JimGant

We seem to be on a semantics circle jerk.... Let me show this quote again: So, if you live more than 180 days per calendar year in Thailand -- and have a UK private pension that you remit to Thailand during this year -- then per the tie breaker rules in the UK-Thai DTA -- Thailand is your country of residency for the purpose of the DTA. Thus, you pay taxes on the private pension to Thailand. And per DTA, NO tax is payable to the UK. Double taxation is avoided. Unfortunately, the UK-Thai DTA is silent on private pensions. But OECD and UN Model tax treaty language holds that income not described in any DTA article is exclusively taxable in country of residency (as determined by the DTA).

This is about taxable income, which is assessable income after Thai deductions, allowances, free 150k are deducted. Nothing left, no taxable income. Certainly this is not about "total assessable income," which is meaningless, if there's no taxable income after the deductions. Assessable income, for Thai taxation purposes, will be all that income the DTA says is taxable by Thailand. This could be, for example, private pensions, which Thailand has primary taxation rights on -- or rental income from US property, which Thailand has secondary taxation rights on. Or it's not assessable income, like US govt pensions. IRS deductions and allowances play NO role in the Thai taxation equation -- only the deductions and allowances in their tax rules. It's only when certain deductions and allowances, like the US good-deal for long term cap gains, which Thailand doesn't copy, that you find the disparity will hurt the Yank taxpayer. For the simplistic tax return that I highlighted for my situation, the Yank will not be hurt by these new Thai tax rules.

Nope. Here's what my taxes would look like if Thailand went to the worldwide system -- actually, it wouldn't be any different than if they stuck with the remittance system. What I'm looking at here is what income would be taxable by both the US, and by Thailand -- per the DTA: My Air Force pension, and Social Security would be exempt from Thai taxes. But my Required Minimum Distribution (RMD) from my IRA would now be primarily taxable by Thailand -- and secondarily taxable (because of the treaty's saving clause) by the US. My Standard Deduction with the US would be, for single, age over 65, $16,200 (TY 2024). For Thailand, my so-called TEDA (Standard Deduction equivalent), comprising for a single over age 65, with a pension payment, and including the 150k freebie: 500,000 baht ($15,200, at latest FX rate - 32.8) Ok. Now my RMD is all into the US tax bracket of 22% ('cause the govt pension and SS get me there). So, my average RMD for the last few years -- of $20,000 -- would be well into taxable income territory -- and at 22%, would cost me $4,400 in US taxes. Now, this RMD of $20,000 is the equivalent of 656,000 baht (again, FX of 32.8). And to get into Thai taxable income territory, I need to exceed their equivalent of Standard Deduction, which as we outlined, was the 500,000 TEDA. And we do get into taxable income territory. Thus, my taxable Thai income is: 156,000 baht. Which amounts to 8,100 baht in taxes, or $247 -- which is $4,153 less than what I pay the US on this same RMD -- which, of course, can be subtracted from my US taxes, as a credit, leaving me with the same tax bill I would have, if I only paid US taxes, and not Thai taxes. Hmmmm. Maybe it's not time to relocate.... And what if my US taxable RMD, plus maybe some interest income from both the US and Thai banks -- equaled $40,000? Again, I'm still in the 22% US tax bracket (for a tax bill of $8,800); but have now crept into the Thai 20% tax bracket. However, most taxation occurs at lower bracket rates, so my effective Thai tax rate is 13%, or 107,400 baht, or $3,274. Again, much less than the US -- and completely available as a tax credit against US taxation. Hey, I'm not sure of how much of an average Yank I am -- I have about 30% of my securities in mutual funds, held by my standard IRA. So, all my cap gains are taxable as ordinary income, both in the US and in Thailand. But for Yanks heavily involved in individual stocks, and thus get a great tax advantage on US taxes for long term cap gains -- and qualified dividends -- well, then, they'll take a hit, as Thailand won't reciprocate those nice US tax breaks. So, yeah, maybe a few Yanks looking to vacate. But, I surmise my example is more the norm for Yanks -- and I won't be losing some American pals.

Not likely. Whether we're talking remitted cash flow, or worldwide cash flow -- Thailand won't have the needed data to identify whether or not that cash flow is non income (savings), or if income, whether it's assessable income per DTA, or not. Thus, it will all be self-assessment by the tax payer, and TRD will have to give the benefit of the doubt. The best they can do in enforcement is the occasional random compliance audit.

Thomas Jefferson tried that.

So, the UK-Thai tax treaty is worthless, i.e., you can't use the treaty's tie breaker language to determine which country has primary taxation rights, and the other secondary taxation rights? This would mean double taxation, which I doubt an expat Brit would stand for.... But, hey, King George tried SRT a few centuries ago, telling Americans they were honorary British residents, for tax purposes. We know how that ended.

Ok. But for tax treaty purposes, where, again, you have to determine which country is your tax treaty country of tax residence ('cause of the exclusionary or primary taxation rights language), you have to resort to the treaty's tie breaker language. From the link you provided:

....and just thank your lucky stars that great grandpa's hijacking into a slave ship allowed you to experience opportunities only offered by America -- not sub Sahara Africa. That you didn't avail yourself of those opportunities.... .? Well, ridiculous to think I should pay you for this oversight of opportunity.

Old, disabled folks using Digital Wallet? Hopefully they have IT literate grandkids to help.

Well, no -- not for treaty purposes. All treaty language gives the country of residence priority in taxation rights for many categories of income -- either exclusionary or primary. So, there can't be a "both" situation. The language for tie breaking residence situations in most DTAs is pretty straightforward: Where do you live most of the year; what country has your primary residence; etc. Can't reach an agreement? Well, then you go to the "competent treaty authorities" for a decision (who the he-- are they -- and how would you ever engage with them......). Oh well.

If memory serves, the remitting taxation aspect for UK taxpayers pertains only to non domiciled residents -- and is where taxation on credit card purchases is covered. Non dom "residents" is a strange animal, at least it appeared so when I tried to figure out from HMRC literature on how you become one. Any Brits out there a non dom UK resident? If so, could you explain how you acquired this status -- and how you tie break your Thai tax residency status with your UK tax residency status. Thanx.

Actually, this is almost verbatim what our Bangkok Bank branch manager told us several years ago. Her explanation was: If a bank does not know of your death, they have no legal responsibility to freeze your account -- and withdrawals, per usual, can occur. Wife has already been told to withdraw most of my funds (leaving small amount, and account open) soonest -- even before my barbecue.

Not advice, but an observation. Sounds like you have done research concerning the legal requirement for somebody -- police, hospital, embassy, whomever -- to ferret out where you bank and then notify this bank(s) of your death. Could you please share this information? Thanx.

If you read that referenced thread, you'll see that there have been situations where (confused) bank managers have frozen joint accounts. So, maybe best to transfer to her personal account. And, yeah, the bank has no avenue to ever hear of your death -- embassy, hospital, wat, whatever -- no legal requirement to notify your bank -- not that they would ever know what that bank is....

Yeah, with online banking -- have her do it fast, in case the bank finds out about your death and freezes your account (thereby she'll have to rely on a many-month probate process). Supposedly, she's supposed to go the probate route. But, especially if she's the sole beneficiary in your Wiil, there's no aggrieved party to press charges. Another thing you might do is make her co-signatory on your account. This doesn't mean it's joint, so there's no affect with immigration. But, it allows her to access your account, so if you're terminal, she can tap your account perfectly legally. And, if you're dead -- where, supposedly, co-signatory status is no longer in effect -- this erstwhile status just adds further credence to her bonafides, along with her being sole beneficiary in you Will. Only the lawyer mafia, out a probate fee, will be concerned. Too bad.

Why? Would any Thai taxes due, per DTA, not be a one for one against your US tax return? Or, do you have such substantial Long Term Cap gains, that Thai taxes on would, as a credit, overwhelm your US taxes? Can't think of any other scenario where you might lose money with any new Thai tax scheme.

This thread is about what happens if Thailand switches to worldwide taxation. If they do,the remittance aspect of taxation avoidance disappears. So using remitted gifts for tax avoidance will no longer be a player.

Agreed. Most Yanks I know don't live off substantial annual LT cap gains and dividends. But, yes, there are some.

Sorry. They're all fixated with the blood in the water.

What is it about tax credits that you don't understand? The DTA between Thailand and US designates which country has primary taxation rights -- and thus gets to keep all taxes collected -- and which country has secondary taxation rights -- and has to absorb a credit for the taxes paid to the primary country. Have an IRA or private pension? DTA says Thailand has primary taxation rights. So, you have to file with them, and pay full-up taxes -- no credit from US. But, you also have to file with the US (per saving clause, meaning US always has at least secondary taxation rights). As such, when you file your US return, you use a tax credit for the Thai taxes paid to reduce one-for-one your US taxes for the taxes paid Thailand. Bottom line: Your tax bill under this new worldwide Thai taxation scheme will be the same as if you never paid taxes to Thailand. So, file in March with Thailand, and pay their taxes on your declared private pensions and IRAs. Then, file with US, and reduce your tax bill by the Thai tax credit. Like to file early with US? You can figure out on the back of an envelope what your Thai tax will be on the US pensions/IRAs, by January. US doesn't need any formal paperwork to justify the tax credit, so just go ahead with your US tax return, with the numbers from the back of the envelope. Not too complicated. No double taxation -- unless you think having to file with two countries defines "double taxation, " but ignoring the credit aspect.......?

Are you currently paying US taxes on this retirement income?

Two scenarios here. If Thailand, per DTA, has primary taxation rights on income, like private pensions -- they keep all the taxation, as if US taxation, and its credit, didn't exist. They don't lose any taxation collection due to a US tax credit, as no such credit needs to be absorbed. Only the US has to deal with absorbing a Thai taxation credit, due to having only secondary taxation rights. Second scenario, much rarer is: Rental income on property in US. US has primary taxation rights on this income, thus gets to keep all taxation, without any regard to a credit. DTA, however, gives Thailand secondary taxation rights on this rental income -- but Thailand has to absorb a credit for the taxes paid to the US. Thus, credit could completely wipe out any Thai taxation - if US taxation were higher than Thai taxation. But, if Thai taxation higher, they get to keep what's left after the credit.

Definitely.

Many because -- their assessable income doesn't reach the threshold for becoming taxable income.

Why file jointly, adding your income to the wife's 25% tax rate? File singly, and your numbers will be a lot better.