What is the Personal Allowance for non residents?

londoninvestor

hamptons wrote: »

LondonInvestor thank you for taking the time. Very helpful.

"but for you, it sounds like basically it's savings interest and dividends"

Also directors' dividends from shareholding of a private UK Limited company, so is that taxed in the UK if the PA is claimed?

That seems to be a bit more complicated still. There are some rules around the treatment of dividends for close companies to temporary non-residents (TNR). If the rules deem your non-residence to be temporary, then the dividends might be UK taxable even if you don't claim the PA. Discussion of an example scenario here, and also here.

hamptons wrote: »

Dividends from UK companies is listed as a "disregarded income" but disregarded from what isn't clear. UK company dividends is my biggest income so that is the main criteria for making my choice on using the PA or not.

So basically for non-residents, you can put income in three categories:

1. UK-sourced income that is always taxable (e.g. rental income, income from UK employment)
2. UK-sourced income that is taxable if you claim the personal allowance; but not taxable (other than any deductions at source) if you don't claim the personal allowance. This is what's meant by "disregarded income".
3. Foreign-sourced income: not subject to UK tax

I don't have personal experience of this, but in your shoes, particularly with the complications around close company dividends, I'd probably look for an accountant's help on this.

hamptons

The 3 categories makes it much clearer now. Thank you.

JasonPr

1. UK-sourced income that is taxable if you claim the personal allowance; but not taxable (other than any deductions at source) if you don't claim the personal allowance. This is what's meant by "disregarded income".

I might be wrong but I think in this case you'll also get a tax credit in the amount as if you had paid basic tax on those dividends.

londoninvestor

JasonPr wrote: »

I might be wrong but I think in this case you'll also get a tax credit in the amount as if you had paid basic tax on those dividends.

That was the case in the past, but not since the dividend tax changes from the July 2015 budget took effect.