Retirement in S/E Asia, the "unknown" factors...

[swissie]

Since this is mostly about "money", I believe this is the right sub-forum.

To plan for retirement in S/E Asia, one wishes to have a crystal-ball. There are a few "unknowns":
- What is the inflation-rate going to be over (let's say) the next 10 years? = Probably higher than in home-country. Economic growth-rates higher than in home-country.
- Exchange-Rates: The "Gap" between mature economies and S/E Asian Countries is narrowing. S/E Asian currencies bound to get stronger. (Especially Brits and Aussies can sing a song when it comes to "Currency-Fluctuations".)
- There seems to be a tendency to cut state-pensions for Farangs, that decide to live outside of their home-country (= why should they live like Kings, while pensioneers staying home live like dogs !?!?).
Only a few of many "unknowns". But if only one of those "unknowns" take place in form of a big "Negative", it may throw a big Monkey-Wrench in ones retirement-plans.
-------------------------------------------
On such occasions, I used to consult my Romanian Clairvoyant Gipsy Lady. But these days, she refuses to make predictions concerning Farangs and their retirement-plans in S/E Asia. She claims, that the likelyhood that a certain "Female-Factor" enters the equasion, would make her predictions useless in the first place.
-------------------------------------------
Still, what would help to survive "unknowns"?
- Next to your rental-income, HAVE MONEY ! (10 Mil Bht and upwards).
- Keep your house in home-country. The house that you build here can not be put in a container to be shipped "home".
- Remember, that re-locating to a foreighn country (at an advanced age), is always an adventure. As one gets older and health-issues start to emerge, one can only hope that the "friends/family" prove to be friends and good-family and not some vultures circling overhead.
This may well be the most important "unknown".
Cheers.

[champers]

No need to bother with expensive health insurance; if anything serious crops up use crowd funding. It is all the rage these days and the way to go.

[sirineou]

 Ad to the mix political instability.

Answer, don't burn your bridges.

If you sold your house back home and got $200,000 invested with an annual return of 6% you would get an income of $1000 p/m ( not considering tax and fees) with the principle remaining but depreciation by an average of 2% per year

If you kept the house and rent it ,you would receive  about $1500 rent per month ( depending on market)  minus 10% for management and 10 % for maintenance equals $1300 p/m    and your property is appreciating in value. But you don't have the liquidity of money in the bank , which is a double edged sword. You don't have the funds immediately if needed, but also you don't get to spend it impulsive.

But you always have a way back home.

Please don't argue the numbers, they are approximations used to make a point  

   

[ezzra]

Every moment of our life, from the cradle to the grave, can be classified as 'Unknown' so what's a few more?

 

Edited February 15, 2018 by ezzra

[GOLDBUGGY]

4 hours ago, sirineou said:

 Ad to the mix political instability.

Answer, don't burn your bridges.

If you sold your house back home and got $200,000 invested with an annual return of 6% you would get an income of $1000 p/m ( not considering tax and fees) with the principle remaining but depreciation by an average of 2% per year

If you kept the house and rent it ,you would receive  about $1500 rent per month ( depending on market)  minus 10% for management and 10 % for maintenance equals $1300 p/m    and your property is appreciating in value. But you don't have the liquidity of money in the bank , which is a double edged sword. You don't have the funds immediately if needed, but also you don't get to spend it impulsive.

But you always have a way back home.

Please don't argue the numbers, they are approximations used to make a point  

   

I think you missed so important factors in your equation. For one thing, and if you could get $1.500 in Rental Income, less the 10% Managment Fee and 10% Maintenance, you are not left with $1,300 but rather you have $1,200.  

 

This $1,200 in Rental Income is also subject to Income Taxes in the country where it is earned. One reason people move away and Retire is they become Non-Residents of the country they lived in, and thus not subject to Personal Income Taxes. But not including Governement Persions.  

 

You also do not get to keep all the appreciated value on your property while you are renting it and as it goes up in value. Once that property becomes a Rental Property you will be subject to a Capital Gains Tax on any increase in property value. An interesting point to remember if doing this, is that you do not have to sell your property first to have to pay this Capital Gains Tax. If you move back in, and this property ceases to be a Rental Property, you will have to pay that tax then. 

 

If one chooses to keep his property back home to rent out, perhaps the best way to do this is to take out a mortgage on this property equal to your rental income, propery taxs, maintenance and insurance and keep this money in a safe investment. In this way you can wrtie off the interest on your mortgage payment, which should be the biggest piece, as well as your maintenance, insurance, and property tax, leaving very little taxable rental income. You would still have cash funds locked up in a bank.  

[dotpoom]

Sometimes just living a day at a time and taking life as it comes...works a treat.

   I have come across people in my life who start to get worried because they have nothing to worry about........so they look for something to worry about?

[theguyfromanotherforum]

55 minutes ago, GOLDBUGGY said:

I think you missed so important factors in your equation. For one thing, and if you could get $1.500 in Rental Income, less the 10% Managment Fee and 10% Maintenance, you are not left with $1,300 but rather you have $1,200.  

 

This $1,200 in Rental Income is also subject to Income Taxes in the country where it is earned. One reason people move away and Retire is they become Non-Residents of the country they lived in, and thus not subject to Personal Income Taxes. But not including Governement Persions.  

 

You also do not get to keep all the appreciated value on your property while you are renting it and as it goes up in value. Once that property becomes a Rental Property you will be subject to a Capital Gains Tax on any increase in property value. An interesting point to remember if doing this, is that you do not have to sell your property first to have to pay this Capital Gains Tax. If you move back in, and this property ceases to be a Rental Property, you will have to pay that tax then. 

 

If one chooses to keep his property back home to rent out, perhaps the best way to do this is to take out a mortgage on this property equal to your rental income, propery taxs, maintenance and insurance and keep this money in a safe investment. In this way you can wrtie off the interest on your mortgage payment, which should be the biggest piece, as well as your maintenance, insurance, and property tax, leaving very little taxable rental income. You would still have cash funds locked up in a bank.  

 

This man got it right. I'm renting out and the post is spot on.

[LivinLOS]

I see threads all the time... Sure come to Thailand and retire with 1000 euros a month, its fine I do it.. 

 

Yeah until what happens ?? 

 

Inflation, sickness, vehicle accident, robbery or scamming, a wife and or new unexpected child, cleaned out by poor choices with wife / GF / mistress / mia noi, bad business, bad property deal, etc etc etc.. 

 

Its exactly these budget retirees who turn into the bitter expat trapped who cant leave.. 

 

Also, are you coming here to simply count out the days left.. Or are you coming here to live, to travel, to have hobbies and passtimes, to actually do things here and around the region ?? 

 

Take the initial number I mentioned, double it at a minimum, and double it again for actual proper safety.. I wouldnt consider coming here without a stable, inflation protected mid 1xx k a month available. 

[chicowoodduck]

Just pray for good health....once that goes out the door the rest is shi*...?

[PerkinsCuthbert]

Oh dear me, yet another thread concerning the existential worries of homo farangus glumus maximus.

Edited February 16, 2018 by PerkinsCuthbert

[topt]

On 16/02/2018 at 9:22 AM, theguyfromanotherforum said:

 

This man got it right. I'm renting out and the post is spot on.

Depoends which country is being referred to -

 

On 16/02/2018 at 8:25 AM, GOLDBUGGY said:

You also do not get to keep all the appreciated value on your property while you are renting it and as it goes up in value. Once that property becomes a Rental Property you will be subject to a Capital Gains Tax on any increase in property value. An interesting point to remember if doing this, is that you do not have to sell your property first to have to pay this Capital Gains Tax. If you move back in, and this property ceases to be a Rental Property, you will have to pay that tax then. 

Above is not the case in the UK

 

On 16/02/2018 at 9:22 AM, theguyfromanotherforum said:

In this way you can wrtie off the interest on your mortgage payment,

Now or soon not to be true in the UK - they removed this little perk.

[GOLDBUGGY]

2 hours ago, topt said:

Depoends which country is being referred to -

 

Above is not the case in the UK

 

Now or soon not to be true in the UK - they removed this little perk.

I have a Friend living in London U.K. right now who is planning on either moving back into her rental property, or selling it, and is facing this Capital Gains Tax Issue with her Accountant right now. So indeed it does exist in the UK.

 

You just don't know about it, as many people don't have a Rental Property so are never faced with this issue. Or rent there property out but never declare this income, making this unlawful. The property you live, or don't rent out, is not subject to this tax. 

 

As long as a Capital Gains Tax remains in force, you will always be able to deduct the interest on borrowed money to earn this Capital Gain. They go hand in hand. If they remove this little perk then they will have to remove the Capital Gains Tax on that perk. 

[theguyfromanotherforum]

9 minutes ago, GOLDBUGGY said:

I have a Friend living in London U.K. right now who is planning on either moving back into her rental property, or selling it, and is facing this Capital Gains Tax Issue with her Accountant right now. So indeed it does exist in the UK.

 

You just don't know about it, as many people don't have a Rental Property so are never faced with this issue. Or rent there property out but never declare this income, making this unlawful. The property you live, or don't rent out, is not subject to this tax. 

 

As long as a Capital Gains Tax remains in force, you will always be able to deduct the interest on borrowed money to earn this Capital Gain. They go hand in hand. If they remove this little perk then they will have to remove the Capital Gains Tax on that perk. 

 

This. Seriously..... you don't pay capital gains on rental property, hahaha and lol.

 

 

same in Canada and I assume same in Australia or NZ.

[GOLDBUGGY]

6 minutes ago, theguyfromanotherforum said:

 

This. Seriously..... you don't pay capital gains on rental property, hahaha and lol.

 

 

same in Canada and I assume same in Australia or NZ.

I am afraid that you are totally wrong about this My Fiend! You need to do more (some) research!

 

When a person buy stocks in the Stock Market, and earns an income from them, as in Dividends, he has to pay Income Tax on that. Should the value of that stock price increase, which many people hope it will do one day, and you sell it at a profit, you are then subject to more taxes known as Capital Gains Tax. 

 

This is pretty well the Tax Law for any investment you make. Whether it is Used Cars, Gold Coins, Fine Art, or Rental Propery. As many people also make investments in Real Estate, including Rental Property. They are allowed to deduct all reasonable costs from there rental income and are expected to pay taxes on there profit, like the Dividend in a Stock. So why would this increase in value on a Rental Property not be taxed by Capital Gains, when an increase in a Stock Price is?  

 

Since when does any of these governments you mentioned here ever give a Tax Payer a Break? Besides perhaps not taxing you on the property value increase on the house you live in? Which if they did they would make it impossible for you to sell it and buy another house of equal or greater value. When your house goes up in value so does the one you want to trade up to also. 

 

But even if you don't sell the house you lived in, and die in it, your dependents will still be subject to the Inhereitance Tax,  So the bottom line is that you never get a Tax Breaks at all on anytime, including the house you live in. This is certainly easier for most people to believe and understand than you saying the government gives you this easy money to keep on a Rental Property because it went up 20% in value.   

[theguyfromanotherforum]

20 minutes ago, GOLDBUGGY said:

I am afraid that you are totally wrong about this My Fiend! You need to do more (some) research!

 

When a person buy stocks in the Stock Market, and earns an income from them, as in Dividends, he has to pay Income Tax on that. Should the value of that stock price increase, which many people hope it will do one day, and you sell it at a profit, you are then subject to more taxes known as Capital Gains Tax. 

 

This is pretty well the Tax Law for any investment you make. Whether it is Used Cars, Gold Coins, Fine Art, or Rental Propery. As many people also make investments in Real Estate, including Rental Property. They are allowed to deduct all reasonable costs from there rental income and are expected to pay taxes on there profit, like the Dividend in a Stock. So why would this increase in value on a Rental Property not be taxed by Capital Gains, when an increase in a Stock Price is?  

 

Since when does any of these governments you mentioned here ever give a Tax Payer a Break? Besides perhaps not taxing you on the property value increase on the house you live in? Which if they did they would make it impossible for you to sell it and buy another house of equal or greater value. When your house goes up in value so does the one you want to trade up to also. 

 

But even if you don't sell the house you lived in, and die in it, your dependents will still be subject to the Inhereitance Tax,  So the bottom line is that you never get a Tax Breaks at all on anytime, including the house you live in. This is certainly easier for most people to believe and understand than you sayings the government gives you this easy money to keep on a Rental Property because it went up 20% in value.   

 

I think your post is wasted on me because i was actually agreeing with you and mocking the other guy.

Edited February 18, 2018 by theguyfromanotherforum

[topt]

1 hour ago, GOLDBUGGY said:

I have a Friend living in London U.K. right now who is planning on either moving back into her rental property, or selling it, and is facing this Capital Gains Tax Issue with her Accountant right now. So indeed it does exist in the UK.

 

You just don't know about it, as many people don't have a Rental Property so are never faced with this issue. Or rent there property out but never declare this income, making this unlawful. The property you live, or don't rent out, is not subject to this tax. 

 

As long as a Capital Gains Tax remains in force, you will always be able to deduct the interest on borrowed money to earn this Capital Gain. They go hand in hand. If they remove this little perk then they will have to remove the Capital Gains Tax on that perk. 

https://www.gov.uk/government/publications/restricting-finance-cost-relief-for-individual-landlords/restricting-finance-cost-relief-for-individual-landlords

Quote

Landlords will no longer be able to deduct all of their finance costs from their property income to arrive at their property profits. They will instead receive a basic rate reduction from their income tax liability for their finance costs.

Firstly you do not incur a Capital Gain until you sell - which you did not mention in your previous post.

So if you move back into a house that becomes your primary residence and do not sell it there is no tax to pay - please send me a link that says otherwise?

Oh and I rent out a property in the UK and pay tax on the income

[theguyfromanotherforum]

9 minutes ago, topt said:

https://www.gov.uk/government/publications/restricting-finance-cost-relief-for-individual-landlords/restricting-finance-cost-relief-for-individual-landlords

Firstly you do not incur a Capital Gain until you sell - which you did not mention in your previous post.

So if you move back into a house that becomes your primary residence and do not sell it there is no tax to pay - please send me a link that says otherwise?

Oh and I rent out a property in the UK and pay tax on the income

 

You pay tax during the years you rented it out. Of course, you will pay no tax if you don't sell it.

[topt]

2 hours ago, theguyfromanotherforum said:

 

You pay tax during the years you rented it out. Of course, you will pay no tax if you don't sell it.

Ah so now you are agreeing with me..........

Whereas before I think you said you were mocking me -

2 hours ago, theguyfromanotherforum said:

 

I think your post is wasted on me because i was actually agreeing with you and mocking the other guy.

And this was the part I was specifically referring to -

On ‎16‎/‎02‎/‎2018 at 8:25 AM, GOLDBUGGY said:

 An interesting point to remember if doing this, is that you do not have to sell your property first to have to pay this Capital Gains Tax. If you move back in, and this property ceases to be a Rental Property, you will have to pay that tax then. 

Which is (being very kind) plain wrong.

 

So theguyfromanotherforum I respectfully suggest you need to brush up on your comprehension skills.......

[theguyfromanotherforum]

13 minutes ago, topt said:

 

 

So theguyfromanotherforum I respectfully suggest you need to brush up on your comprehension skills.......

 

All right.... I'm gonna do that sharpish 

[GOLDBUGGY]

3 hours ago, theguyfromanotherforum said:

 

You pay tax during the years you rented it out. Of course, you will pay no tax if you don't sell it.

Well maybe I am wasting my time again but that is NOT TRUE!  A Rental Property does not have to be sold before you pay Capital Gains Tax on it! Especially if you move back in. Property you decide to move back in later is a little different in this way and for a good reason. 

 

Let's say that you bought a property to live in London a long time ago and paid  100,000 GBP for that. You lived in it for quite a few year and decided to leave London. You discover that your property is now worth 150,000 GBP and that if you rent it out your rent money would pay all expenses and also your mortgage. 

 

On that day you decide to rent it out and start earning an income, that property becomes a Rental Property (an Investment) and thus subject to future Capital Gains Tax. With your starting point being 150,000 GBP. That Property Increase from 100,000 to 150,000 you get to keep as you lived there as it was your primary home. The money you would be entitled to if you sold this property instead of making it an Investment Property. 

 

After more time this same Rental Property has increased in value again and is now worth 200,000 GBP.  It increased another 50,000 GBP in value and if you sold it you would be expected to pay Capital Gains Tax on this 50,000. But instead you decide to move back to London for a few more years and now live in your Rental Property yourself. So now what happens to this 50,000 in Capital Gais Tax you would have owed the government if you sold?

 

Do you honestly believe that your Government is going to forget about this money owed to them just because you decided to move back in again? Like a Pig's Pattoony they will! On the day you move back in this property ceases to be a Rental Property (Investment) and thus this 50,000 Capital Gains Tax must be paid. So it is not only a change of ownership that can force this Capital Gains Tax, but also change of Status and in it's  use.

 

This Capital Gains Tax Law on property actually works to your benefit. Once this Cappital Gains Tax is paid after you move back in, again you are not subject to this tax again,  while you live there, and when property values continue to rise. At least until you die.  

[GOLDBUGGY]

4 hours ago, topt said:

https://www.gov.uk/government/publications/restricting-finance-cost-relief-for-individual-landlords/restricting-finance-cost-relief-for-individual-landlords

Firstly you do not incur a Capital Gain until you sell - which you did not mention in your previous post.

So if you move back into a house that becomes your primary residence and do not sell it there is no tax to pay - please send me a link that says otherwise?

Oh and I rent out a property in the UK and pay tax on the income

If you rent property in the UK and do not plan to move back in until you sell, then you don't have to be concerned about paying Capital Gains Taxes, until you do sell.

 

But if you decide to move back to this property then all of this changes. Best you read up about it first before you make a final decission to move back in. It may surprise you! 

[theguyfromanotherforum]

44 minutes ago, GOLDBUGGY said:

Well maybe I am wasting my time again but that is NOT TRUE!  

 

Well, all I can say that uk is pretty backwards if that's the case.

 

You see....in Canada I make an "election" to change my primary residence to a rental and do the same when I move back. This letter that I send to revenue agency guarantees that I will have to pay no capital gain tax when I move back into my primary residence. 

 

 

 

[topt]

On ‎18‎/‎02‎/‎2018 at 10:37 PM, GOLDBUGGY said:

But if you decide to move back to this property then all of this changes. Best you read up about it first before you make a final decission to move back in. It may surprise you! 

I have and there is a complicated formula that needs to be calculated to work out what you would have to pay when you sell. However I believe it to be an incontrovertible fact that you do not pay prior to actual "disposal".

You obviously believe otherwise so as suggested before please post a reference that refutes this?

[topt]

On ‎18‎/‎02‎/‎2018 at 11:05 PM, theguyfromanotherforum said:

 

Well, all I can say that uk is pretty backwards if that's the case.

 

You see....in Canada I make an "election" to change my primary residence to a rental and do the same when I move back. This letter that I send to revenue agency guarantees that I will have to pay no capital gain tax when I move back into my primary residence. 

 

 

 

This used to pretty much be the case in the UK but it changed a few years ago and now there is a complicated formula that needs to be worked out to see how much if anything you would need to pay - when you sell. 

It's too early to say if you lived in it before you rented it out for say 10 years and then lived in it for ten years after coming back and then sold it whether anyone would be any the wiser............ 

[GOLDBUGGY]

On 2/18/2018 at 11:05 PM, theguyfromanotherforum said:

 

Well, all I can say that uk is pretty backwards if that's the case.

 

You see....in Canada I make an "election" to change my primary residence to a rental and do the same when I move back. This letter that I send to revenue agency guarantees that I will have to pay no capital gain tax when I move back into my primary residence. 

 

 

 

You mention that in Canada you "elect" to change your primary residence into a rental property with the Tax Man and again do this when, or if, you decide to move back in. But this next time changing it from a rental propery back to your primary residence again. 

 

I agree with what you are saying. But my question to you is why do you think they make you do that if there is no Taxable Capital Gains Tax on this type of property and thus doesn't exist? Why not just move in renters when you want and when you want to move back in just do so, and not say or do anything to anyone?

 

The reason they make you do this is that when you "Elect" to change your primary residence into a rental property with the Tax Man, you also have to provide them with the Fair Market Value of your Residence at that time. When you change back from a rental property to a primary residence again, you again give them the updated Fair Market Value of that Rental Property. . 

 

The difference in this Fair Market Value Price of your Residence, when it first became a Rental Property, and after when it ceased to be a Rental Property and became you Primary Residence again, is a "Capital Gain or Loss". If your Primary Residence went up in Value while it was being used as a Rental Property, you would have a Capital Gain on this property, and thus be subject to a Capital Gains Tax. 

 

This is why the Tax Man makes you do this! If you have no Capital Gain on this property then you obviously have no Capital Gains Tax to pay. Interesting to note that even your Primary Residence under certain conditions can be subject to a Capital Gains Tax even if you lived there and never rented it out at any time.

 

An easy way of avoiding the Tax Man,  was to buy an older run down house at a cheap price, then live in it while you fixed it up, and then sell it the next year for a much higher price. This became known as "Flipping Properties". To prevent people from earning Tax Free Dollars the government made it so now you have to live in your Primary Residence for a certain length of time, or be subject to a Capital Gains Tax. 

[GOLDBUGGY]

1 hour ago, topt said:

This used to pretty much be the case in the UK but it changed a few years ago and now there is a complicated formula that needs to be worked out to see how much if anything you would need to pay - when you sell. 

It's too early to say if you lived in it before you rented it out for say 10 years and then lived in it for ten years after coming back and then sold it whether anyone would be any the wiser............ 

It has been awhile since I owned Rental Properties, and I agree that since then the Tax Laws could have changed. I certainly can't rebutal some "Complicated Tax Formula" that I have not even seen. But it does bring up some interesting scenarios which I now question.

 

For example you now don't have to pay Capital Gains Tax on your property until it is despode of. If you rented out your Primary Residence for several years, and then moved back in later,  then according to you you would still not have to pay any Capital Gains Tax. 

 

But using this same scenario, you pass away living in that house and Will it to your family. This property would now be sold and this Capital Gains Tax would have to be paid, But on top of that the remainig money would also now be subject to Inheretence Tax, so a double tax. Hum???

 

 

[fletchsmile]

On 2/16/2018 at 3:08 AM, sirineou said:

 Ad to the mix political instability.

Answer, don't burn your bridges.

If you sold your house back home and got $200,000 invested with an annual return of 6% you would get an income of $1000 p/m ( not considering tax and fees) with the principle remaining but depreciation by an average of 2% per year

If you kept the house and rent it ,you would receive  about $1500 rent per month ( depending on market)  minus 10% for management and 10 % for maintenance equals $1300 p/m    and your property is appreciating in value. But you don't have the liquidity of money in the bank , which is a double edged sword. You don't have the funds immediately if needed, but also you don't get to spend it impulsive.

But you always have a way back home.

Please don't argue the numbers, they are approximations used to make a point  

   

Goldbuggy made some good points about this post and the numbers.

 

On the numbers, while I won't disagree with your case, they are a key factor in the decision. You assume a 9% gross income yield before expenses on renting and only 6% gross on investing. A key assumption here that gross rental income exceeds investment income.

 

I won't disagree with that for you. But for many people that assumption won't be the case and that will change the points made. So anyone doing this needs to look at their own case of what they can get on both rental income and investments.

 

[BTW After charges, as Goldbuggy corrected the yield on rental income is 6% before taxes and same as 6% before taxes.]

 

In my case, my numbers would have been different. I would be more like 4% - 5% rental income after charges, and 7%+ on investment income. That's at least 2% higher. That would push me much more towards investments.

 

Taxes also can't be ignored. While I could end up being taxable on UK rental income, that 4%-5% would then be eroded further at a rate of tax that would be higher than capital gains tax and tax on divs I would received widening that gap further.

Tax on Thai mutual funds generally don't attract capital gains and divs would have a max WHT rate of 10%

Tax on Singapore investments would have no capital gains for me and divs may depend on what selected. If I selected Singapore real estate investment trusts (REITs) though, I have a portfolio which currently yields about 6.5% tax free with no capital gains tax or income tax on it, and with potential for capital growth because of the underlying property element.

 

Liquidity is an important point as you mention. A key factor within this is you can easily sell part of your investments if liquid. Much more difficult to sell part of a house.

 

Risk on income also needs to be considered. If no tenant all your income is gone (single exposure risk). While stock markets capital value will go up and down, the dividend income will be more stable. Very unlikely all your investments will stop paying dividends even during a market crash.

 

Also depends on someone's understanding and comfort level between property/ renting and investing. 

 

In my case with higher income, more favourable tax, better liquidity and flexibility, more diversification, less admin, knowing what I'm doing etc, investments win out very clearly. For someone with higher rental income that doesn't understand the investment world may be different

 

In terms of having a way home if needed, most of my investments could be sold in a week. The proceeds from those could be used to buy or rent a place back in the UK if needed. So selling your home and investing isn't really burning bridges either.

 

 

Edited February 21, 2018 by fletchsmile

[fletchsmile]

On 2/18/2018 at 5:48 PM, GOLDBUGGY said:

I am afraid that you are totally wrong about this My Fiend! You need to do more (some) research!

 

When a person buy stocks in the Stock Market, and earns an income from them, as in Dividends, he has to pay Income Tax on that. Should the value of that stock price increase, which many people hope it will do one day, and you sell it at a profit, you are then subject to more taxes known as Capital Gains Tax. 

...

But even if you don't sell the house you lived in, and die in it, your dependents will still be subject to the Inhereitance Tax,  So the bottom line is that you never get a Tax Breaks at all on anytime, including the house you live in. This is certainly easier for most people to believe and understand than you saying the government gives you this easy money to keep on a Rental Property because it went up 20% in value.   

This is where effective tax planning comes in. The tax breaks are there, you need to know how to take advantage of them. As a qualified accountant I would just say while that may be the case for people who don't plan, that are many mitigating steps you can take:

 

- I pay zero income tax or capital gains tax for example on the investments in my UK ISA and SIPP

 

After that I moved some money out of the UK:

 

- For Thai investments zero capital gains tax and minimal income tax (max at 10% on some)

 

- For Singapore investments I pay zero capital gains tax, no income tax on REITs and no additional tax on the divs I hold on other investments, beyond what the individual underlying investment pays

 

- For inheritance tax, to reduce this I moved money out of the UK and put it in joint names in Singapore and joint or wife's name in Thailand, and in come cases the childrens' name in Thailand

 

- Pensions these days can also be a way to pass on assets and reduce IHT

 

Once you start moving assets out of the UK, you find there are different ways to reduce various taxes. The problem with a UK house of course is moving it outside the UK 

[Oxx]

On 16/02/2018 at 12:36 AM, swissie said:

Keep your house in home-country.

 

For someone British and hoping to be deemed non-UK domiciled upon death, so avoiding UK inheritance tax on their worldwide assets, this would be bad advice.