Income Tax

[mareht123 11]

I believe that on retirement I have the option of paying tax either in the Uk or in Thailand when I move there. If this is so, I'm guessing that it must be preferable to pay it in LOS, as i can't imagine anyone being as bloodthirsty as the British Taxman. Or would I be wrong?

[jacko 8,822]

I believe that on retirement I have the option of paying tax either in the Uk or in Thailand when I move there. If this is so, I'm guessing that it must be preferable to pay it in LOS, as i can't imagine anyone being as bloodthirsty as the British Taxman. Or would I be wrong?

Be careful......

Thailand does have a dual tax agreement with the UK, but pensions, for example, are taxed at source, the UK, unless you move them offshore.

 

The agreement dictates that the UK tax payment offsets any Thai liability, but it is not well understood here. I have a friend who felt paying it in LOS would be of benefit, but ended up paying in both countries, and will have to try and get out of it next year.

 

Information here.

Edited May 23, 2012 by jacko

[Bazle 1,500]

I believe that on retirement I have the option of paying tax either in the Uk or in Thailand when I move there. If this is so, I'm guessing that it must be preferable to pay it in LOS, as i can't imagine anyone being as bloodthirsty as the British Taxman. Or would I be wrong?

 

Maybe you can arrange your life and your finances in a way such that you pay tax on your income and gains in one place or the other, or possibly neither. However, you don't have the option in the sense you can just choose.

 

As Jacko has pointed out, there is a double taxation convention between the UK and Thailand and that sets the ground rules regarding which country has the prime taxing rights - and that varies depending on the type of income or gain.

 

Regarding a pension from the UK which you are already drawing, the UK has the prime taxing rights - see http://www.pattayatalk.com/forums/topic/10235-pension-uk-tax/#entry122120

However, if you have not started drawing the pension and expect to live full-time in Thailand for a long time, you can research the benefits or otherwise of QROPS

[mareht123 11]

Thanks gents. Just the sort of advice/info i was looking for, though I haven't had time to read/digest it yet as working. Will have state and work pensions combined and either money in the bank from the sale of my house, or rental income if I go down that route. If I opted to pay tax in LOS, would I still get inflation rises on my pension if I was resident in LOS. Could I keep 'em if I spent a certain amount of time in the Uk each year Rod Stewart like? So much to ponder!

[jacko 8,822]

Thanks gents. Just the sort of advice/info i was looking for, though I haven't had time to read/digest it yet as working. Will have state and work pensions combined and either money in the bank from the sale of my house, or rental income if I go down that route. If I opted to pay tax in LOS, would I still get inflation rises on my pension if I was resident in LOS. Could I keep 'em if I spent a certain amount of time in the Uk each year Rod Stewart like? So much to ponder!

Well there are a lot of retired people in Pattaya, and I bet many have nothing to do with the Thai tax authorities. If you rent out in the UK there will be a liability there, as there will be for the pensions, but let us say you need not pay any in Thailand........ There is sales tax on many things here and tax on bank account interest (possibly reclaimable) but that should be it, unless you go into business or form a limited company in order to own property.

 

Plenty of people can help you on this here, plus when you arrive, there are Expat Club organisations that can help you get sorted. Also a lot of barstool experts. Normal advice is to come here, rent a place for a while, keep it simple and give it a try before committing financially.

[Bazle 1,500]

Thanks gents. Just the sort of advice/info i was looking for, though I haven't had time to read/digest it yet as working. Will have state and work pensions combined and either money in the bank from the sale of my house, or rental income if I go down that route. If I opted to pay tax in LOS, would I still get inflation rises on my pension if I was resident in LOS. Could I keep 'em if I spent a certain amount of time in the Uk each year Rod Stewart like? So much to ponder!

 

1. Re your words I have highlighted, please see my comments above.

 

2. Re the State pension from the UK, if you choose to live in LOS, you will not get inflationary increases.

http://www.direct.gov.uk/en/Pensionsandretirementplanning/StatePension/DG_10026714

 

3. If you live partly in the UK and partly in LOS, I suspect you would still get inlationary increases provided the pension is paid to you in the UK.

 

4. If you have rental income in the UK, it will be subject to UK tax even if you are resident in LOS.

http://www.hmrc.gov.uk/manuals/dtmanual/DT18706.htm

 

5. If you have interest income in the UK, it will be taxable in the UK unless you are considered to be "not ordinarily resident" in the UK for UK tax purposes; you can then go along to your bank and arrange to have the interest paid gross.

http://www.hmrc.gov.uk/cnr/faqs_general.htm#7nr

 

 

If you are considered to be non-UK resident for UK tax, there is a lot of useful information here - http://www.hmrc.gov.uk/cnr/faqs_general.htm

However, achieving that status is not straightforward. At the moment, the guidelines are based on (often contradictory) case law but from 6 April next year, there will statutory rules.

 

Please also remember about Thai tax. The Thais generally tax income arising outside of Thailand on a "remittance" basis - they do not tax it unless the money is taken into Thailand. Establishing whether it is or isn't could be problematic if the money is added to other funds in a bank account from which you are remitting funds to Thailand. It is easy to get around the potential problems but you should take proper advice. As Jacko says, there are a lot of barstool experts out there - so be careful.

[mareht123 11]

Well there are a lot of retired people in Pattaya, and I bet many have nothing to do with the Thai tax authorities. If you rent out in the UK there will be a liability there, as there will be for the pensions, but let us say you need not pay any in Thailand........So may as well let the status quo remain and pay my dues in blighty na? If, by doing so, I could retain the inflationary pension rises payable were I to stay in the yuk, I would surely do so. There is sales tax on many things here aware of the 7% Gov Tax and tax on bank account interest (possibly reclaimable) Never had any interest paid on a Thai account but that should be it, unless you go into business or form a limited company in order to own property.Condo in my own name after rental and definately pre marriage (if ever) i think

 

Plenty of people can help you on this here, plus when you arrive, there are Expat Club organisations that can help you get sorted. Also a lot of barstool experts. Normal advice is to come here, rent a place for a while, keep it simple and give it a try before committing financially. Sounds like good advice to me. Thank you

[mareht123 11]

1. Re your words I have highlighted, please see my comments above.

 

2. Re the State pension from the UK, if you choose to live in LOS, you will not get inflationary increases.

http://www.direct.gov.uk/en/Pensionsandretirementplanning/StatePension/DG_10026714 Shit! For some reason your links don't open when i click/double click on them.

 

3. If you live partly in the UK and partly in LOS, I suspect you would still get inlationary increases provided the pension is paid to you in the UK. Ta. Any idea how much time i would have to spend in blighty to retain the rises?

 

4. If you have rental income in the UK, it will be subject to UK tax even if you are resident in LOS.

http://www.hmrc.gov....ual/DT18706.htm Another reason for dealing with it all via HM's boys.

 

5. If you have interest income in the UK, it will be taxable in the UK unless you are considered to be "not ordinarily resident" in the UK for UK tax purposes; you can then go along to your bank and arrange to have the interest paid gross.

http://www.hmrc.gov....general.htm#7nr ISA sounds good here

 

 

If you are considered to be non-UK resident for UK tax, there is a lot of useful information here - http://www.hmrc.gov....aqs_general.htm

However, achieving that status is not straightforward. At the moment, the guidelines are based on (often contradictory) case law but from 6 April next year, there will statutory rules. Looks like brittax is winning the day here

 

Please also remember about Thai tax. The Thais generally tax income arising outside of Thailand on a "remittance" basis - they do not tax it unless the money is taken into Thailand. Does that apply to buying a condo? The money has to come from outside Thailand, right? So if the condo costs X and i transfer X over, paying the transaction fee to my UK bank, is that it or can i expect a bill from the thaitax boys? Establishing whether it is or isn't could be problematic if the money is added to other funds in a bank account from which you are remitting funds to Thailand. It is easy to get around the potential problems but you should take proper advice. As Jacko says, there are a lot of barstool experts out there - so be careful. Fair play. Thank you

[Bazle 1,500]

1. Re your words I have highlighted, please see my comments above.

 

2. Re the State pension from the UK, if you choose to live in LOS, you will not get inflationary increases.

http://www.direct.go...ion/DG_10026714 Shit! For some reason your links don't open when i click/double click on them.

Don't know why not. But right click on the link, choose "Copy link location", open a new browser window and copy the address into it.

 

3. If you live partly in the UK and partly in LOS, I suspect you would still get inlationary increases provided the pension is paid to you in the UK. Ta. Any idea how much time i would have to spend in blighty to retain the rises?

No, I don't. But the impression I get is that what is important is where you get them to pay the pension to - i.e. into a UK account or a foreign account.

 

4. If you have rental income in the UK, it will be subject to UK tax even if you are resident in LOS.

http://www.hmrc.gov....ual/DT18706.htm Another reason for dealing with it all via HM's boys.

Just to remind you that the choice is not really yours unless you organise your life to achieve the result you want.

 

5. If you have interest income in the UK, it will be taxable in the UK unless you are considered to be "not ordinarily resident" in the UK for UK tax purposes; you can then go along to your bank and arrange to have the interest paid gross.

http://www.hmrc.gov....general.htm#7nr ISA sounds good here

If you are UK tax resident, yes you should be using ISAs.

 

If you are considered to be non-UK resident for UK tax, there is a lot of useful information here - http://www.hmrc.gov....aqs_general.htm

However, achieving that status is not straightforward. At the moment, the guidelines are based on (often contradictory) case law but from 6 April next year, there will statutory rules. Looks like brittax is winning the day here

Not sure how you come to that conclusion.

 

Please also remember about Thai tax. The Thais generally tax income arising outside of Thailand on a "remittance" basis - they do not tax it unless the money is taken into Thailand. Does that apply to buying a condo? The money has to come from outside Thailand, right? So if the condo costs X and i transfer X over, paying the transaction fee to my UK bank, is that it or can i expect a bill from the thaitax boys?

That is a possibility, but a lot more about your personal circumstances would need to be known to come up with a proper answer.

 

Establishing whether it is or isn't could be problematic if the money is added to other funds in a bank account from which you are remitting funds to Thailand. It is easy to get around the potential problems but you should take proper advice. As Jacko says, there are a lot of barstool experts out there - so be careful. Fair play. Thank you

I realise that most people have a reluctance to paying expensive professionals for advice but it might turn out to be money well spent. provided you find someone competent.

[mareht123 11]

Ok. So pay the dues in yuk and play a little loose in los seems to be the touch. I'll settle for that. Thank you

[mareht123 11]

Be careful......

Thailand does have a dual tax agreement with the UK, but pensions, for example, are taxed at source, the UK, unless you move them offshore.

 

The agreement dictates that the UK tax payment offsets any Thai liability, but it is not well understood here. I have a friend who felt paying it in LOS would be of benefit, but ended up paying in both countries, and will have to try and get out of it next year.

 

Information here.

 

Jacko. I spoke to my company pension office yesterday and they tell me that I can elect to have the tax deducted in either country. In addition they can pay my monthly payment into my Thai bank account for the princely sum of £1.50 (so why does my bank charge me £20 for the same service?), and I DO get an inflationary rise each year. All good so far.

 

If I retire early, they will advance me my state pension in full, until it kicks in on my 65th Birthday. However, the state are not so generous and unless I spend 6 months or more in the yuk I will get no annual increase on the part of my pension provided by them. Will still get an inflationary rise on the company portion, which will be greater so not all bad.

 

Hope this of help to anyone looking down that avenue currently.

[Bazle 1,500]

I spoke to my company pension office yesterday and they tell me that I can elect to have the tax deducted in either country.

 

That is simply not correct. It is not your choice; there is no "election" that you can make. Ask the company pension office to quote under what part of the tax legislation there is a provision to make such an election.

 

 

Edit:

Let me elaborate on the above. The pension payer has a legal obligation to deduct PAYE unless instructed otherwise by HMRC.

 

You will have a UK tax liability on the UK pension for reasons I have explained previously – note that the UK/Thailand double tax treaty will not exempt you even if you cease to be UK tax resident and become Thai tax resident.

 

The PAYE withheld will likely be enough (possibly more than enough) to meet your UK tax liability.

 

You might want to take a read of these pages from the HMRC website:

 

http://www.hmrc.gov.uk/incometax/tax-leave-uk.htm#3

http://www.hmrc.gov.uk/cnr/app_dtt.htm#4

Edited June 7, 2012 by Bazle

[mareht123 11]

That is simply not correct. It is not your choice; there is no "election" that you can make. Ask the company pension office to quote under what part of the tax legislation there is a provision to make such an election.

 

 

Edit:

Let me elaborate on the above. The pension payer has a legal obligation to deduct PAYE unless instructed otherwise by HMRC.

 

You will have a UK tax liability on the UK pension for reasons I have explained previously – note that the UK/Thailand double tax treaty will not exempt you even if you cease to be UK tax resident and become Thai tax resident.

 

The PAYE withheld will likely be enough (possibly more than enough) to meet your UK tax liability.

 

You might want to take a read of these pages from the HMRC website:

 

http://www.hmrc.gov....-leave-uk.htm#3

http://www.hmrc.gov....r/app_dtt.htm#4

 

Don't shoot the messenger! I didn't even ask for this information, he offered it. Nice guy really. He called me at home to answer my emailed question about the annual inflationary rise. He said there were 2 things i should do. !) Contact the taxman because I may want to pay tax outside the Uk, and I'm buggered if I can remember the other as he caught me slightly on the hop.

 

One thing that does keep crossing my mind though, is if I decided to have the wedge paid into my Thai account (tax deducted or not), how would the pension company know when I'm dead and to stop paying? No effect on me of course, but Intreaguing....

[Bazle 1,500]

One thing that does keep crossing my mind though, is if I decided to have the wedge paid into my Thai account (tax deducted or not), how would the pension company know when I'm dead and to stop paying? No effect on me of course, but Intreaguing....

The Executor(s) of your estate is/are responsible for notifying the pension payer.