tax residence and dividends

[williaa68]

As I understand it, if I spend less than 16 days in the UK this tax year I am automatically non-resident. If I am not resident and while non-resident pay myself a large dividend, does it matter if I am not tax resident anywhere else? Eg if I spend a year travelling leaving next week and only coming back in April 2020, can I receive a large tax free dividend while relaxing by the pool in Bali? I would obviously only spend a few weeks in each location so wouldn't trigger residence requirements anywhere else.

[coletrickle01]

Where is the company paying the dividend resident - is it in the UK?

[JulianPH]

It is often where the individual lives that is more important that where the return was generated.

In Portugal, for example, there is zero tax to pay, for the first 10 years, on any income that could be taxed in another country.

This is very different to saying it has been taxed in that country.

So this includes dividends.

However, HMRC now insist that you must have moved you whole universe to another country and severed all links with the UK. This is not what the law actually says, but that doesn't matter to HMRC.

[coletrickle01]

The starting point here is that if you are Non UK resident and have UK source income (which a dividend paid by a UK resident company is) then that income will be subject to tax in the UK.

As Julian points out tax residency is often not a straight forward matter but if you were to become resident in another country then the taxing rights of the source state vs the state of residence of recipient of a dividend will be covered by any tax treaty between that country and the UK.