Tax on UK pension

[sandyf]

On 6/28/2021 at 4:01 PM, Orinoco said:

you do not need a uk number for OTP, a Thai number is fine.

Why would; you have a uk number when you live in Thailand ?

I will take your word on that, never tried to use a Thai number. But also goes against the view that online cannot be used abroad.

Why I have a UK number is a personal choice.

[bradiston]

28 minutes ago, sandyf said:

I will take your word on that, never tried to use a Thai number. But also goes against the view that online cannot be used abroad.

Why I have a UK number is a personal choice.

I can verify you do not need a UK number with HMRC. They will send an OTP to a Thai number. But with some UK banks you do need a UK one. I've got a Lycos SIM in a dual SIM phone. Alternatively, most allow you to use a card and card reader.

[Oxx]

57 minutes ago, bradiston said:

I can verify you do not need a UK number with HMRC. They will send an OTP to a Thai number.

 

Technically true, but in my experience the OTP rarely arrives here on a Thai number.  But then, maybe I've just been unlucky.

[Orinoco]

55 minutes ago, Oxx said:

 

Technically true, but in my experience the OTP rarely arrives here on a Thai number.  But then, maybe I've just been unlucky.

Using AIS, never had a problem for HMRC. OTP code.

But Santander bank in jersey, was an issue, when they first went over to OTP code early last year, i did talk to them about this and they said some networks are experiencing an issue with this.

but they fixed the problem, all fine a few weeks latter, but can only speak for AIS network.

 

 

Edited June 30, 2021 by Orinoco

[bradiston]

11 hours ago, Oxx said:

 

Technically true, but in my experience the OTP rarely arrives here on a Thai number.  But then, maybe I've just been unlucky.

I initially had a really frustrating time too, never seeming to get the OTP. I discovered that, although I had Messenger set as my default messaging app, all the SMS from banks and HMRC were going to my Samsung messaging app. This problem appears to have been fixed now, but it's odd, I still get SMS sent to the Samsung app only so it's always worth checking your phone's messaging app.

[sandyf]

22 hours ago, bradiston said:

I can verify you do not need a UK number with HMRC. They will send an OTP to a Thai number. But with some UK banks you do need a UK one. I've got a Lycos SIM in a dual SIM phone. Alternatively, most allow you to use a card and card reader.

I am with HSBC and they use a digipad for online banking but they are looking to introduce OTP by phone on credit card transactions and have warned customers to make sure numbers are up to date on the account.

 

I think it would be difficult to get a card from Wise without a phone for a country that they do cards for. Their registration process is a right pain, done by smartphone and involves taking a selfie and a live photo of your passport. I nearly got rejected because I found it difficult to deal with the lag on the webcam software they used(iVcam).

[JimGant]

On 6/27/2021 at 1:53 PM, Andy1961 said:

HMRC told me if I get the Double Taxation Agreement completed by the Thai authority (which I accept could be a mammoth task) they will provide my private pension provider with a zero tax code. 

I find that suspect. First, the DTA between UK and Thailand doesn't mention the status of private pensions (only gov't ones). This is weird, since most other tax treaties do comment on private pensions and other non gov't income.. Anyway, what would Thai tax authorities possibly say in regards to the tax treaty......? They certainly can't claim that the treaty gives them priority taxation on private pensions.... 'cause it's silent on this matter.

 

So, without guidance in the tax treaty, you would have to fall back on Thai tax laws, which say: residents of Thailand (180 days plus) have to pay Thai tax on incomes brought into Thailand in the year received. But Thai tax authorities today have no way to enforce this, thus so far haven't. This would be particularly true if you're filtering your pension through a home country bank account, where it's only identifier would be that's it's a foreign transfer, meaning it could be anything -- savings, whatever. However, the OP has a direct deposit of his pension into Thailand; so someday soon, with all this increased worldwide sharing of financial information, Thailand tax authorities just might decide it's doable -- and profitable -- to finally enforce its tax laws. Stay tuned.

 

If HMRC was smart, they'd adopt what the Norwegians do:

 

Quote

Persons who can document that they are resident in Thailand under the tax treaty between Norway and Thailand are entitled to tax exemption for pensions, disability benefits from the National Insurance Scheme and disability benefits from annuities if they can document that the pension/disability benefit is taxed in Thailand.

https://www.skatteetaten.no/en/person/taxes/get-the-taxes-right/employment-benefits-and-pensions/pension-and-disability-benefit/resident-abroad/countries/thailand/

 

In other words, you need to file a Thai tax return showing you paid Thai taxes on those Norwegian pensions -- if you want to get credit against your Norwegian taxes. Of course, it those Thai taxes exceed 15% (the Norwegian flat withholding rate), you may not want to send your pension to Thailand in year earned...

 

For the OP, don't know what to tell you to ask Thai tax authorities for to send to the HMRC -- gotta guess you'll get a shoulder shrug. Thus, guess you'll be paying taxes either in Thailand (maybe,i if they catch on to your direct deposit), or in the UK, with the latter definitely granting a credit for any Thai taxes, per the treaty:

 

Quote

Thai tax payable under the laws of Thailand .... shall be allowed as a credit against any United Kingdom tax computed by reference to the same profits, income or chargeable gains by reference to which the Thai tax is computed.

 

Good luck.

[OJAS]

On 6/27/2021 at 1:55 PM, Oxx said:

 

Assuming you're resident in Thailand, yes you are.  Hector in his infinite wisdom has decided not to make the "non-resident" pages of the tax return available on-line (even though non-residents are one of the groups that would benefit from being able to submit on-line).

As a non-resident, it's not optional to submit these pages, so you either have to make a paper return, or purchase software that covers the non-resident pages.

 

So what are HMRC likely to do if you, as a non-UK tax resident, file an online tax return excluding non-residency supplementary software? Answer, absolutely nothing based on the experiences of a fellow ASEAN NOW member who has been filing standard online returns as a non-UK tax resident for a number of years now (and presumably also @Surelynotwho, incidentally, is not the member I had in mind). The lion’s share of his income, like mine, is derived from a Civil Service occupational pension and rent on a UK property, which are both covered by the UK/Thailand Double Taxation Agreement (DTA). We are also both in receipt of the State Pension which, as already noted, is not covered by the DTA.

 

Accordingly I have now followed in his footsteps by submitting a standard online return for the first time. As I see things our failure to declare our non-residency status could only have potentially problematical consequences if 1 or other of 2 situations were to arise:-

 

(1) The Thailand Revenue Department (RD) were to start demanding tax payments on our State Pensions, which we would presumably be unable to recover from HMRC as a result of not declaring our non-residency status. However, I have calculated that the tax which I would be paying on my State Pension under the Thai taxation system would amount to around £160 per annum, so for the sake of a relatively quiet life I might be inclined to swallow a bitter pill and accept being taxed twice in the case of my State Pension. In any event, I gather that the process of recovering tax payments from HMRC to avoid double taxation is a bureaucratic nightmare even for those who have declared their non-residency status.

 

(2) HM Treasury were to revive a proposal made in 2014 to restrict non-residents’ entitlement to the personal tax allowance. Thankfully this proposal was, in the event, booted into the long grass, so, hopefully, will never see the light of day again. If it were ever to be revived, however, this would clearly be a bridge which would need to be crossed in due course. But this is not IMHO something which needs to be worried about at this stage.

 

Since the lion’s share of my income is covered by the DTA, it strikes me that the issue of non-UK tax residency is, in any case, largely irrelevant in practice as far as I am concerned. However, it is, of course, potentially far more significant for those whose principal source of income is a private sector occupational pension which is not covered by the DTA.

Edited July 4, 2021 by OJAS

[bradiston]

54 minutes ago, OJAS said:

 

So what are HMRC likely to do if you, as a non-UK tax resident, file an online tax return excluding non-residency supplementary software? Answer, absolutely nothing based on the experiences of a fellow ASEAN NOW member who has been filing standard online returns as a non-UK tax resident for a number of years now (and presumably also @Surelynotwho, incidentally, is not the member I had in mind). The lion’s share of his income, like mine, is derived from a Civil Service occupational pension and rent on a UK property, which are both covered by the UK/Thailand Double Taxation Agreement (DTA). We are also both in receipt of the State Pension which, as already noted, is not covered by the DTA.

 

Accordingly I have now followed in his footsteps by submitting a standard online return for the first time. As I see things our failure to declare our non-residency status could only have potentially problematical consequences if 1 or other of 2 situations were to arise:-

 

(1) The Thailand Revenue Department (RD) were to start demanding tax payments on our State Pensions, which we would presumably be unable to recover from HMRC as a result of not declaring our non-residency status. However, I have calculated that the tax which I would be paying on my State Pension under the Thai taxation system would amount to around £160 per annum, so for the sake of a relatively quiet life I might be inclined to swallow a bitter pill and accept being taxed twice in the case of my State Pension. In any event, I gather that the process of recovering tax payments from HMRC to avoid double taxation is a bureaucratic nightmare even for those who have declared their non-residency status.

 

(2) HM Treasury were to revive a proposal made in 2014 to restrict non-residents’ entitlement to the personal tax allowance. Thankfully this proposal was, in the event, booted into the long grass, so, hopefully, will never see the light of day again. If it were ever to be revived, however, this would clearly be a bridge which would need to be crossed in due course. But this is not IMHO something which needs to be worried about at this stage.

 

Since the lion’s share of my income is covered by the DTA, it strikes me that the issue of non-UK tax residency is, in any case, largely irrelevant in practice as far as I am concerned. However, it is, of course, potentially far more significant for those whose principal source of income is a private sector occupational pension which is not covered by the DTA.

It's also of huge relevance in calculating CGT if you sell a property in the UK while non resident. There is a set of rules which are of great benefit to non residents for calculating CGT. Anyone selling UK property while non resident in the UK should check them out. There is also an online "calculator" for residency status which is extremely useful.

[OJAS]

On 6/28/2021 at 4:01 PM, Orinoco said:

you do not need a uk number for OTP, a Thai number is fine.

Why would; you have a uk number when you live in Thailand ?

 

On 6/30/2021 at 4:35 PM, sandyf said:

I will take your word on that, never tried to use a Thai number. But also goes against the view that online cannot be used abroad.

Why I have a UK number is a personal choice.

 

On 6/30/2021 at 5:16 PM, bradiston said:

I can verify you do not need a UK number with HMRC. They will send an OTP to a Thai number. But with some UK banks you do need a UK one. I've got a Lycos SIM in a dual SIM phone. Alternatively, most allow you to use a card and card reader.

 

It is also possible to access one's Govt Gateway account through a 6-digit code on the HMRC app which changes every 30 seconds. That's how I access the Gateway these days after experiencing difficulties in getting a code sent to my Thai mobile number.

Edited July 5, 2021 by OJAS

[OJAS]

11 hours ago, bradiston said:

It's also of huge relevance in calculating CGT if you sell a property in the UK while non resident. There is a set of rules which are of great benefit to non residents for calculating CGT. Anyone selling UK property while non resident in the UK should check them out. There is also an online "calculator" for residency status which is extremely useful.

Thanks - will definitely bear this in mind when and if I decide to sell my UK property.

 

Incidentally I've now tracked down the 2014 consultation exercise to which I referred previously. Looks like HMG's intention was never to deprive overseas pensioners' entitlement to the personal allowance in the first place!

 

https://www.gov.uk/government/consultations/restricting-non-residents-entitlement-to-the-uk-personal-allowance/restricting-non-residents-entitlement-to-the-uk-personal-allowance

 

[maxcorrigan]

On 6/27/2021 at 11:30 AM, spornb said:

As a retired UK Chartered Accountant having lived in Thailand over 12 yrs, I comment as follows

 

Pensions received in thailand are not taxable in Thailand

 

Pensions paid to people living here are not eligible for the annual increase

 

As regards the UK whether resident there or not, all income including pensions, dividends, interest, rental income etc,  above the tax free allowance is subject to tax generally being deducted by the UK Pensions office, and other pension companies paying from the UK at source

 

Thailand generally is a very tax friendly country to retired people

 

Five years ago I agreed with no assets in the UK, and my pension below the personal allowance, I no longer have to file any tax returns unless my position changes

Maybe you can answer my query then, as you seem quite knowledgeable, pensions from DWP are taxed at source, but what i've read on TVF is the tax deducted assumes you get the yearly increase paltry that it might be, but would mount up after a few years in LOS, would you know if this is true, ie are you taxed as though you have received the annual increases? 

Just to try and clarify I receive a local pension LPFA which does get the yearly increase, as well as the DWP pension!

[sandyf]

On 7/5/2021 at 10:37 AM, OJAS said:

It is also possible to access one's Govt Gateway account through a 6-digit code on the HMRC app which changes every 30 seconds. That's how I access the Gateway these days after experiencing difficulties in getting a code sent to my Thai mobile number.

I have had my Government Gateway for nearly 20 years, done through the post then, so probably some changes I am not aware of.

I don't use apps generally, fingers are too fat and make too many mistakes. Tried on of them pens but kept bringing up the wrong character, so no improvement.

[spornb]

On 7/5/2021 at 2:06 PM, maxcorrigan said:

Maybe you can answer my query then, as you seem quite knowledgeable, pensions from DWP are taxed at source, but what i've read on TVF is the tax deducted assumes you get the yearly increase paltry that it might be, but would mount up after a few years in LOS, would you know if this is true, ie are you taxed as though you have received the annual increases? 

Just to try and clarify I receive a local pension LPFA which does get the yearly increase, as well as the DWP pension!

All taxation at source done on estimates, I think I get the max UK pension, and pay no tax, also am no longer required to file a tax return

Whilst working in UK all tax deducted is done based on tax code, and if wrong will be adjusted when final tax return done, during year can also request tax code be amended

 

If you think your tax is too much or incorrect contact the UK tax authorities

 

There are many ex UK residents, using accommodation addresses in UK so as to get increases, and of course they are afraid to contact the UK revenue, as receiving the increases when outside the UK and living in Thailand, is blatant FRAUD

The fact the increase is paid automatically is no defense

 

If you have been getting the increases incorrectly my advice is clean up your act , by telling UK pensions office you are effective next month resident here in Thailand, and you may well keep what you have already had and be safer than being caught later, catching tax evaders and cheats improves every day

[Andy1961]

Hi all, OP here.   A quick update on my original query re not paying UK tax.  I sent the relevant form to HMRC in early September last year and they finally got to deal with it on 29 April.  Wonderful service ????   But...a very small box on the form needed to be completed by my local tax office here in Thailand and the very nice lady there would not do that.  She registered me for tax and gave me a card but of course HMRC would not accept that, even though I had it translated for them.  They told me the Thai tax authority DOES stamp/sign these forms as they deal with them many times.  So now I will visit the Pattaya tax office who I hope have more experience in dealing with us farangs.

[scubascuba3]

On 6/30/2021 at 4:35 PM, sandyf said:

I will take your word on that, never tried to use a Thai number. But also goes against the view that online cannot be used abroad.

Why I have a UK number is a personal choice.

Just looked at the original post, so you are planning to get taxed on your Canada Life pension in Thailand rather than UK? that's what DTR is about

[topt]

7 hours ago, scubascuba3 said:

Just looked at the original post, so you are planning to get taxed on your Canada Life pension in Thailand rather than UK? that's what DTR is about

Except as @Oxx pointed out and has been mentioned many times before according to the DTA digest "private" pensions are not included in the scope of the UK/Thai DTA. So I will be intrigued to hear what actually happens with @Andy1961 request for such from HMRC

 

 https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/710099/DT_Digest_April_2018.pdf

Page 34

 

Quote

4. Treaty does not include an article dealing with DT-Company Non-Government pensions. Also, no relief for State Pension or ‘trivial commutation lump sum’

 

[sandyf]

8 hours ago, scubascuba3 said:

Just looked at the original post, so you are planning to get taxed on your Canada Life pension in Thailand rather than UK? that's what DTR is about

You have lost me, I do not have a Canada Life pension.

[topt]

On 7/4/2021 at 9:51 PM, OJAS said:

So what are HMRC likely to do if you, as a non-UK tax resident, file an online tax return excluding non-residency supplementary software? Answer, absolutely nothing based on the experiences of a fellow ASEAN NOW member who has been filing standard online returns as a non-UK tax resident for a number of years now (and presumably also @Surelynotwho, incidentally, is not the member I had in mind). The lion’s share of his income, like mine, is derived from a Civil Service occupational pension and rent on a UK property, which are both covered by the UK/Thailand Double Taxation Agreement (DTA).

I know this is old but since the thread has been resurrected I am curious here -

Quote

who has been filing standard online returns as a non-UK tax resident for a number of years now

Quote

and rent on a UK property, which are both covered by the UK/Thailand Double Taxation Agreement (DTA).

Firstly my understanding is unless you are using paid for software you cannot complete SA105 (property rental pages) on the "standard" online return - unless you are putting the income down as something else on the SA100 or whatever it is? If using paid for software than I would suggest it is not s standard online return and is potentially somewhat misleading to others.....

 

Secondly are you certain this is covered under the DTA? As per my reference 2 posts above above it does not seem to be and my understanding has always been that as an individual it has to be paid in the UK?

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

[scubascuba3]

3 minutes ago, sandyf said:

You have lost me, I do not have a Canada Life pension.

It lost me too, it was meant to quote Andy1961 latest post, not sure what happened, ignore it

[topt]

Deleted

Edited April 30, 2022 by topt

[sandyf]

6 minutes ago, scubascuba3 said:

It lost me too, it was meant to quote Andy1961 latest post, not sure what happened, ignore it

No problem, I have had that happen, bit puzzling.

[topt]

16 minutes ago, topt said:

Secondly are you certain this is covered under the DTA? As per my reference 2 posts above above it does not seem to be and my understanding has always been that as an individual it has to be paid in the UK?

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

Follow up @OJAS see page 12 Article 7.........

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/507424/uk-thailand-dtc180281_-_in_force.pdf

[dcollins]

On 4/30/2022 at 8:37 AM, topt said:

Firstly my understanding is unless you are using paid for software you cannot complete SA105 (property rental pages) on the "standard" online return

I think it's the non-residency bit you can't do via the portal. I as I read the post from last year, it's just saying that if your residency status doesn't affect the amount of UK tax you pay, then in practice HMRC don't care if you don't bother filling in that section of the return.

 

I don't think there's any conflict between the material you linked to and the original statement that the rent is covered by the DTA. Under the DTA this income is taxable in the UK only, so the landlord can't avoid UK tax on it by declaring that they're non-resident (which is why HMRC don't care if you don't fill in the residency section) and the Thai authorities aren't going to be interested because they can't tax it anyway.

[The Hammer2021]

On 6/26/2021 at 2:04 PM, Saltire said:

Don't know how I did it but I have a UK pension and 2 private ones all paid to my UK bank untaxed..

 

Last year they were under the UK personal allowance so I paid no tax. Next year however they will be more and I will have to pay UK tax, but not much.

 

I use a UK accountant to do my returns as it's easier from here and HMRC does not let you do an online self assessment if you are non resident, although for those who are not in the non UK resident category, probably could get away with self assess.

 

I have never earned anything in Thailand so have no dealings with Thai tax authorities at all.

 

 

'I have never earned anything in Thailand so have no dealings with Thai tax authorities at all.'

Unfortunately not true.

Annual Income dribbling into your Thai account is taxable by the Thai authorities.