UK residency - sufficient ties

Andy75 · March 15, 2020

Hi. I have some general queries regarding UK residency if I was to retire to Thailand, if anyone can help.

I am currently a frequent visitor to Pattaya and would like to retire there in a few years when I am 50.

My plan is to sell my house in the UK and buy a flat to rent out to fund the rent for a condo in Pattaya, whilst living off my ISAs/Pension/State pension.

At this point I’d like to rent a condo but could look at buying one, eg a studio in Centara avenue for £50-£60k.

It seems to be advantageous to keep UK residency ?? in order to have access to NHS if anything was to happen which wouldn’t be covered by health insurance in Thailand, and so that I’d still be entitled to increases in state pension. Also as far as I know I’d only be taxed in UK due to the double taxation treaty.

Regarding the sufficient ties, I would have to stay 91 days in the UK to fulfill 2 x sufficient ties. The first would be the 90 days tie, and the second the accommodation tie. I would either wait until a tenant moved out of my flat and I would move in for 91 days, or I would rent a room in shared accommodation for cheap for 91 days.

I work offshore so would like to think I’d have the option for adhoc work if needed.

Any advice on fulfilling this dream and if I am going about it the totally wrong way along with any tips would be much appreciated.

Thanks

Kwasaki · March 16, 2020

Try Pattaya forum where UK people may already do what you plan.

Andy75 · March 16, 2020

Kwasaki - thanks, will do.

Oxx · March 17, 2020

The criteria for residency are not the same for HMRC and the NHS. The NHS would definitely consider you non-resident because you're not settled in the UK. A quick check of your passport would let them see that.

As for tax, state pension is not covered by the UK-Thai tax agreement, so in theory is subject to double taxation (though in practice this doesn't actually happen at the moment).

I see no benefit in continuing to be subject to UK income tax and CGT.

Your scheme for buying and renting out a flat in the UK to cover your accommodation costs in Thailand is a bad one. You'll pay income tax on the income, and CGT on disposal, even if non-resident. You'll have periods where you don't have tenants, and so no income. Tenants may trash the place, leaving you with high repair bills. And then there are the general headaches of being a landlord. Better, in my opinion, to sell up completely, then invest the proceeds offshore, out of the reach of both UK and Thai tax authorities. Use the investment income to cover your Thailand accommodation costs if you decide to rent. Only once you're well settled in the country should you consider buying.

topt · March 17, 2020

On 3/15/2020 at 9:56 PM, Andy75 said:

whilst living off my ISAs/Pension/State pension.

Will you be able to take any Pension that early? Otherwise you will be living off only your Isa for x years?

On 3/15/2020 at 9:56 PM, Andy75 said:

in order to have access to NHS if anything was to happen which wouldn’t be covered by health insurance in Thailand,

if you take out the right policy (unless you have existing conditions?) what do you think would not be covered?

I agree with @Oxx re income tax/CGT but would have thought that may be more of an issue now whilst you are earning. Great opportunity to not pay any tax and save a lot of money depending on your specifics.

Since you won't be paid any state pension for another 16/17 or more years after your planned retirement I personally would ignore the issue of frozen increases. It may be irrelevant in many ways by then

Oxx · March 17, 2020

22 minutes ago, topt said:

I personally would ignore the issue of frozen increases

I would go further: completely ignore the state pension in your financial plans. There's no knowing how much the state pension will be in a couple of decades, and it's perfectly possible for a government to decide only to pay it to people living in the UK.

More generally, do factor in foreign exchange rate risk. At one time a pound bought 70+ baht. Now, a few years later, it's less than 40. There's no reason there shouldn't be a similar massive collapse in the value of Sterling some time in the future. You need to be very well capitalised, with a large margin of extra funding, safely to make the sort of move you're considering.

UKresonant · March 17, 2020

First thing is don't buy a condo here, there is no retirement visa here, if you don't have a Thai ID card, don't buy stuff!

The sufficient ties, are for taxation, if you are currently tax resident 92 days in the UK (present at the end of the day should do it.

If you want to remain attached to the NHS, do not make more than a three month continuous trip outside the UK! Periods of less than three months are ignored.

If you move any significant amounts of money here, make sure you can show it is savings from the previous calendar year, or be in Thailand less than 180days in that calendar year.

Edited March 17, 2020 by UKresonant

Andy75 · March 17, 2020

1 hour ago, UKresonant said:

First thing is don't buy a condo here, there is no retirement visa here, if you don't have a Thai ID card, don't buy stuff!

The sufficient ties, are for taxation, if you are currently tax resident 92 days in the UK (present at the end of the day should do it.

If you want to remain attached to the NHS, do not make more than a three month continuous trip outside the UK! Periods of less than three months are ignored.

If you move any significant amounts of money here, make sure you can show it is savings from the previous calendar year, or be in Thailand less than 180days in that calendar year.

Thanks for this info. I’ve been looking for NHS criteria but has been difficult to find.

With regards to moving money over eg. to a Thai bank account and showing it in previous years savings In UK bank account and being in Thailand for less than 180 days, is this to avoid becoming liable to Thai tax?

Thanks..

Andy75 · March 17, 2020

12 hours ago, Oxx said:

The criteria for residency are not the same for HMRC and the NHS. The NHS would definitely consider you non-resident because you're not settled in the UK. A quick check of your passport would let them see that.

As for tax, state pension is not covered by the UK-Thai tax agreement, so in theory is subject to double taxation (though in practice this doesn't actually happen at the moment).

I see no benefit in continuing to be subject to UK income tax and CGT.

Your scheme for buying and renting out a flat in the UK to cover your accommodation costs in Thailand is a bad one. You'll pay income tax on the income, and CGT on disposal, even if non-resident. You'll have periods where you don't have tenants, and so no income. Tenants may trash the place, leaving you with high repair bills. And then there are the general headaches of being a landlord. Better, in my opinion, to sell up completely, then invest the proceeds offshore, out of the reach of both UK and Thai tax authorities. Use the investment income to cover your Thailand accommodation costs if you decide to rent. Only once you're well settled in the country should you consider buying.

Thanks very much for this info.

I was thinking of renting in the UK to begin with to fund Thailand expenses just incase things went pear shape or I had second thoughts about living in Thailand, I could then just move back to the flat.

I think I need to live in Thailand for a while first and then commit to what I want to do, I’m trying to set in stone my future now when I don’t know exactly what I will want.

This info is great for me to know to plan.

Thanks.

Andy75 · March 17, 2020

11 hours ago, topt said:

Will you be able to take any Pension that early? Otherwise you will be living off only your Isa for x years?

if you take out the right policy (unless you have existing conditions?) what do you think would not be covered?

I agree with @Oxx re income tax/CGT but would have thought that may be more of an issue now whilst you are earning. Great opportunity to not pay any tax and save a lot of money depending on your specifics.

Since you won't be paid any state pension for another 16/17 or more years after your planned retirement I personally would ignore the issue of frozen increases. It may be irrelevant in many ways by then

With my cash ISAs at the moment they would give me from now £1250 per month until I can draw my pension at 57, and as it stands my pension/state pension would give me £1250 until 85 (the model which gave me this took inflation/tax/interest into consideration). Obviously using this as a rough estimate because like you said never know what will happen.

On top of this I have a house which I can sell which I’m trying to find someway would increase my monthly income up to £1500 plus fund a condo and/or a flat in UK.

The offshore option I haven’t even thought about but am going to look into..

Id like to think £1500 per month would be there or there abouts to enjoy retirement in Thailand?

Also with NHS, I’m thinking about if needed to go into care or dementia, perhaps I’m thinking of it in too much detail as I’ve been through the system with my parents. Hopefully a long time off or won’t happen..

BritManToo · March 17, 2020

1. rent your house, don't sell it.

2. don't tell anyone you've left the UK.

Sorry, but Oxx is talking BS, there is no requirement to show the NHS your passport, or even admit you have one.

Offshore investments are extremely risky, and there's a good chance of losing much of your assets, better to pay tax.

In many areas of the UK you can rent your house to the council, for a fixed term (3 or 5 years) where they guarantee to hand it back in the condition they received it.

Nobody knows you aren't in the UK unless you tell them.

Leave all your bank account addresses unchanged. They don't care if you're living at that house or not.

There's no need to sell your house 1,250 pounds/month is plenty to live here (in Thailand or anywhere else in SEA).

After 10 years out of the UK, I'm still registered with my GP (he doesn't care).

My banks still write to the address I left (they don't care either).

And the banks, credit card companies, and other financial institutions still do credit checks at that address, and I pass despite someone else owning it. Not to mention the passport office and DVLC still accept it.

Edited March 17, 2020 by BritManToo

BritManToo · March 17, 2020

11 hours ago, Oxx said:

More generally, do factor in foreign exchange rate risk. At one time a pound bought 70+ baht. Now, a few years later, it's less than 40. There's no reason there shouldn't be a similar massive collapse in the value of Sterling some time in the future. You need to be very well capitalised, with a large margin of extra funding, safely to make the sort of move you're considering.

In the past sterling was worth 35 baht.

1997-2007 were unusually bad times for Thailand.

Oxx · March 18, 2020

8 hours ago, BritManToo said:

Sorry, but Oxx is talking BS, there is no requirement to show the NHS your passport, or even admit you have one.

Am I? According to The Independent "Hospitals are refusing free treatment to patients who cannot show a utility bill and passport under a new scheme designed to crack down on so-called "health tourism".

https://www.independent.co.uk/news/uk/politics/nhs-hospitals-20-forced-show-passports-id-health-tourism-crackdown-healthcare-jeremy-hunt-government-a7530931.html

phka · March 18, 2020

On 3/17/2020 at 9:53 AM, Oxx said:

The criteria for residency are not the same for HMRC and the NHS. The NHS would definitely consider you non-resident because you're not settled in the UK. A quick check of your passport would let them see that.

As for tax, state pension is not covered by the UK-Thai tax agreement, so in theory is subject to double taxation (though in practice this doesn't actually happen at the moment).

I see no benefit in continuing to be subject to UK income tax and CGT.

Your scheme for buying and renting out a flat in the UK to cover your accommodation costs in Thailand is a bad one. You'll pay income tax on the income, and CGT on disposal, even if non-resident. You'll have periods where you don't have tenants, and so no income. Tenants may trash the place, leaving you with high repair bills. And then there are the general headaches of being a landlord. Better, in my opinion, to sell up completely, then invest the proceeds offshore, out of the reach of both UK and Thai tax authorities. Use the investment income to cover your Thailand accommodation costs if you decide to rent. Only once you're well settled in the country should you consider buying.

And what to do when your forced out of Thailand go back to england and sleep on the street

Oxx · March 18, 2020

20 minutes ago, phka said:

And what to do when your forced out of Thailand go back to england and sleep on the street

Why should that happen? As long as one is fiscally prudent, is law-abiding and continues to meet Immigration's requirements there's not an issue.

Saltire · March 18, 2020

Some good advice here, but some not so good as everyones needs are different.

I am non UK resident with HMRC for 8 years, but still pay UK tax on pensions and property income (but its minimal). You can not self certify online so have to pay a UK accountant (£200 per annum) I have pretty well survived on what you will earn, also on long term savings and tax free pension cash. It can be done on 1000/1500 per month if you are not planning on funding a bar girl lifestyle.

I specifically bought a one bed flat to rent out as a potential bolt hole for an emergency return. It is my emergency fund in case I ever need to pay serious medical bills. I'd never buy a condo in Thailand though.

As for the NHS I hear a few alternative scenarios. As said by another poster, don't tell anyone and you may be ok, but unlikely. You have to requalify for free NHS by stating you are home to stay and then wait 6 months for eligibility. If you want to pay, they will add 50% to the regular cost for people going private.

I had to see a GP one trip home and made an appointmenet at my brothers surgery, but the doctor when he heard my situation was very unhelpful, bordering on hostile. Won't do that again. Went for a free eye test at Boots the Chemist and felt guilty when I lied to being asked if I was permanent in the UK. I would have felt happier paying the $38 ????

Finally I use my brothers address for everything in those 8 years. It's proven invaluable for admin such as pension letters, bank statements, sending out renewed credit cards, drivers licence etc.

You are asking the right questions, many don't then have future problems. Good luck.

Edit. A new one I found out this year is that no Independant Financial Advisor in the UK is allowed to give you advice if you are non resident. I had a recent issue when starting a new pension, and the provider was insisting on a written statement.

Edited March 18, 2020 by Saltire

BritManToo · March 18, 2020

3 hours ago, Oxx said:

Am I? According to The Independent "Hospitals are refusing free treatment to patients who cannot show a utility bill and passport under a new scheme designed to crack down on so-called "health tourism".

https://www.independent.co.uk/news/uk/politics/nhs-hospitals-20-forced-show-passports-id-health-tourism-crackdown-healthcare-jeremy-hunt-government-a7530931.html

60% of the UK population never have passports.

Are they all to be denied health care?

Reading the link ..... it says prove their identity.

So my UK Birth certificate and driving licence would do that.

I can also pass a UK credit check ....... just had one done.

I knew a woman that had the checking job for a NHS trust, essentially they only checked non-whites or people with funny accents, but didn't publicly say that.

Edited March 18, 2020 by BritManToo

BritManToo · March 18, 2020

17 minutes ago, Saltire said:

Edit. A new one I found out this year is that no Independant Financial Advisor in the UK is allowed to give you advice if you are non resident. I had a recent issue when starting a new pension, and the provider was insisting on a written statement.

So you only had problems when you foolishly told the truth.

Learn to lie, my Thai wife/gfs were extremely effective teachers, I no longer have any qualms about lying to anyone about anything.

evadgib · March 18, 2020

7 hours ago, Oxx said:

Am I? According to The Independent "Hospitals are refusing free treatment to patients who cannot show a utility bill and passport under a new scheme designed to crack down on so-called "health tourism".

https://www.independent.co.uk/news/uk/politics/nhs-hospitals-20-forced-show-passports-id-health-tourism-crackdown-healthcare-jeremy-hunt-government-a7530931.html

Access to passport would be a breach of GDPR if push came to shove.

evadgib · March 18, 2020

3 hours ago, BritManToo said:

So you only had problems when you foolishly told the truth.

Learn to lie, my Thai wife/gfs were extremely effective teachers, I no longer have any qualms about lying to anyone about anything.

Having shot myself in the foot years ago I entirely agree.

UKresonant · March 19, 2020

On 3/17/2020 at 10:43 PM, Andy75 said:

Thanks for this info. I’ve been looking for NHS criteria but has been difficult to find.

With regards to moving money over eg. to a Thai bank account and showing it in previous years savings In UK bank account and being in Thailand for less than 180 days, is this to avoid becoming liable to Thai tax?

Thanks..

NHS e.g.

https://www.sehd.scot.nhs.uk/mels/CEL2008_09.pdf

"Ordinarily Resident 33. To retain their right to access NHS services as a person ordinarily resident in Scotland, a person must spend no more than 3 months of the year (continuously) outside the UK and must be lawfully entitled to return and remain within the UK. Different rules do, however, apply to UK State Pensioners. It is open to GP practices to remove patients from their lists if they have evidence that they have been out of the country for more than 3 months."

There is a much more resent publication which says absences of less than 3 months from the UK are ignored for the purpose of residency. Can't find the link, probably on the PC at home in the UK. You would still have to show your residency in the UK by other means.

It may not fit your house configuration or budget plans, but if I was doing what you are planning., I would be looking at renting a room and keeping a Bedroom in the house as a private bit. Presuming the rent a room Tax break is still available?

"The Rent a Room Scheme. The Rent a Room Scheme lets you earn up to a threshold of £7,500 per year tax-free from letting out furnished accommodation in your home. This is halved if you share the income with your partner or someone else. You can let out as much of your home as you want". You can opt in to the scheme at any time if:

you’re a resident landlord, whether or not you own your home....

https://www.gov.uk/rent-room-in-your-home/the-rent-a-room-scheme

If you rent the property all sorts of CGT issues etc. If you still stay there, still pay your council tax etc.

The Thai Tax is all your in year income in Thailand and Elsewhere if remitted to Thailand in the same Tax (Calendar year), once you have spent cumulatively 180 days in Thailand.

So I suppose it may be Ideal to have two savings accounts, an odd year and even year account.

Even year account receives income in 2020 and only that is transferred to Thailand in 2021 and so on.

This has not been a major concern yet but it is probably a configuration that could be adopted, just in case)

I made sure I was in Thailand less than 180 days, in 2018, when activating my pensions, but gave me the tail end of 2017-2018 and the start of the 2018-2019 Tax years to do things like ISAs etc.

So my time in Thailand is essentially governed by not more than 3 months at any one time, at least 92 days at end of the Day April 6th to April 5th the following year back in the UK. In addition to all the Thai regulations and Health insurance restrictions in the other forums. The longest trip to Thailand so Far is 67 days (my first trip here was in 1993). All my life in the UK is still in place, car on the road (two up until recently) etc.

I would think you need >2000 baht a Day when in Thailand, your predicted budget is maybe just a little light (hope you don't mind me commenting)?

Edited March 19, 2020 by UKresonant

Andy75 · March 19, 2020

16 hours ago, UKresonant said:

NHS e.g.

https://www.sehd.scot.nhs.uk/mels/CEL2008_09.pdf

"Ordinarily Resident 33. To retain their right to access NHS services as a person ordinarily resident in Scotland, a person must spend no more than 3 months of the year (continuously) outside the UK and must be lawfully entitled to return and remain within the UK. Different rules do, however, apply to UK State Pensioners. It is open to GP practices to remove patients from their lists if they have evidence that they have been out of the country for more than 3 months."

There is a much more resent publication which says absences of less than 3 months from the UK are ignored for the purpose of residency. Can't find the link, probably on the PC at home in the UK. You would still have to show your residency in the UK by other means.

It may not fit your house configuration or budget plans, but if I was doing what you are planning., I would be looking at renting a room and keeping a Bedroom in the house as a private bit. Presuming the rent a room Tax break is still available?

"The Rent a Room Scheme. The Rent a Room Scheme lets you earn up to a threshold of £7,500 per year tax-free from letting out furnished accommodation in your home. This is halved if you share the income with your partner or someone else. You can let out as much of your home as you want". You can opt in to the scheme at any time if:

you’re a resident landlord, whether or not you own your home....

https://www.gov.uk/rent-room-in-your-home/the-rent-a-room-scheme

If you rent the property all sorts of CGT issues etc. If you still stay there, still pay your council tax etc.

The Thai Tax is all your in year income in Thailand and Elsewhere if remitted to Thailand in the same Tax (Calendar year), once you have spent cumulatively 180 days in Thailand.

So I suppose it may be Ideal to have two savings accounts, an odd year and even year account.

Even year account receives income in 2020 and only that is transferred to Thailand in 2021 and so on.

This has not been a major concern yet but it is probably a configuration that could be adopted, just in case)

I made sure I was in Thailand less than 180 days, in 2018, when activating my pensions, but gave me the tail end of 2017-2018 and the start of the 2018-2019 Tax years to do things like ISAs etc.

So my time in Thailand is essentially governed by not more than 3 months at any one time, at least 92 days at end of the Day April 6th to April 5th the following year back in the UK. In addition to all the Thai regulations and Health insurance restrictions in the other forums. The longest trip to Thailand so Far is 67 days (my first trip here was in 1993). All my life in the UK is still in place, car on the road (two up until recently) etc.

I would think you need >2000 baht a Day when in Thailand, your predicted budget is maybe just a little light (hope you don't mind me commenting)?

You can comment on anything!!

Yes the budget I’ve worked out is the bear minimum for the lifestyle I’d like in Thailand, hopefully I can bump that up a bit until I’m confident I’ll have enough.

I haven’t looked into the rent a room scheme before, but can see it could be an advantage if I didn’t want to sell what is my home now.

Thanks for all this..

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