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Posted Tue, 27 Feb 2024 09:16:46 GMT by John TheKind
Good morning, For the situation described below, could you please advise on the following 2 scenarios: situation: A company C is incorporated in a country A, outside of the UK. The company C is tax resident in the UK. The company C pays out dividends. A shareholder S is the UK tax resident and is eligible for remittance basis. scenario 1: The shareholder S receives their dividends from the company C to their bank account in a country B, outside of the UK. The shareholder S claims remittance basis and never brings the monies to the UK or use it in or for any benefit related to the UK. Please confirm that that no tax is due in the UK on that dividend payment because S claimed remittance basis and never remitted money or any goods or services derived from these funds. scenario 2: The shareholder S doesn't claim remittance basis, receives dividends into their British bank account. Naturally, tax is due in the UK. Could you please advise if in the Self Assessment it should be reported under the UK section “Interest and dividends from UK banks and building societies” because the company C is tax resident in the UK or under “Dividends from foreign companies” because the company is incorporated in the country A, outside of the UK.
Posted Wed, 28 Feb 2024 09:37:34 GMT by HMRC Admin 25
Hi John TheKind,
1. As claiming the remittance basis and the income is not remitted to the UK, this doesnt need to be declared. see guidance here:
Paying tax on the remittance basis (Self Assessment helpsheet HS264)
2. It will be UK interest/dividends.
Thnak you.
 
Posted Fri, 22 Mar 2024 09:20:27 GMT by John TheKind
Thank you for your response. Just wanted to double-check on the scenario 1: It means that the fact that the company is located overseas prevails the fact that it's tax resident in the UK and hence there's no tax liability in the UK on dividends, provided remittance basis is claimed and the dividend is never remitted to the UK. Please confirm that my understanding is correct.
Posted Thu, 28 Mar 2024 09:46:43 GMT by HMRC Admin 25
Hi John TheKind,
You are correct,
Thank you. 
Posted Thu, 04 Apr 2024 18:49:04 GMT by John TheKind
Thank you for the confirmation. Could you please let me know if the same holds, i.e. no tax liability in the UK on dividends, in scenario 1 if the company C pays out the dividend from a UK bank account.
Posted Mon, 15 Apr 2024 12:17:04 GMT by HMRC Admin 32
Hi,

This would be UK income and if not UK resident would be classed as disregarded income.

Thank you.

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