Considerations for HK/SG Residents investing in UK Real Estate

·         Dividends –
o   From April 2016 the Dividend Tax Credit will be replaced by a new tax-free Dividend Allowance.
o   The Dividend Allowance means that you won’t have to pay tax on the first £5,000 of your dividend income, no matter what non-dividend income you have.
o   You’ll pay tax on any dividends you receive over £5,000 at the following rates:
§  7.5% on dividend income within the basic rate band
§  32.5% on dividend income within the higher rate band
§  38.1% on dividend income within the additional rate band
§  Personal Allowance: £11,000
§  Basic Rate Limit: £32,000
§  Higher Rate Threshold: £43,000
§  Additional rate band: Over £150,000
o   Note wording of the treaty - 2. However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident and according to the laws of that State, but if the recipient is the beneficial owner of the dividends the tax so charged shall not exceed:
§  (a) 5 per cent of the gross amount of the dividends if the beneficial owner is a company which controls, directly or indirectly, at least 10 per cent of the voting power in the company paying the dividends;
§  (b) 15 per cent of the gross amount of the dividends in all other cases.


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