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  1. #1
    Member สมาชิก Essex boys's Avatar
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    Default Uk pension taxed abroad?

    Hi gents, during a quiet spell in work last night my workmates was looking at tax payable on the state pension, it said that if you were not a uk resident then you would not be taxed,but you could be taxed by the country that you were resident in. We got busy again so didn't have time to read much further, do any of you guys living in Thailand get taxed on your state pension by either the uk or Thai government? If you are taxed by the Thai government how much is that tax rate....
    i can't imagine the Thai government giving up an opportunity to tax a foreigner, but I have never heard anyone say they are or are not taxed by the Thai government.
    many thanks in advance for your replys.
    essexboys

  2. #2

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    Your state pension is not taxed in the UK income is after 1000k interest on savings, personal allowance is over 11k now. Not taxed in Thailand.

  3. #3
    Member สมาชิก Essex boys's Avatar
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    Thanks for the info banporman, im surprised that the Thai government doesn't tax you, but good news anyhow. I think my personal allowance is £11,850 before I pay tax , wanted to do a draw down pension from my work pension scheme but I'm keen to keep it below the tax threshold if possible.
    essexboys

  4. #4

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    it;s going to be 12k allowance by 2020, not so long ago it was a mere 6, so they have done well there.

  5. #5
    Forum Regular สมาชิกประจำ Sammy Shrimper's Avatar
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    Don't forget the tax man will add your state pension on to your company/private pension which would most probably take you into the tax bracket
    Get busy living or get busy dying

  6. #6

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    Tax is taken off the other pensions ie local authority

  7. #7
    Premium Member sisaket's Avatar
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    Essex boys.
    Have you looked into Tax Free Lump Sum up to 25% of your pension if its your personal pension and are over 55 Yrs. You can keep the rest of the monies in the pension which will be crystalised IE wont be able to have tax free lump sums but can have regular or ad-hock payments which will be subject to tax at your rate.
    Basically you can still be working paying tax but have a tax free lump sum, if you contribute to your pension make sure to check how much you can still put in, sometimes have restrictions IE £4,000-00 per tax year depending on circumstances, worth checking out, your pension administrator should be able to point you in the correct direction.
    This is some Work or Private pensions, not state pension.

    - - - - - - - u p d a t e d - - - - - - -

    Quote Originally Posted by banporman View Post
    it;s going to be 12k allowance by 2020, not so long ago it was a mere 6, so they have done well there.
    Dont forget you can now have 10% of your spouse / civil partners Marriage allowance added you your Tax Code IE £1,190 this takes £11,850 to £13,040 before tax, Mrs signed hers over a few tax years ago.
    bangkok mags

  8. #8
    Member สมาชิก Strawman's Avatar
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    Sisaket thats answer is not right

    "Have you looked into Tax Free Lump Sum up to 25% of your pension if its your personal pension and are over 55 Yrs. You can keep the rest of the monies in the pension which will be crystalised IE wont be able to have tax free lump sums but can have regular or ad-hock payments which will be subject to tax at your rate."

    It may be the way you've worded it accidentally

  9. #9
    Premium Member sisaket's Avatar
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    Quote Originally Posted by Strawman View Post
    Sisaket thats answer is not right

    "Have you looked into Tax Free Lump Sum up to 25% of your pension if its your personal pension and are over 55 Yrs. You can keep the rest of the monies in the pension which will be crystalised IE wont be able to have tax free lump sums but can have regular or ad-hock payments which will be subject to tax at your rate."

    It may be the way you've worded it accidentally
    What part is not correct ? , plus He would need to look it to it a it will be down to his individual circumstances...
    bangkok mags

  10. #10
    Member สมาชิก Strawman's Avatar
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    Quote Originally Posted by sisaket View Post
    What part is not correct ? , plus He would need to look it to it a it will be down to his individual circumstances...
    We had this scenario in our family with my brother who is older and reached 55 and had private pension pot.
    It could be the way you're explaining it.
    Assume at age 55 the client has a pot of £100,000 to make the numbers crunch easy

    Now my brother wanted to do the scenario I think you were implying. Take 25% tax free but leave the £75,000 invested. It doesnt work like that.

    In your scenario he could take £25,000 (or whatever amount) but that in itself would be 25% tax free and the balance normally taxed at higher rate dependant on time of tax year of which HMRC take about 6 months to decide if higher rate was applicable and refund whatever. Exactly the scenario with my brother

    Now the only way to get £25,000 (tax free on our 100,000 pot) is to liquidate the entire pension pot

    The client receives in this case £25,000 tax free and the balance of £75,000 is taxed at prevailing rates

    My brother thought exactly as you did in your post. Hey the pot is 100k I'll take 25k tax free and leave the 75k invested. Doesnt work like that I can assure you unless the rules have changed since 2016
    Am hoping others can follow that but I assure you its accurate. I too had thought of doing similar in the future but now know the tax implications
    edited to add....am talking about private personal pensions not company ones
    Last edited by Strawman; 9th Oct 2018 at 05:36.

  11. #11
    Premium Member Tom & Nok's Avatar
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    It is possible to take 25% of a private pension pot as a tax-free lump sum and to leave the remaining 75% invested, just as sisaket says. How do I know? I have done this with my SIPP which is now in drawdown. I took the 25% tax-free lump sum. The rest is invested and any further withdrawals are subject to income tax during that tax year.

    There are three other options for withdrawal. All four permutations are explained here. There's also a guide to download here from A J Bell. I have no connection with A J Bell, my SIPP is with another provider but the principles are the same irrespective of the SIPP provider.
    Last edited by Tom & Nok; 9th Oct 2018 at 06:53. Reason: add web link
    "I can calculate the movement of the stars, but not the madness of men" Sir Isaac Newton

  12. #12
    Premium Member Gary & Nok's Avatar
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    Not sure if this is the same but I too took a 25% lump sum in 2016 and left the rest "invested" with the company pension pot.
    From that pot I get paid a monthly pension, subject to tax (but in my case that is not relevant).
    I'm ONE of the 52%

  13. #13
    Veteran ผู้มีประสบการณ์
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    The 25% is the goverment limit. Some pension providers may offer slightly less depending on the health of their fund.
    Lucky

  14. #14
    Premium Member Tom & Nok's Avatar
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    The right of most of people to take 25% of a private pension as a tax-free lump sum is indeed set by HMRC. The "health" (value) of the private pension pot does not come into it. Indeed if the private pension pot is worth up to £30,000 then that whole pot could be taken out as one lump sum (a "trivial commutation") with 25% tax-free.

    However, the rules do differ for pension pots which exceed the life-time allowance which is currently £1,030,000. If the size of the pension pot exceeds the life-time allowance then you can only access a maximum tax-free amount equivalent to 25% of the life-time allowance unless you had previously successfully applied to HMRC to preserve a higher previous life-time allowance.
    "I can calculate the movement of the stars, but not the madness of men" Sir Isaac Newton

  15. #15
    Forum Dinosaur ไดโนเสาร์ Flip's Avatar
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    I've just taken 25% of my pension pot tax free. I can't comment on other companies but to enable that to take place, Scottish Widows in effect, close your pension, pay you the 25% and invest the rest in an investment scheme. You are offered a choice of where you want to invest the 75% according to your wishes and circumstances. I can draw down the rest of my pot whenever I like but it will be taxed at source. If my other income + the amount of the remainder drawn down doesn't take me over the tax threshold in that tax year, I will be able to reclaim the tax paid at the end of the tax year.

    If you do draw down all or part of the remainder and can wait, it would seem sensible to make that draw down just before the end of the tax year so you don't have to wait too long for a refund.

  16. #16
    Forum Regular สมาชิกประจำ
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    OK so I can withdraw 25% of my pension fund for eg. this year if I take any out the following year it will be subject to tax at your relative tax bracket. My pension (military one) is not enough to attract tax say it is 10,000/year. would I still pay tax on all the pension I take or would the first 1000 or so be added to my allowance? Hope this is making sense.

  17. #17
    Forum Regular สมาชิกประจำ Sammy Shrimper's Avatar
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    Back to the OP. You are libel to the UK tax laws in Thailand on a state pension. Of course this depends on if you are receiving any other form of income. State pension alone I don't think is enough to take you into the tax bracket.
    Get busy living or get busy dying

  18. #18
    Forum Dinosaur ไดโนเสาร์ Flip's Avatar
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    Quote Originally Posted by DAS View Post
    OK so I can withdraw 25% of my pension fund for eg. this year if I take any out the following year it will be subject to tax at your relative tax bracket. My pension (military one) is not enough to attract tax say it is 10,000/year. would I still pay tax on all the pension I take or would the first 1000 or so be added to my allowance? Hope this is making sense.
    My understanding is that you would pay tax initially because the pension company is obliged to deduct the tax before sending you the remainder. Any overpayment would be refunded after the end of that tax year. So, 2 examples (assuming the tax threshold is £11,600). If your military pension in a particular tax year is £10,000 and you drawdown £1500 from your other pension (having previously taken the 25% tax free) it will be taxed at source but as your total income for the year is not over the tax threshold, the tax will be refunded after the end of that tax year provided that such a refund would not take you over the threshold. In other words, in the end it will be exactly the same as if you'd earned it. Sorry, too lazy to do the calculation on that but I hope you get my gist.

    Let's say you have no income at all - no military pension and after taking the initial tax free 25%, in the next tax year you draw down £10,000 from your pot, you will initially be taxed on it but would receive all the tax back after the tax year ends because your income was below the tax threshold. The pension company is only allowed to give you 25% of your pot tax free. After that they have to deduct tax at source and HMRC sort the tax out after all your income is declared at the end of the tax year. One note, if you do not complete a tax return that year, I'm pretty sure you'll have to request the refund. I don't think HMRC are in the habit of giving them out automatically.

  19. #19
    Premium Member Tom & Nok's Avatar
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    My experience was that HMRC adjusts your tax code very shortly after you start taking pension income. Under the HMRC Real Time Information (RTI) system introduced in April 2014, employers and pension providers must send information about wages and pensions to HMRC every time they make a salary or pension payment to an individual. This helps both HMRC and you to check that the correct amount of income tax, if any, is being deducted through your tax code.

    It's very worthwhile setting up an online personal income tax account with HMRC as this makes it really easy to see what pension income HMRC thinks that you will receive over the tax year and how much tax liability you will have. You can use your HMRC online account to correct errors and HMRC will adjust your tax code within days so that you'll be on course to pay the correct amount of tax.

    I can vouch that it works. I have two pensions. Pension 1 is paid monthly while Pension 2 is paid out as a single lump sum at the start of the tax year. At the end of April, my HMRC account shows that they've tracked both pension payments and they have used them to estimate my annual income. HMRC incorrectly assume that I'll be receiving further monthly payments from Pension 2 over the rest of the tax year and so they generate a very scary tax code based upon an estimated income of several hundred thousand pounds (if only!). So, I enter in my true annual pension income figure and they promptly correct their assumptions and send my pension providers and me an updated correct tax code. This avoids having too much income tax deducted and there's no need for me to wait until the end of the tax year to claim a refund for income tax overpayments.

    As I say, it's well worth setting up an online account with HMRC if you don't already have one as it makes managing the income tax deducted from one or more pensions simpler.
    "I can calculate the movement of the stars, but not the madness of men" Sir Isaac Newton

  20. #20
    Premium Member sisaket's Avatar
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    "As I say, it's well worth setting up an online account with HMRC if you don't already have one as it makes managing the income tax deducted from one or more pensions simpler".

    Worth noting you can also check your NI contributions towards your State Pension, ATM you need 35 yrs of contributions (it used to be 31 yrs) to get the Full SP. If you dont have full yrs to make up 35 IE you have 33, you may buy / top up / contribute to make up the short fall if you needed to, but most people have time to acquire the yrs needed....After acquiring 35 yrs or more you can still be invited to top up / buy more years to no benefit what so ever to your pension (just let that sink in) available from HMRC / UK.GOV con-artists.COM But it is worth opening an account to keep check on your Tax position and make sure the correct Code is being applied etc and of course to check if the UK.GOV con - men (and women) are changing the goalposts IE I will need to be 67yrs to get the State Pension (ATM) when or if the time arrives.
    bangkok mags

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