer to stay away from any LLP magic.

Your situation is similar to mine at the moment. I have a UK company generating revenue. I'm not paying myself a salary, rather through dividends as a non resident.
How did you get on with this in the end? Has it worked out OK in Thailand?

 

[lostguy]

That may work well, problem I see is that you can't remit the money to Thailand as it stands. You want to put something in-between to get the money out and get it taxed maybe in Thailand if there is no work around.

 

[churumbelo]

Of course it would be better not to have any UK partners (even if dormant) to avoid any questioning from HMRC but he could use the LTD as a "momentary" partner while registering a US LLC as the second partner to avoid losing any income in the meantime.

Hi Marzio! Could I please speak to you about this? It is not possible to reach out to you.. I also opened the following thread where we are discussing it. Thanks!

https://www.offshorecorptalk.com/th...d-or-us-llc-as-a-partner-legit-business.42377
Also this one in the public forum, but no answers so far (same text):

https://www.offshorecorptalk.com/th...-or-us-llc-as-a-partner-legit-business.42380/