Declaring pension 'income' and creating a tax liability..

[gavlar]

25 minutes ago, LivinLOS said:

You should then become non resident of the UK, and claim your pension income that is taxed back.. 

Of course it freezes state pensions, and denies you emergency access to healthcare should you return. 

Unfortunately my UK work pension is taxed at source...no way round it.

[LivinLOS]

15 minutes ago, gavlar said:

Unfortunately my UK work pension is taxed at source...no way round it.

Even if you become non resident of the source country ?? 

 

Why is that ?? 

[topt]

2 hours ago, jojothai said:

If this is correct, you can expect the banks to start issuing requests for the CRS information this year.

Not sure if you refer to Thai banks or not? UK banks have been asking for last couple of years.

 

Also as per last October see comments here -https://citizenshipbyinvestment.ch/index.php/2018/10/31/thailand-rbi-scheme-not-listed-in-oecd-crs-list/

Quote

Thailand is still in the early stages of CRS  implementation with the government having to enact laws directing Thai financial institutions to comply with CRS requirements.  Thailand will begin sharing data from 2021 or 2022. Currently Thailand exchanges tax information on request or through double taxation treaties.

The key is that they still need to enact the legislation. 

[gavlar]

27 minutes ago, LivinLOS said:

Even if you become non resident of the source country ?? 

 

Why is that ?? 

They introduced law to basically stop expats gaining from tax free (40%) investment but not getting taxed on removal. 

[topt]

27 minutes ago, LivinLOS said:

Even if you become non resident of the source country ?? 

 

Why is that ?? 

Because it is earned in the UK so you are taxed there.

You may be eligible for the UK allowance and your taxable level will depend on various thresholds.

The only way to avoid it is to move your pension offshore (if you can)- with all the associated costs and potential pitfalls.

 

[LivinLOS]

1 minute ago, topt said:

Because it is earned in the UK so you are taxed there.

You may be eligible for the UK allowance and your taxable level will depend on various thresholds.

The only way to avoid it is to move your pension offshore (if you can)- with all the associated costs and potential pitfalls.

 

So you register your non residence.. And claim back any overpaid deductions at the end of the tax year. The uk defines tax liability by residence not source. Harder for Americans I understand. 

Just because a pension is sourced in the uk doesnt make it UK source income, unlike rental income etc which is uk sourced no matter where you are resident (because its the uk asset generating the money).

[LivinLOS]

I know for a fact a Brit who is living in the EU, and has a significant private pension, does not pay taxes in the UK on his UK sourced pension he pays it in the European country he is residing in. He actually moans because the tax rate is higher where he now lives. 

[topt]

11 minutes ago, LivinLOS said:

I know for a fact a Brit who is living in the EU, and has a significant private pension, does not pay taxes in the UK on his UK sourced pension he pays it in the European country he is residing in. He actually moans because the tax rate is higher where he now lives. 

I don't profess to know the ins and outs as I currently do not draw any pension but my guess woud be he is taxed as a resident there and there is a DTA between that country and the UK. 

 

*There is no DTA between the UK and Thailand on pension income other than for some "government pensions" (not the state pension but civil service and possibly forces pensions).

 

"as mentioned earlier by @yang123

Edited February 7, 2019 by topt

[LivinLOS]

If you live in Thailand.. Thailand says its taxable here.. 

 

Its then up to you to stop paying it at source, or with your proof of payment here, have it refunded at the end of the tax year. They dont just stop unless you force it. 

 

Just saying 'they tax it at source' isnt right, if your not resident in the uk you shouldnt be taxed there (rental income and other exceptions based on the asset being there).

 

[UKresonant]

25 minutes ago, LivinLOS said:

Just saying 'they tax it at source' isnt right, if your not resident in the uk you shouldnt be taxed there

The two pensions I have currently in payment will always be taxed at source in the UK, and one of the two would have payments suspended, should I go back to work for them!  but perhaps why they are covered by the DTA.

 

(Just thinking how to show how much interest was added to Thai bank accounts for this years UK tax return. Though probably a trivial amount, would have to figure how many pence it was)

[khunPer]

A foreigner's retirement income originating from abroad is often, or more likely normally, taxable in country of origin. Double Taxation Agreements between country of origin and Thailand states, that the same income is not taxed twice, in some cases also taxed by taxation rules of country of residence, which in some cases might be lower than taxation in country of origin. However, many countries have given tax deduction in retirement savings, or pays a governmental retirement pension, and therefore can claim retirement pension payouts taxed in country of origin (there are some special rules within EU that has no interest here).

 

If you pay tax of your retirement pension in your home country, and your home country has a Doble Taxation Agreement with Thailand, you are not also taxable in Thailand of that income – I've actually checked it directly with the tax administration in my home country.

 

However, other income from your home country might be taxable in Thailand – if you bring them into Thailand the same year as earned only – which in some cases might be beneficial, such like dividends from stock markets, that can be taxed by 10 percent only in your home country, if your home country has a higher dividend tax rate (mine has 27 percent at the moment). I've also checked that directly, and in writing, with my home country's tax ministry.

 

I.e. you can be partly taxable in both your country of origin, and in country of residence, and to some degree even plan your tax benefits...????

[LivinLOS]

1 hour ago, johnwf1963 said:

The two pensions I have currently in payment will always be taxed at source in the UK, and one of the two would have payments suspended, should I go back to work for them!  but perhaps why they are covered by the DTA.

 

(Just thinking how to show how much interest was added to Thai bank accounts for this years UK tax return. Though probably a trivial amount, would have to figure how many pence it was)

You keep saying that but not elaborating on why it is taxed there.. 

 

Pension income in the UK should not be taxed if you are not a UK resident.. Rental yields and other items coming from a fixed uk asset is taxed at source. 

If it is taxed at source it would be up to you to claim those taxes back based on not being resident there any longer. 

[LivinLOS]

52 minutes ago, khunPer said:

If you pay tax of your retirement pension in your home country, and your home country has a Doble Taxation Agreement with Thailand, you are not also taxable in Thailand of that income – I've actually checked it directly with the tax administration in my home country.

Depending on the country and DTA of course... But for many countries once you are no longer resident it is up to you to claim deductions at source back, either at the end of your tax year, or by sorting your non residency so they are no longer stopped at source. 

DTA agreements are there not to make it so you never pay 2 lots of taxes, but that if that happens you have a route to claim the tax back, for the country in which you are not liable.. 

People have this incorrect idea that a DTA means you never pay double taxation, thats not true at all.. It gives you a route to claim back, any double taxation at the end of a tax period. I have this a lot with employees posted to a 3rd member state, they often get taxed at local rates from employment and then have to claim that back at the end of the year when they do home country taxes. 

[gentlemanjackdarby]

10 hours ago, Emdog said:

"Income derived from employment, whether in the form of salary, wage, per diem, bonus, bounty, gratuity, pension  ..."

Seems key bit is "employment"... they should have said "in Thailand" but didn't. I'm retired, no employment, no work permit. They tried to cover every way a person could be paid for employment at some sort of job. Surprised they didn't include "sexual favors" as form of remuneration for services rendered....

 

You are, logically speaking, exactly right about 'in Thailand'

 

However, it wouldn't surprise me in the least that if Thailand decided to tighten up their income tax compliance for expats, they tried to tax foreign-earned pensions.

 

The reason I say that is, in the U.S., California does that exact thing, as do too many other states.

 

That goes against the economic and accounting idea of 'nexus', i.e. economic activity should be taxed where the activity taxes place, which in my case, doesn't mean California. I wouldn't mind paying taxes to the state in which I earned the pension; hell, I wouldn't mind paying taxes anywhere other than California, New York, Illinois, and New Jersey.

 

When I first started planning my retirement, California was at the top of the list; when I looked closely into the tax situation there regarding my pension, I found that it would be taxable even though I did not earn one dollar of it there.

 

California never lost one dollar of income tax while I was earning my pension, yet they would tax 100 percent of it when I receive it.

 

I know that California is one of the worst states for both taxing and holding on to their taxpayers when they try to set up residence elsewhere, so I'm not surprised but a bit disappointed; however, I've moved on and am considering Thailand

 

No reason to think Thailand wouldn't try the same thing if given the chance and foreign tax residents sit still for it

[topt]

3 hours ago, LivinLOS said:

ou keep saying that but not elaborating on why it is taxed there.. 

 

Pension income in the UK should not be taxed if you are not a UK resident..

Perhaps you should start here since you seem to disbelieve what several have said -

https://www.gov.uk/tax-uk-income-live-abroad

Quote

Overview

You usually have to pay tax on your UK income even if you’re not a UK resident. Income includes things like:

• pension
• rental income
• savings interest
• wages

 

[jojothai]

9 hours ago, mngmn said:

As far as I can see, Thailand is not involved in CRS? It would impact wealthy Thais far more than the odd retiree in LOS

Thailand has agreed to implememt the CRS and the foreign institutions know that. People can ignore it as they wish.

I have been rebuked by two institutions last year that i have a thai address as my main residence and must give them my thai tax id if i am resident in thailand otherwise my account cannot be maintained

 

I have given them proof that i am not resident and tax resident elsewhere. That was successful, however i have now left my overseas work and will become resident in thailand this year.

So i will have the problem of what to do to legally maintain the overseas accounts unless i lie.

Forget about the rich thais and what they do or not. I dont want to be screwed where i cannot have bank accounts outside thailand.

I will end up needing to have a thai tax id. I consider the implications to be very serious.

 

[david555]

13 minutes ago, jojothai said:

Thailand has agreed to implememt the CRS and the foreign institutions know that. People can ignore it as they wish.

I have been rebuked by two institutions last year that i have a thai address as my main residence and must give them my thai tax id if i am resident in thailand otherwise my account cannot be maintained

 

I have given them proof that i am not resident and tax resident elsewhere. That was successful, however i have now left my overseas work and will become resident in thailand this year.

So i will have the problem of what to do to legally maintain the overseas accounts unless i lie.

Forget about the rich thais and what they do or not. I dont want to be screwed where i cannot have bank accounts outside thailand.

I will end up needing to have a thai tax id. I consider the implications to be very serious.

 

I had 2 times similar request from my E.U. bank , I gave them the proof that Thailand is not on list OESO and NOT in the CRS and so can not give the number as requested ,as not existing, they checked the send OESO list and documents  (to see on internet) and apologists and said that the request slipped in as was standard for all foreign addresses ….end of story until Thailand  join the crs….

OECD landen 2018.pdf

Edited February 7, 2019 by david555

[jojothai]

8 hours ago, gavlar said:

Thailand...if less than a year old Thailand could tax again and I cannot reclaim in UK as no DTT between Thailand and Uk?

CRS is related to funds sent to Thailand that have not been taxed in Home country and currently not taxed in Thailand but if Thailand starts sending details to home country you will be taxed on it in your home country?

 

Yes the double taxation is the implication.

The CRS is not specifically related to doing transfers of funds here and there. You are required to declare your tax residence and more than one country if it applies. The banks/institutions are obliged to exchange information on the account to the other tax authorities. Many exchange agreements are getting agreed and implemented in the last 2 years.

Its a whole new industry that is being created that will be checking that people satisfy the tax requirements, wherever you live.

[topt]

4 minutes ago, jojothai said:

I have been rebuked by two institutions last year that i have a thai address as my main residence and must give them my thai tax id if i am resident in thailand otherwise my account cannot be maintained

I also have 2 offshore financial providers who asked for, but have accepted my arguments (for now) that as a retiree with no liability to current Thai tax legislation, I do not have a TIN.

 

This subject has come up multiple times in threads on the forum over the last couple of years. Some others have successfully argued as I have but others have not had such positive results.

 

I do agree with you that the potential implications could be quite serious - but it is anybody's guess what the time frame on that will be.

[jojothai]

12 minutes ago, david555 said:

….end of story until Thailand  join the crs….

OECD landen 2018.pdf

Thailand has joined the global forum to implement the transparency requirements.

Just because it has not yet committed a date for the automatic exchange of the CRS requirements does not mean that they dont have to start implementing the information requirements.

How are they going to commit to exchange if they dont have any information.

When the banks start issuing the information requests you will know that it is real.

The main question is, when will that happen.

[jojothai]

32 minutes ago, topt said:

I also have 2 offshore financial providers who asked for, but have accepted my arguments (for now) that as a retiree with no liability to current Thai tax legislation, I do not have a TIN.

 

This subject has come up multiple times in threads on the forum over the last couple of years. Some others have successfully argued as I have but others have not had such positive results.

 

I do agree with you that the potential implications could be quite serious - but it is anybody's guess what the time frame on that will be.

Yes i understand that some institutions are lenient.

Unfortunately two of mine were not and it took some effort.

The big concern is what do we do when they insist on a TIN.

For thailand to fix a target to comply with the exchange that will need a lead time of perhaps a few years. However they have to start requiring the information from people.

And as soon as a target is set, our financial providers may be obliged to demand the TIN.

[topt]

4 minutes ago, jojothai said:

The big concern is what do we do when they insist on a TIN.

Sorry if I am misunderstanding you but depending on your local Thai revenue office it should not be that hard to get one. Many on here have one from applying for tax refund on witheld savings interest. 

[jojothai]

Apologies if this has sidetracked from the original issue posted.

However it is related, in that people need to be aware that providing all the evidence of monthly income could have other consequences in the years to come.

[jojothai]

2 minutes ago, topt said:

Sorry if I am misunderstanding you but depending on your local Thai revenue office it should not be that hard to get one. Many on here have one from applying for tax refund on witheld savings interest. 

If so, then it should not be a problem.

But do consider that in relation to the post  with the TIN confirming residence does that not mean the monthly Pension "income" has to be declared.

[topt]

1 minute ago, jojothai said:

If so, then it should not be a problem.

But do consider that in relation to the post  with the TIN confirming residence does that not mean the monthly Pension "income" has to be declared.

This is potentially the elephant in the room.

In theory yes but already the case in theory for those who currently receive pension payments monthly as they are generated. However up to now the Thai revenue service have not been interested in going after these payments and I have not heard of anyone being taken to task on it.  

 

I believe it is better to keep a low profile and not offer up such information until it is absolutely necessary to do so.

One day it will happen but until then............

 

 

 

[david555]

1 hour ago, jojothai said:

Thailand has joined the global forum to implement the transparency requirements.

Just because it has not yet committed a date for the automatic exchange of the CRS requirements does not mean that they dont have to start implementing the information requirements.

How are they going to commit to exchange if they dont have any information.

When the banks start issuing the information requests you will know that it is real.

The main question is, when will that happen.

2021/2022 earliest …..except some test runs before , or on requests....????

Edited February 7, 2019 by david555

[LivinLOS]

12 hours ago, topt said:

Perhaps you should start here since you seem to disbelieve what several have said -

https://www.gov.uk/tax-uk-income-live-abroad

 

Followed immediate with 

 

Non-residents don’t usually pay UK tax on:

• the State Pension
• interest from UK government securities (‘gilts’)

[Emdog]

14 hours ago, gentlemanjackdarby said:

You are, logically speaking, exactly right about 'in Thailand'

 

However, it wouldn't surprise me in the least that if Thailand decided to tighten up their income tax compliance for expats, they tried to tax foreign-earned pensions.

 

The reason I say that is, in the U.S., California does that exact thing, as do too many other states.

 

That goes against the economic and accounting idea of 'nexus', i.e. economic activity should be taxed where the activity taxes place, which in my case, doesn't mean California. I wouldn't mind paying taxes to the state in which I earned the pension; hell, I wouldn't mind paying taxes anywhere other than California, New York, Illinois, and New Jersey.

 

When I first started planning my retirement, California was at the top of the list; when I looked closely into the tax situation there regarding my pension, I found that it would be taxable even though I did not earn one dollar of it there.

 

California never lost one dollar of income tax while I was earning my pension, yet they would tax 100 percent of it when I receive it.

 

I know that California is one of the worst states for both taxing and holding on to their taxpayers when they try to set up residence elsewhere, so I'm not surprised but a bit disappointed; however, I've moved on and am considering Thailand

 

No reason to think Thailand wouldn't try the same thing if given the chance and foreign tax residents sit still for it

FWIW I'm from Oregon, and amount of my state pension is reduced because I don't live there anymore. Essentially a tax without calling it a tax... ah life....

[topt]

51 minutes ago, LivinLOS said:

Followed immediate with 

 

Non-residents don’t usually pay UK tax on:

• the State Pension
• interest from UK government securities (‘gilts’)

Did you bother to follow the link to the State pension above? If you did you would have seen the following -

Quote

Overseas residents

You may be taxed on your State Pension by the UK and the country where you live. If you pay tax twice, you can usually claim tax relief to get all or some of it back.

If the country you live in has a ‘double taxation agreement’ with the UK, you’ll only pay tax on your pension once. This may be to the UK or the country where you live, depending on that country’s tax agreement.

Some people will not pay tax on their state pension as if it is their only source of income it will fall below the Personal Allowance hence the citation you quote.

 

[david555]

14 hours ago, jojothai said:

Thailand has joined the global forum to implement the transparency requirements.

Just because it has not yet committed a date for the automatic exchange of the CRS requirements does not mean that they dont have to start implementing the information requirements.

How are they going to commit to exchange if they dont have any information.

When the banks start issuing the information requests you will know that it is real.

The main question is, when will that happen.

Just try to find Thailand on this updated 2019 list …? http://www.oecd.org/tax/beps/CbC-MCAA-Signatories.pdf

 

http://www.oecd.org/about/membersandpartners/  country members..

http://www.oecd.org/tax/automatic-exchange/common-reporting-standard/

Edited February 8, 2019 by david555