tax return about Hong Kong registered private unlimited company

Hi, I registered a private unlimited company in Hong Kong on 10th Oct 2022. According to the law of Hong Kong, I will receive tax return form 18 months after the registration date of a newly opened company. It will be around April 2024. I migrated to the UK on 5th November 2022 using BNO visa. I suppose I am a UK tax residence for the tax year 2022 – 2023 (with split year treatment). I know that the profit from my unlimited company registered in Hong Kong is subject to the UK tax. My questions: 1) How should I submit this to HMRC? I am confused whether this should be submitted through SA103 (Self-employed) or SA106 (overseas income) 2) I suppose I can have the double taxation relief to avoid being double taxed in Hong Kong and the UK. Should I submit the related tax return to HMRC AFTER I settle the related tax payment in Hong Kong (which will be after April 2024)? OR should it be fallen into the UK tax year of 2022-2023? 3) Because the business is based in Hong Kong, most of the invoice and sales documents are in Chinese, how should I deal with it when submitting related tax return to HMRC? 4) Am I subject to dividend tax if i draw the profit from my private unlimited company? Thank you!

Hi Alley Yim,

1.If tax is paid in Hong Kong, you will show this under both self employment and foreign income in order to claim the foreign tax credit relief.
If no tax paid, it is just under the self employment page.  
2. you need to file the return based on the UK dates. you can amend it at a later date for the tax paid in Hong Kong  
3. HMRC don't need to see the paperwork for your business and as long as the income/expenses are declared in sterling there is nothing else required at this stage  
4. dividend tax is only applicable if you receive dividends over £1000. If this is how you intend to take the profit from your business then yes you will be liable to this.

Thank you.
 

Thanks for your reply. For this private UNLIMITED company registered in Hong Kong, the income and expense will be declared as self-employment, and therefore I am subject to INCOME TAX for the profit (i.e. income minus expense) of this business. On the other hand, as per point 4 above, you mentioned that i will be further subject to dividend tax if it take profit from this business. However, this would double the tax for the profit (i.e. income minus expense) because i need to pay income tax as well as dividend tax for that amount of money. Is my understanding correct? OR dividend tax is ONLY apply to limited company but NOT private UNLIMITED company (which is a kind of self-employment)? Thanks

Hi,

The advice was that if you took the income as dividends rather than profit you would be liable on the dividends. You will not be taxed twice.

Thank you.