UK Residency Advantages

[Andy75]

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 (or maybe elsewhere in Thailand).

 

If after some advice on wether it would 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.

 

Are there any more pros or cons for keeping it?

 

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. 

 

Regarding the UK residency test, I would be looking at 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.

 

Is anyone currently doing this? Is this the best way to keep UK residency?

 

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

[Pilotman]

Keep an address in the UK, register with a UK doctor, keep UK bank accounts, get and stay on the Electoral Roll somewhere. visit the UK at least once per year.  Never buy a condo here, its a mugs game unless you have thousands of Baht to spare and you will never make any money. Rent don't buy. Never assume that you are "resident" in Thailand.  You never will be, unless you become a permanent resident by virtue of Citizenship.  You are on a extended holiday, which is not more than 12 months long, which is the longest extension to a visa that you may get each year.  Final bit of advice; think again mate. . There are (ex Convid 19) much nicer places to come to 'holiday', unless you have family here.  

[Andy75]

Thanks very much for this.

 

I can use a friends address in UK for everything, I’d just have to make sure the HMRC don’t think he is renting etc.,

 

Also I thought about buying a cheap condo as I would make the money back in rent over 10-15 years if I stayed in Pattaya, but chances are I’d travel around and stay different places ‘if’ I met someone, and much nicer places like you said.

 

I seen the criteria for the retirement visa, would there be implications for this,  would it be best to go for this or better to stay on extended visa for ‘holiday’ purposes?

 

Cheers.

[HauptmannUK]

Pilotman has covered the nuts and bolts of it.  Some words of caution though....(I have been coming to Thailand for several decades, I speak, read and write Thai well and my wife is Thai)...  We spend half the year in UK and about half in Thailand.... I am wary of you calling it a 'dream'. After a while you'll find there are a lot of irritations and some things that make feel uncomfortable, angry, worried. I know quite a few UK expats who feel negatively about the place. We tend to use Pattaya as our base and travel elsewhere in Thailand and SE Asia. I would take a long holiday here (4-6 months) and see how you get on before pulling the trigger.

The rent/buy argument rages interminably. We rented for quite a few years but two years ago my wife bought a condo - I was against initially, but now I like it and feel it was a good decision. 

Also realise that renting a UK property whilst you are in Thailand can be quite stressful. UK rental laws are not as favourable toward the landlord as they used to be and you will lose a fair bit of income in fees, repairs etc etc.

Having a Thai wife, speaking the language etc means I am quite 'invested' in Thailand. I think if I were in your shoes I'd also be giving serious consideration to other retirement destinations.

[jacko45k]

6 hours ago, Andy75 said:

Also I thought about buying a cheap condo as I would make the money back in rent over 10-15 years if I stayed in Pattaya,

Consider the maths, a 5mil baht condo, assume a rent of 15,000 pcm baht (very doable these days)....do you think you will be around 28 years to make the money back. And we have ignored other expenses like yearly maintenance. If you think a 1mil second hand condo, it will be less agreeable. 

[jacko45k]

6 hours ago, Andy75 said:

I seen the criteria for the retirement visa, would there be implications for this,  would it be best to go for this or better to stay on extended visa for ‘holiday’ purposes?

The retirement Visa (no actually Extension) is the most convenient but requires a 800,000 baht bank deposit of 12 months of 65,000 baht income. 

On the other aspect, retaining UK status is worthwhile....if you can manage it. 

[mngmn]

8 hours ago, Andy75 said:

Thanks very much for this.

 

I can use a friends address in UK for everything, I’d just have to make sure the HMRC don’t think he is renting etc.,

 

Also I thought about buying a cheap condo as I would make the money back in rent over 10-15 years if I stayed in Pattaya, but chances are I’d travel around and stay different places ‘if’ I met someone, and much nicer places like you said.

 

I seen the criteria for the retirement visa, would there be implications for this,  would it be best to go for this or better to stay on extended visa for ‘holiday’ purposes?

 

Cheers.

You are ignoring the potential return you could make on 50k. Invested at 4% it would be worth 74k after 10 years. In other words baht 8k/month.

 

Pre-empting the deluge of posts asking where can you get 4%? I would say 'not from a bank' and suggest you google 'safe withdrawal rate'.

[topt]

3 hours ago, mngmn said:

Pre-empting the deluge of posts asking where can you get 4%? I would say 'not from a bank' and suggest you google 'safe withdrawal rate'.

My understanding is that is the rate of withdrawal from your "pot" every year so has nothing to do with a rate of return on your investments - which at the moment if in stocks and shares like many, including me, are likely to be seriously underwater.....

[Guderian]

Different branches of the British bureaucracy have different definitions for residence. For general taxation the rules were cleared up by HMRC some years ago and are now pretty clear, certainly compared with the mess before that.

 

https://www.gov.uk/tax-foreign-income/residence

 

DWP has a six-month test, so if you're out of the country for more than six months a year you're regarded as non-resident and will not receive indexation on your state pension unless you live in a country with which the UK has a social security treaty. Thailand is not one of those. I know a lot of people use a friend's address in the UK to pretend they live there, but it's fraudulent and one day it will come back and bite you. I would never do that.

 

The NHS has a two- or three-month test for entitlement to free treatment and prescriptions, depending where your UK residence is. You're supposed to sign off with your GP if you will be out of the UK for longer than that, but nobody does. Certainly, it's wise to stay registered at a UK address so that you can get treatment from the NHS ASAP if you ever had to return for a big problem. Most (but not all) GP's will also happily write you prescriptions, even if they know you're living abroad most of the time. The problem comes from the practice managers who are bound by the rules of finance and accountancy rather than medical ethics. Sooner or later they'll realise that you're not showing up for routine stuff like blood pressure monitoring or blood checks, and will probably stop your prescription until you explain what's going on.

 

In the end it's up to you and how well you can sleep at night knowing that you might have committed fraud and the authorities may catch up with you one day. If you're uncertain how long you'll stay here then it's probably best to try and work out a transition and stay UK resident, but after many years it becomes more trouble than it's worth and you're better off simply telling the truth and making your own arrangements here.

 

 

[mngmn]

2 hours ago, topt said:

My understanding is that is the rate of withdrawal from your "pot" every year so has nothing to do with a rate of return on your investments - which at the moment if in stocks and shares like many, including me, are likely to be seriously underwater.....

The safe withdrawal rate of 4% is the rate at which you can safely withdraw from and investment over the long term without reducing the real value of your capital.  I used it here as a benchmark rate to illustrate that the OP is ignoring the opportunity cost when deciding to buy a condo. Another way of looking at it is that living in a condo that you paid cash for is not free.  Over the long term it is costing you 4% of the purchase price every year.

 

Safe withdrawal rate is a long term measure and ignores stock market volatility which as you say is highly relevant right now.  But keep in mind the old investment adage that 'time in the market is more important than market timing'.

Edited March 17, 2020 by mngmn

[Andy75]

11 hours ago, HauptmannUK said:

Pilotman has covered the nuts and bolts of it.  Some words of caution though....(I have been coming to Thailand for several decades, I speak, read and write Thai well and my wife is Thai)...  We spend half the year in UK and about half in Thailand.... I am wary of you calling it a 'dream'. After a while you'll find there are a lot of irritations and some things that make feel uncomfortable, angry, worried. I know quite a few UK expats who feel negatively about the place. We tend to use Pattaya as our base and travel elsewhere in Thailand and SE Asia. I would take a long holiday here (4-6 months) and see how you get on before pulling the trigger.

The rent/buy argument rages interminably. We rented for quite a few years but two years ago my wife bought a condo - I was against initially, but now I like it and feel it was a good decision. 

Also realise that renting a UK property whilst you are in Thailand can be quite stressful. UK rental laws are not as favourable toward the landlord as they used to be and you will lose a fair bit of income in fees, repairs etc etc.

Having a Thai wife, speaking the language etc means I am quite 'invested' in Thailand. I think if I were in your shoes I'd also be giving serious consideration to other retirement destinations.

I understand where you are coming from with the more you stay in Pattaya you become more aware of issues with the place. Up until last year I only came to Thailand 2 x per year, but my personal circumstances changed last year (no family now) and am planning on now coming 6 times a year for 18 days each time up until I’m 50, I’m 44 now. I’m able to come more often but from what I’ve read any more than 6 times a year there may be visa problems.

 

Ive started doing what you seem to do, using Pattaya as a base and have a few trips here and there (Koh Samet and Krabi so far) with a ‘friend’ which it great at the moment but aware there are nicer places to use as as base as yourself and pilotman have said.

Where would you advise checking out as an alternative to Pattaya - elsewhere in a Thailand or further afield ?

 

Cheers.

 

 

[Andy75]

4 hours ago, Guderian said:

Different branches of the British bureaucracy have different definitions for residence. For general taxation the rules were cleared up by HMRC some years ago and are now pretty clear, certainly compared with the mess before that.

 

https://www.gov.uk/tax-foreign-income/residence

 

DWP has a six-month test, so if you're out of the country for more than six months a year you're regarded as non-resident and will not receive indexation on your state pension unless you live in a country with which the UK has a social security treaty. Thailand is not one of those. I know a lot of people use a friend's address in the UK to pretend they live there, but it's fraudulent and one day it will come back and bite you. I would never do that.

 

The NHS has a two- or three-month test for entitlement to free treatment and prescriptions, depending where your UK residence is. You're supposed to sign off with your GP if you will be out of the UK for longer than that, but nobody does. Certainly, it's wise to stay registered at a UK address so that you can get treatment from the NHS ASAP if you ever had to return for a big problem. Most (but not all) GP's will also happily write you prescriptions, even if they know you're living abroad most of the time. The problem comes from the practice managers who are bound by the rules of finance and accountancy rather than medical ethics. Sooner or later they'll realise that you're not showing up for routine stuff like blood pressure monitoring or blood checks, and will probably stop your prescription until you explain what's going on.

 

In the end it's up to you and how well you can sleep at night knowing that you might have committed fraud and the authorities may catch up with you one day. If you're uncertain how long you'll stay here then it's probably best to try and work out a transition and stay UK resident, but after many years it becomes more trouble than it's worth and you're better off simply telling the truth and making your own arrangements here.

 

 

Thanks very much for this. I thought the UK residency test criteria would also be appropriate for state pension and NHS reasons, but from this there is more to it.

 

It seems the way to go for me from 50-57 years old to try and keep UK residency until I know what I want to do long term like you said and if I want to commit to Thailand 100% from 57 years old upwards then look at other options as that is when pension/tax and health issues could well start happening and things could get complicated.

 

Thanks..

[Andy75]

2 hours ago, mngmn said:

The safe withdrawal rate of 4% is the rate at which you can safely withdraw from and investment over the long term without reducing the real value of your capital.  I used it here as a benchmark rate to illustrate that the OP is ignoring the opportunity cost when deciding to buy a condo. Another way of looking at it is that living in a condo that you paid cash for is not free.  Over the long term it is costing you 4% of the purchase price every year.

 

Safe withdrawal rate is a long term measure and ignores stock market volatility which as you say is highly relevant right now.  But keep in mind the old investment adage that 'time in the market is more important than market timing'.

I did plan to go and see a financial advisor about the best way to go about funding a condo, but was wondering if you could give me your advice on this bearing the safe withdrawal rate in mind:

 

I’m currently looking at selling my UK home worth £170k. I’d be looking at buying a apartment in UK to rent out (easier to rent out apartment than my house). I have been a landlord so familiar with everything that goes with it. If things went pear shaped in Thailand I could just move back to UK and live in apartment, or if it there is no tenant for a few months I’ve the option to move back and save a bit of money and/or get a part time job if need be if finances are low.

 

I’m thinking one of two things:

 

1. Buy a £170k flat to rent out, after services charges/estate agent fees to manage etc. would give approx £600 per month (if tenanted full time) to fund condo rental in Pattaya 1400B (£350/month and £50 bills) and £200 more to live off.

 

2. Buy a £120k flat to rent out which would give approx £450 per month after charges etc..and buy a condo worth £50k (2MB) to live (maintenance charges approx £500/year).

 

3. Buy a £120k flat and put £50k in savings.

I’m basing condo prices on a 35sq m studio in Centara Avenue as I like the complex and pool and assuming exchange rate stays the same. From reading a few articles it seems condo prices are artificially kept high as the locals would rather keep them high than sell and if I did want to sell then I’d be lucky to get the asking price or sell it at all?

 

From other investments eg. cash isa/pension/state pension, if I was to stop work now they would give me £1250/per month until I was 85. With the condo/flat rental I’d like to be able to have £1500/per month to spend in retirement in Thailand. 
 

Would you think this amount is manageable (£500 for friend to stay with me and £1000 for food/drink and a bit of travelling around per month) ?

 

Thanks again..

 

[Andy75]

15 hours ago, jacko45k said:

Consider the maths, a 5mil baht condo, assume a rent of 15,000 pcm baht (very doable these days)....do you think you will be around 28 years to make the money back. And we have ignored other expenses like yearly maintenance. If you think a 1mil second hand condo, it will be less agreeable. 

I have been looking around the 2-3 million baht mark, in Centara Avenue and Grand Avenue for example as I like the pools, with equivalent rental of 14-18k month. Do you have any knowledge of these places, or would there be other places where I’d get better value for money...quite a vague question I know..

 

Thanks 

[jacko45k]

9 hours ago, Andy75 said:

I have been looking around the 2-3 million baht mark, in Centara Avenue and Grand Avenue for example as I like the pools, with equivalent rental of 14-18k month

Sorry I am not knowledgeable on this..... but consider a few points. The baht is overpriced at the moment, the resale value is likely to be low with us being in a buyers market. Are you sure the place will not become an Airbnb hotel? 

[saengd]

18 hours ago, Guderian said:

Different branches of the British bureaucracy have different definitions for residence. For general taxation the rules were cleared up by HMRC some years ago and are now pretty clear, certainly compared with the mess before that.

 

https://www.gov.uk/tax-foreign-income/residence

 

DWP has a six-month test, so if you're out of the country for more than six months a year you're regarded as non-resident and will not receive indexation on your state pension unless you live in a country with which the UK has a social security treaty. Thailand is not one of those. I know a lot of people use a friend's address in the UK to pretend they live there, but it's fraudulent and one day it will come back and bite you. I would never do that.

 

The NHS has a two- or three-month test for entitlement to free treatment and prescriptions, depending where your UK residence is. You're supposed to sign off with your GP if you will be out of the UK for longer than that, but nobody does. Certainly, it's wise to stay registered at a UK address so that you can get treatment from the NHS ASAP if you ever had to return for a big problem. Most (but not all) GP's will also happily write you prescriptions, even if they know you're living abroad most of the time. The problem comes from the practice managers who are bound by the rules of finance and accountancy rather than medical ethics. Sooner or later they'll realise that you're not showing up for routine stuff like blood pressure monitoring or blood checks, and will probably stop your prescription until you explain what's going on.

 

In the end it's up to you and how well you can sleep at night knowing that you might have committed fraud and the authorities may catch up with you one day. If you're uncertain how long you'll stay here then it's probably best to try and work out a transition and stay UK resident, but after many years it becomes more trouble than it's worth and you're better off simply telling the truth and making your own arrangements here.

 

 

Parts of what you wrote are not correct.

 

DWP does not have a 6 month test for indexation of state pension, instead they examine what is the usual and settled lifestyle of an individual and this can vary hugely from person to person, I know, I have been through this process last year. A person can be outside the UK for say nine months each year and as long as they do that every year, always returning to the same UK base each time, the place where they store their personal possessions, receive their medical care, maintain their bank account etc etc, they can be considered resident, I was. Time is not a factor in this.

 

NHS eligibility rules are here but are different for people over age 65.

https://www.gov.uk/guidance/nhs-entitlements-migrant-health-guide

[saengd]

Maybe parts of my experience will help others:

 

I have lived in Thailand for twenty years, am married to a Thai and we have a home here. Two years ago I bought a small retirement flat in the UK and after I moved in I declared myself UK resident once again. After about two months UK.gov had accepted I was resident once again in every respect. I paid Council Tax, registered with a GP, saw that my state pension was brought up to the same level as anyone else and I registered to vote. I explained to DWP that I still intended to travel and expected to spend at least 6 months out of the country each year because I'd been doing that most of my life, DWP accepted that was my usual lifestyle and doesn't have a problem with it. I'd always had a UK bank account so that helped plus my private pension was always based there.

 

I also filed a UK tax return in the first year I was there and have continued to do so. I'm 70 years old so my earnings are quite low but I own my property in the UK and in Thailand, when I return to Thailand I rent my UK flat out using a local real estate agent to manage the let for at least 6 months each time. This year I will pay under 200 Pounds in UK tax which I could avoid by claiming not to be resident, for me that's not worth it. In 2018 I spent 2 months in the UK, last year I spent 4 months there, this year I may spend one month only.

 

I now have the option to live in either country for almost as long as I wish although I would need to renew my long stay visa in Thailand each year. I have used the NHS and and I see my GP once a year who prescribes medication for the period I am there only, the rest of the time I buy my own in Thailand....that's my choice, not the NHS's. 

 

Finally, I don't believe the Baht is overvalued by very much at present, perhaps 5% and no more. The longer term trend is for baht strengthening, not weakening so any investment you make in Baht today will benefit from exchange rate gains. I bought a condo here in 2004 using Pounds I bought over at 70, I sold when the Pound was near 50 so I really didn't care about the selling price that much. And when you make the calculation about profitability of renting versus buying, don't forget to add in the avoided cost of not renting because that's a big offset.