Question for the accountants
 

Is it possible/feasible for a dual-national, resident and domiciled in Canada, to be a director and shareholder of a limited company in the UK?

Any advice/links much appreciated.

Re: Question for the accountants
 

Yes but you need a UK address for the registered office.

Re: Question for the accountants
 

Oh, the company already exists.

Re: Question for the accountants
 

I guessed as much but it still needs a registered office in the UK.

Re: Question for the accountants
 

It has one. It's been around since the ark. That aside, are you aware of any problems that might occur in this situation, for example with regard to tax?

I'm basically hoping here that someone is in the situation I have described and can give me chapter and verse on how things work. Not that I'm lazy or anything.

Re: Question for the accountants
 

Hi

Hubby an accountant and have just asked him your question.

He thinks that as long as the company's registered office is in the uk there is nothing in the uk Companies Act to say that you can't be a director even though you are resident in Canada.

Even if you take Canadian citizen he is pretty sure that you can still be director.

Has has said try this link as there are leaflets on there that you may want to check out.


www.companieshouse.gov.uk


Hope this helps you

Gaynor

Re: Question for the accountants
 

Thanks. I will check out that link.

Re: Question for the accountants
 

Yes - you can be a shareholder in a UK company.

Any dividends paid will be taxable in Canada. I don't think theres any witholding tax on dividends from the UK, so you'll just have to delcare the full amount in your Canadian Tax return.

Any capital gain on the shares (when you sell them) will be taxable in Canada only.

As for being a director - I don't see why not. There's others on here that work for UK companies whilst living in canada.

Re: Question for the accountants
 

Foreign tax credits on your dividend income! Not a problem in itself but it means your tax return will cost more to prepare.

To be clear here: you can be a director/shareholder in a UK company and the only difficulty is having a UK registered office. The reg office cannot be in Canada.

Re: Question for the accountants
 

Thanks for that. It sounds as if my tax situation would not change dramatically. As things stand, I'm already an offshore employee of the company and file my taxes in Canada.

Would the CGT be calculated on the nominal value of the shares or on the value of the company (my stake would not be a trivial one in % terms)?

Re: Question for the accountants
 

Thanks again.

The reg office bit is not an issue. The company has been trading, in the UK, since before WWII. My accountant is already used to my foreign tax credits, so again no problem.

Re: Question for the accountants
 

The gain is calculated on proceeds from disposal less cost of shares. The cost is the price you paid plus any purchasing fees. It has nothing to do with nominal value of the shares or the value of company (although value of company should really = sales price).

There are rules exempting gains for sale of shares in small businesses - but only if the comapny is Canadian. You also won't benefit from any UK tax relief available, as you're being taxed in Canada.

Re: Question for the accountants
 

According to my accountant CGT is based upon the value of the shares when you become resident in Canada. So get statements from your UK accountant as to the value of the shares before you leave.

Re: Question for the accountants
 

Erm. I've been a resident of Canada for over 6 years and I don't as yet have any shares. I'm essentially trying to work out the practicalities of being in Canada and being a director of a UK company (I've had a sort of offer from the people I work for in London).

Re: Question for the accountants
 

Then it will be your purchase price plus commission.

Re: Question for the accountants
 

Rule of thumb: Resident in Canada = taxable on worldwide income - the reason Howard Hughes left Canada.

According to the CCRA:

Quote: "If you receive interest or dividend income from another country, you have to report this income in Canadian dollars. Use the exchange rate that was in effect on the day you received the income. If you received the income at different times during the year, use the average annual exchange rate. The average monthly rate as well as the daily rate are available by accessing the Bank of Canada web site.

If you paid foreign taxes on your interest or dividend income, you may be able to claim a foreign tax credit when you calculate your federal and provincial or territorial taxes (see lines 431 and 433). Do not subtract the taxes from your income when you report it." End quote.

Link: http://www.cra-arc.gc.ca/tax/individ...foreign-e.html

The only down side to getting dividends from business, is the darned tax man assumes you'll get the same the following, and subsequent years and expects you to pay tax instalments based on that, even though it may never happen again!

We got an assessment from CCRA demanding an instalment of $15,000 (by the end of the month) based on some unusually large dividends from last year!! Sure we'd get it back eventually, but they seem to expect you to have that sort of cash lying around to just give to them! (not to mention at very short notice!) :eek: Then of course, they want the same every quarter for the remainder of the tax year :eek: :eek:

Re: Question for the accountants
 

Thanks again for more helpful stuff. We can get off the tax stuff, though. I'm already doing that (and dream of only paying $15k per quarter in installments). You can request an adjustment of your installments, by the way.

My main interest is in the day to day practicalities/pains of being here and being a director there.

Re: Question for the accountants
 

Wouldn't want to be in your shoes, then ('ang on, maybe I would...lol ;))
That $15k is ONLY for dividend income though, and on top of all the regular stuff. It came as a bit if a shock, that's all. We have received dividends pretty much annually (not foreign, I hasten to add), but never had a demand for additional installments. :confused: