One of our clients is non-resident in receipt of UK dividends and is also a partner of a UK trading partnership which also receives UK dividends from its investments. Our client noted there is a limit on the amount of tax the individual pays in the UK by disregarding the dividend income.
There is a limit on the UK tax liability of an individual who is not a resident in the UK. However, it only applies if the individual is non-resident for the whole of the tax year and does not apply in split years.
For this you need to prepare two tax computations:
• The “normal” tax computation takes into account the individual’s taxable income less personal allowances (assuming personal allowances are available – not always the case).
• The tax computation in which certain income will be disregarded to calculate the tax liability without personal allowance.
The overall tax liability would be whichever result is the lower.
Disregarded income includes:
• income from annual payments such as royalties;
• dividends from UK-resident companies;
• purchased life annuity payments;
• profits from deeply discounted securities;
• income from unit trusts;
• some social security benefits (such as the state pension);
• retirement annuities
In addition, where a non-resident receives dividends from UK companies, they are treated as having paid tax at the dividend ordinary rate (i.e. 7.5%) on the amount of the dividend.
However, if a non-resident is running a business through a partnership with a UK permanent establishment, then the UK partnership would be a representative of each non-resident partner. Therefore, the relevant legislation applies, and that partnership income cannot be disregarded.
As a UK representative, the partners are jointly liable for the tax payable by the non-resident partners on their share of the partnership income. Therefore, partnerships with non-resident partners usually have arrangements in place to cover possible liabilities that the UK resident partners may be asked by HMRC to pay. 
 Reproduced from Croner Taxwise