UK non-dom remittance basis for professional work done offshore

[Elijah Ferraris]

I'm considering moving to the UK and ask for the non-dom status with remittance basis.
While I know it is better suited for passive income, I was wondering if it can also work in my case:
I fully own and run a seasonal business in Malta - it basically happens for 2-3 months out of the full year.
It does require some preparations and decision making before the season starts.

Assuming that I will:
- live in the UK for most of the year
- have an employee in Malta operating the needed day-to-day preparation for the business
- travel to Malta to operate the business for the whole season
- travel (either to Malta or anywhere outside the UK) probably 1 week every month to make decisions and sync with the local employee
- never do any related work in the UK (Not answering any work-email, no phone calls, no contact with the malta employee/office etc.)

In that case - can the HMRC still claim that the control & management is done from the UK since I'm a UK resident, or as long as I really perform 100% of my duties only outside of the UK, then that income wil not be taxed (unless remitted to the UK)?

Note that at the moment I'm the 100% shareholder, sole director and sole employee of the company in Malta.
I assume I will at least need to quit as an employee - and perhaps set a local director? (Or can I keep being a director as long as I perform my duties only when I fly in to Malta)?

Thanks!

 

[Konstanz]

If you can prove works done in Malta I think you are pretty safe.

 

[Traveler]

The UK side of things will indeed likely not give you issues, but just to make it clear ... you're happy to pay the 35% CIT in Malta, correct?

 

[Clip]

Better get tax resident in HK, Singapore or Malaysia and live in UK from an overseas company salary director

 

[CaptK]

Does it have to be UK or can you live anywhere else.

 

[Martin Everson]

I'm considering moving to the UK and ask for the non-dom status with remittance basis.

Why not just stay in EU and move to Ireland and get the non-dom status there? The non-dom status there is better as its indefinite. You can move there also freely as an EU citizen which maybe not possible in UK after brexit. We also don't know what is happening with UK after brexit. The UK tax laws will almost certainly change and a push to have non-doms pay the non-dom fee earlier into their residency is a possibility.

Please note in general non-dom status is suited to passive income earned abroad. So acting as a shareholder and receiving dividends offshore is fine. However for offshore active income and acting a director you will go to war with HMRC. You are best to then get approval from HMRC of your tax plans via a local tax advisor if you are serious. Or simple ask a tax advisor to confirm your model is correct for non-dom status as CFC rules are a pain.

 

[Elijah Ferraris]

Thanks for the answers everyone -
@martin - We want to live in London. However, we can consider Dublin - the question is, in the setup I mentioned, is it problematic in the same way? Are the Irish tax authorities as strict as HMRC?
@Traveler - I already have an arrangement in Malta, more concerned about the UK side
@GigiGo - I'm with a family and we will spend most of our time in London, so I can't really be a tax resident only in the places you suggested - as far as I know the HMRC will see me as a tax resident in the UK

 

[Martin Everson]

@martin - We want to live in London. However, we can consider Dublin - the question is, in the setup I mentioned, is it problematic in the same way? Are the Irish tax authorities as strict as HMRC?

Is the income you are getting for 2-3 months of the year worth the cost of living somewhere decent in London, traveling once a week to Malta and paying for a local director? Are you a Malta citizen? The setup sounds reasonable but you would need to document your flights, place of board meetings etc very well but you will still get hassle.

Tax authorities in Ireland are not as tough as HMRC in UK. But living in Dublin is not comparable to living in London.

 

[Elijah Ferraris]

Thanks Martin - and yes, the business is yielding a substantial amount of money.
Everything you say makes sense - I indeed plan to document everything, and make sure I don't perform any work at the UK.
I'll also ask a local tax advisor, but I know that in the end if the HMRC will ask questions - I'll be the liable one to answer...

 

[CaptK]

Your problem here lies in the jurisdiction of the company not where you want to live.

Regardless HMRC will say that you take calls and reply to emails during the year to prepare for the event. Safest way to do it is to expense your life in the UK from the company. A suitable contract would be in place.

A salary which taxes are paid to the UK of about £20K. £12,500 is tax free the balance is taxable at approximately 20% (£1500)

Renting your property via the company. You will be asked to pay the full rent upfront as they are offshore company.

The company buys or leases the car and covers the insurance and maintenance.

Company credit card for all your purchases and the proper accounting by keeping all receipts which are submitted monthly.


Your solution would be to move the Maltese business anywhere else to somewhere more tax efficient. This doesn't stop you from doing business there and CIT is no longer an issue.

Following the steps above takes you off the radar.

If you would like to doscuss further feel free to email me.