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Forum Regular |
I have a few questions regarding the State Pension for people who have moved to LOS. I know that basically it is frozen but there are a lot of details I'm not clear on, so I'm trying to get a full list in one place:
1. Is the pension frozen at 65 regardless or can you defer it a while and get an enhaced rate based on the date you start collecting it? 2. If you decide you can't survive in Thailand as the value of the pension deteriorates, can you return to the UK and get the pension upgraded or do they just make the minimum guaranteed income up? 3. Are you taxed in the UK and Thailand? Is it true that if you save the money for 12 months in a UK account there is no longer any tax to pay in Thailand? BigRed |
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Forum Regular |
u can defer the payments for up to five years for an enhanced pension.
some tax paid in the uk will be offsetable against what u have to pay in thailand, according to the terms of the uk-thailand double taxation treaty. u cannot avoid liability for thai income tax by saving up the money in a uk bank account for 12 months, since ur pension is treated as earned income for the period in which it is paid by the government to ur account. ian.  |
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Member |
Ian
Can you please expand. I emigrate this month. Have a company pension and rental income. I expected to be taxed in the UK on both and no tax in thailand..is that not the case..I will have an O-A visa there. What happens when I get my OAP? So if I have to pay tax in Thailand..how do I go about this please. The UK IR have said to me that I will be taxed in the UK on the above. |
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Forum Regular |
john
i’ll quote from form ir121 from hm revenue & customs. broadly, if you are resident in the uk, then you will pay uk tax on your income. if you are not resident, then you will pay uk tax only on income from the uk. in basic terms, you are not resident if you are living in another country for at least a full tax year, 6 april to 5 april, and your visits back to the uk will total less than 183 days in any tax year. there is a tax helpline that is open from 0730 to 1700. the number is 0845 0700 040. if u are resident for thai personal income tax purposes, then all of ur income will be liable to thai income tax, but u may apply for ur liability on each particular £ of income to be reduced by any uk income tax paid on that £. u do not receive a refund if the uk tax rate exceeds the thai tax rate. i have heard of rental payments being timed to avoid thai tax, but i don’t know how this works. if u are non-resident for thai personal income tax purposes, for example if u spend less than 180 days in thailand during a calendar year (which u could very easily arrange), then u pay thai income tax only on income from sources within thailand. ian. |
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Forum Regular |
Thanks Ian that makes it a lot clearer, but still
 If you don't mind can I give you a hypothetical example. Mr Bloggs retires to LOS at age 60 in Apr 07 from his PAYE job (higher rate tax payer) and assumes he has completed self-assessement. Do you think after he has informed IR (if he has to?) of his retirement plans he would have any further UK tax liablity for 06/07? Also, assume in 07/08 and in subsequent years he receives an income from an UK private pension (tax deducted at source I presume) then at 65 the state pension kicks in and some rental income. Do you think he will just pay UK income tax on his rental income alone?, Uk and Thai tax?, or can he elect to pay just Thai income tax (if lower rate than the UK)? Hope I'm not asking for too much - apologies for me being taxably challeged !!? Thanks alvin |
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Forum Regular |
alvin
i’m assuming that mr bloggs moves to thailand in april 2007. the answer to ur first question is yes because he has not yet established his non-resident status. in later years, if he stays in thailand permanently, he will pay uk income tax on all of his uk-sourced income. he cannot elect to pay thai tax only. one important thing i neglected to mention previously, and it might be the source of bigred’s original query, is that liability of foreign income to thai personal income tax is based on remittances to thailand. on the face of it, if mr bloggs spends seven months of a calendar year, let’s say 2009, in the uk (so that he is non-resident in thailand for 2009), and rolls up all of his uk income (plus profits from selling uk properties, which would otherwise be taxable in thailand) in a uk bank account before sending it to thailand in 2009, it appears that no thai income tax at all is paid on this income. i'm a bit wary: it seems like we've talked ourselves into a solution that looks too good to be true... for the definitive rules, the revenue department website is given below. see if u can make something of them! www.rd.go.th ian. |
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Member |
I have just spoken to IR. I need to fillin form P85 to start the ball rolling. However they tell me I can either be taxed in the UK on my personal pension and tell the Thai rd and they will credit me with the tax paid or get my pension paid gross and pay Thai Tax.
However I must pay rental income tax in the UK. Do we believe this to be correct please? |
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Forum Regular |
I'm guessing that the best option is to take it gross and pay in Thailand then, as their tax is much less than ours in general. Anyone got a reference for tax rates and bands?
BigRed |
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Forum Regular |
john
u can choose for ur pension to be paid gross. this improves ur cashflow and saves going through the sometimes-frustrating process of having to claim credits. however, u are still liable for uk income tax on ur state and private pensions from the uk (except pensions for some work done while resident abroad). http://www.direct.gov.uk/MoneyTaxAndBenefits/Taxes/Leav...ingOrComingIntoTheUK Articles/fs/en?CONTENT_ID=10026234&chk=tfBi9M uk rental income is supposed to be paid to u net of 22% tax, with the tenant giving to u an r185 form (certificate of tax deduction) plus the other 78% of the money. ian. *** bigred i can’t access the http://www.rd.go.th/publish/6045.0.html webpage now but it gives all of the data u want. the thai income tax rates go from 10% to 37%. the personal allowances are low, otherwise the vast majority of thai people would pay nothing. even so, i fully expect that a large number of thais outside of bangkok have never heard of income tax. capital gains from sales of foreign property are taxed as income but, as discussed earlier, there might be ways round that! ian. |
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Please appreciate that the Double Taxation Agreement between the UK and Thailand is undergoing renegotiation and accordingly there is no guarantee that the correct statements made above will continue to apply forever. The renegotiations have already been going on for 2-3 years and who knows when they might conclude? John |
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Forum Addict |
From reading this... A hypothetical situation: Say you ran a business, with a WP in Thailand, working for UK-based companies, the money earn was paid into a UK bank account and remitted to Thailand...But you spent less than 180 days in Thailand...And less than 183 days in the UK... What would your tax situation be?  Nick |
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Forum Regular |
i know what u're thinking, but i can't open the http://www.rd.go.th/publish/6045.0.html webpage to check the answer. it works less well than even the thai airways website! ian. |
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Forum Addict |
Apologies...I seemed to have hijacked the OP's thread
 I've read through the link... Basically, what I'm thinking about doing in a year or 2... Is: Work abroad, for my clients in the UK...MINIMISING my tax liabilties here. Be in the UK for less than 183...But still physically doing some work here...Although I read somewhere that if you stay or work for any period of upto 90 days you have to pay tax??? Live and work in Thailand (with WP) for less than 180 days, therefore MINIMISING my tax liabilties there. Any ideas how I would do this? All money is currently paid into a UK Bank Account by bacs...I suppose it could be possible to change this into an account based in Thailand. Nick |
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