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Posted Wed, 17 Apr 2024 15:28:45 GMT by asm2545w
Hi, I am moving to Portugal on the 28th June 2024 to stay there and not sure if I will come back to the UK in the next 5 years, but maybe I will have to. In total, this financial year 2024/25 I'm going to be 84 days in the UK and working around 58 days. Based on the previous details I went through the Statutory Residence Test (SRT) twice and it seems that the UK will consider myself UK tax resident this financial year 2024/25, but if the "split year treatment" applies to me the UK will treat me as UK resident up until the date of my departure 28th June 2024 and non-UK resident for the time abroad (I must then be non-UK resident in the following tax year 2025/26), but this is something I need to find out, or maybe some of you already know and you can clarify this for me. Under the NHR regime and once in Portugal, dividends paid from my UK limited company to myself are exempt from taxes in Portugal. My accountant told me last week that if I return to the UK in 5 years time I will have to pay taxes in the UK for the dividends paid to myself from the UK limited company when I'm in Portugal, which is very rare. Few people have already told me that this is not correct, but I think it depends on the interpretation of the different scenarios. Let me give you few scenarios: A) I'm moving to Portugal on the 28th June 2024. I will not pay myself any dividends from this financial year 2024/25. I will stay the whole 2025/26 financial year in Portugal and I pay most of the money in the UK limited company to myself as dividends (leave the necessary money in the limited company to pay corporation tax and other stuff for this financial year 2024/25). I will come back to the UK and stay the whole financial year 2028/29 in the UK. Will I have to pay taxes from those dividends in the UK in 2028/29? B) I'm moving to Portugal on the 28th June 2024. I will pay myself £35K dividends from this financial year 2024/25 once in Portugal, let's say in August 2024. Now we have two alternatives: B.1) If the UK will treat me as a UK resident in 2024/25, I will have to pay taxes for the £35K dividends in the UK, but not in Portugal. B.2) If the "split year treatment" applies, the UK will treat me as a non-UK resident in 2024/25 after 28th June 2024, so I will not have to pay taxes for the £35K dividends in the UK nor in Portugal, considering I will be non-UK resident in 2025/26 (requirement for the split year treatment). Can you please clarify for me that all these scenarios are correct? One last thing, in scenario B.2, if instead of £35K I pay myself £200K as dividends once in Portugal, will this change anything? Regards, Alvaro
Posted Tue, 23 Apr 2024 14:22:36 GMT by HMRC Admin 5
Hi

HMRC cannot comment on future events as legislation and/or plans may change. for current guidance please refer to Tax on your UK income if you live abroad

Thank you

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