Ireland or UK Non-Dom and Central Management and Control (CMAC) Provisions

[Jmeery1]

Hi. I was wondering if anyone had any experience with running into trouble with CMAC provisions as a non-dom in either of these countries?

I am going to be moving to Ireland, but I hold a 100% owned HK company where I make investments. Whilst living in Ireland, from a personal tax perspective I'll only be taxed on income remitted into Ireland.

However, if my overseas company makes a profit, could that be taxed as an Irish tax resident company under CMAC if I am living in Ireland?

And, is there any reason I could simply make sure that the company never makes a profit, by paying myself directors fees to a non-Irish bank account (not remitted into Ireland)?

If anyone can help with this, or has experiences with CMAC, that would be great. So far, the accountants just give a vague answer.

 

[John Andrews]

Can you get a tax residency certificate for the Hong Kong company? Do you have an office in HK, a local director and/or employees?

If the answer is no to either of those questions then the HK company is resident in Ireland and you'll have to file accounts in Ireland.

 

[Martin Everson]

I am going to be moving to Ireland, but I hold a 100% owned HK company where I make investments.

Place of control, management and operation of HK company will come into play. If company is controlled by you from Ireland than forget it. It cannot be considered offshore activity. Generally speaking the non-dom status is suited towards passive personal and corporate income and holdings held offshore. So if it is passive investment company rather than an active one you may be ok. But having an active company with the place of operation and control in Ireland won't fly you really want to make sure the operations and management of company is outside Ireland. You can ust move investment assets into your personal name offshore and keep offshore and that solves it.

If you want to be 100% sure get professional tax advice.

So far, the accountants just give a vague answer.

Be aware that anybody helping you with a non-dom structure in EU by law now has an obligation to to report your structure following DAC6.

 

[Jmeery1]

Thanks Martin, sounds like that is exactly what I need to do - put the assets in my personal name. Appreciate your advice.

 

[Jmeery1]

Martin, another quick question on this. For the money you remit before moving (ie pre existing capital), once it has been remitted, did you just leave it in cash for living expenses (and only invest money outside the UK) or did you invest the funds that were inside the UK too and pay tax on the gains from those investments?

 

[Martin Everson]

Martin, another quick question on this. For the money you remit before moving (ie pre existing capital), once it has been remitted, did you just leave it in cash for living expenses (and only invest money outside the UK) or did you invest the funds that were inside the UK too and pay tax on the gains from those investments?

Left all in cash and invested outside UK.

 

[Jmeery1]

Did that mean you brought so much in that you had a lot of cash doing nothing but sitting in the bank? Or did you have some other way of bringing cash in from overseas as needed, tax free?

I'm considering using an interest free loan note from a non-resident company that will pay me back instalments, but are there are any other ways to do it that you've come across?

 

[Martin Everson]

Did that mean you brought so much in that you had a lot of cash doing nothing but sitting in the bank? Or did you have some other way of bringing cash in from overseas as needed, tax free?

If you remit capital from abroad into UK you don't pay tax with non-dom status. You are taxed only if you remit income and capital gains. So I just brought in capital from a pile of capital I held offshore when I needed to - no tax to pay. Capital is not taxed whether in UK or held abroad.

I'm considering using an interest free loan note from a non-resident company that will pay me back instalments, but are there are any other ways to do it that you've come across?

Yes there are but only worth doing if you are remitting over 100k and have a relationship with an overseas bank with a branch in the UK.