Dividends paid abroad

flyer

I run my own company. Can anyone advise whether it is possible for me to pay myself a bonus or dividend into a foreign bank account with a view to buying a property abroad?

Cook_County

I see no reason why you cannot pay bonuses or dividends where you like. Why would this be any better than paying them into your regular bank account?

flyer

sorry, I should have said, to avoid paying income tax

Chrismaths

You still have to pay tax on it. Dividends have to come from profits that have been subject to corporation tax, salary has to have income tax & nics deducted through PAYE. Anything else is tax evasion.

grumbler

Chrismaths wrote:

....Dividends have to come from profits that have been subject to corporation tax, salary has to have income tax & nics deducted through PAYE.

And AFAIK dividend income is a subject to an income tax too at 10%/10%/32.5% rates. Even if you receive such income from overseas sources to a foreign bank account, you still must pay tax in UK if you are UK resident.

Chrismaths

But UK dividend income is paid with a 10% tax credit (representing the corporation tax already paid), which covers the BR liability. If he's HR, he'll have to pay an additional 22.5% of the gross dividend (ie dividend +10% tax credit).

flyer

thanks guys, just a thought. How do all those multi millionaires get away with paying little or no tax legally?

ReportInvestor

flyer wrote:

sorry, I should have said, to avoid paying income tax

Yea right.

Have you ever met Gordon?

Or the ordinary, run of the mill, tax-paying members of MSE?

Chrismaths

Loads of very expensive ways. For instance, Phillip Green lives in Monaco. If you have a spare £20,000,000, you could always buy a property out there an only return to the UK for less than 90 days per year...

Cook_County

Flyer - It still may save tax in certain circumstances to pay offshore; for example if you are not domiciled within the UK. Where are you domiciled? Where does the company do business? In which country will the property be purchased?