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Are There Any Tax Liabilities For Retirees In Thailand


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My UK financial adviser informs me that if I take more than the UK single person's tax allowance (which I'm not currently doing) and there is a double taxation agreement between the UK and Thailand, then the pension I get from Standard Life can be paid gross and I'd be subject to Thai taxation rules (which would possibly be to my advantage, but unsure).

 

I've done a Google search, and found this agreement document, but not read it yet as it's gone 1am: https://www.rd.go.th/english/770.html

 

Has anyone got any advice they'd like to share on this subject?

 

 

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Your tax liability in Thailand is to pay tax on money remitted into Thailand in the year in which you "earned" it,so I presume this would apply to your pension.

 

So have the money paid into your UK account and remit it to Thailand next year.

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7 minutes ago, LongTimeLurker said:

Your tax liability in Thailand is to pay tax on money remitted into Thailand in the year in which you "earned" it,so I presume this would apply to your pension.

 

So have the money paid into your UK account and remit it to Thailand next year.

Surely your Pension money was earned when you were working in the UK, possibly many years ago. So this scenario will not apply.

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On 9/18/2021 at 1:29 AM, JetsetBkk said:

I'd be subject to Thai taxation rules (which would possibly be to my advantage, but unsure).

You can check them out via this link:-

 

https://www.rd.go.th/english/6045.html

 

On 9/18/2021 at 1:29 AM, JetsetBkk said:

I've done a Google search, and found this agreement document, but not read it yet as it's gone 1am: https://www.rd.go.th/english/770.html

Also available via this UK government link:-

 

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

 

Edited by OJAS
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23 hours ago, KannikaP said:

Surely your Pension money was earned when you were working in the UK, possibly many years ago.

Many, many years ago! 🙂 

You pay tax on it when you earn it, and pay tax on it when you take it out of your pension pot.

Actually, I've been taking a lot out of the "Tax Free Lump Sum" part of the pot (25%), but there will come a time when that part runs out and I will want to increase  the "drawdown" part of the pension, which currently is small enough to keep me below the UK single person's tax allowance limit.

 

On 9/19/2021 at 10:06 AM, wordchild said:

The current Thailand/UK taxation agreement does not cover private pensions. 

Ah.

 

23 hours ago, LongTimeLurker said:

So have the money paid into your UK account and remit it to Thailand next year.

That's what I do currently. But not enough to incur tax. 

 

On 9/19/2021 at 10:06 AM, wordchild said:

best to get professional advice on this.

Definitely, but was hoping for some pointers, here.

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13 minutes ago, OJAS said:

Thank you very much for the links. I'm still digesting what they mean.

 

Your first link doesn't mention the word "pension" at all.

Your second link mentions "pension" three times" but looks like it applies to "services of a governmental nature" only, whatever that means:

 

pension.jpg.2d4957ab137552100a076b6cf694716d.jpg

 

 

I'll pass all this information on to my financial adviser and see what he makes of it.

 

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4 minutes ago, JetsetBkk said:

Thank you very much for the links. I'm still digesting what they mean.

 

Your first link doesn't mention the word "pension" at all.

Your second link mentions "pension" three times" but looks like it applies to "services of a governmental nature" only, whatever that means:

 

pension.jpg.2d4957ab137552100a076b6cf694716d.jpg

 

 

I'll pass all this information on to my financial adviser and see what he makes of it.

 

My understanding of Article 19 of the DTT is that it covers all public sector occupational pensions - e.g. Civil Service, local authority, NHS, police, military.

 

The following link might also be worth a read:-

 

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

 

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I have 3 UK pensions, all are received untaxed at my request into my UK bank.

 

Their combined value is above the UK personal tax allowance, so I do an annual tax return and pay monies due each tax year.

 

Pretty sure  this is the normal procedure.

 

 

Edited by Saltire
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20 minutes ago, Saltire said:

I have 3 UK pensions, all are received untaxed at my request into my UK bank.

 

Their combined value is above the UK personal tax allowance, so I do an annual tax return and pay monies due each tax year.

 

Pretty sure  this is the normal procedure.

 

 

Do you do a tax return in Thailand?

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15 minutes ago, Saltire said:

I have 3 UK pensions, all are received untaxed at my request into my UK bank.

 

Their combined value is above the UK personal tax allowance, so I do an annual tax return and pay monies due each tax year.

 

Pretty sure  this is the normal procedure.

That's probably what I'm going to have to do if/when I go over the single person's tax allowance.  I used to do a tax return every year in the UK, and always ended up with a small rebate. It was a real pain though, adding up all the interest on various accounts.

 

When I first retired here, I used to get £1,000 from "Winterthur Life" every year as a "test" pension - just to make sure it was working and they hadn't forgotten about me 🙂 . But they took out £220 tax for the first couple of years until I filled in a form - P85, I think. Then I got the full 1,000.

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5 hours ago, Neeranam said:

I've also been wondering about this. 

 

I am a Thai citizen but due a UK pension in 12 years. 

Oh, so young....  🙂

 

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7 hours ago, JetsetBkk said:

Thank you very much for the links. I'm still digesting what they mean.

 

Your first link doesn't mention the word "pension" at all.

Your second link mentions "pension" three times" but looks like it applies to "services of a governmental nature" only, whatever that means:

 

pension.jpg.2d4957ab137552100a076b6cf694716d.jpg

 

 

I'll pass all this information on to my financial adviser and see what he makes of it.

 

I think you need a new financial advisor, maybe someone who has some greater knowledge regarding UK/Thailand taxation issues 

Edited by wordchild
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32 minutes ago, wordchild said:

I think you need a new financial advisor, maybe someone who has some greater knowledge regarding UK/Thailand taxation issues 

I was wondering when someone would say that😄. I've lived here for nearly 20 years and seen my net worth increase by 50%, so I think he's doing alright.

I just want to get my hands on more of my money without paying tax.  🙂

 

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17 hours ago, Neeranam said:

Do you do a tax return in Thailand?

I have an accountant in Scotland, I send him all the info he needs, P60 etc and he submits. I sign electronically,''

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not all double taxation agreements are the same, some countries may have taxation agreements (with Thailand) that cover private pensions. The UK/Thailand agreement is pretty old (30 plus years) and they are supposed to be working on a new one. (But they have been saying that for several years and nothing has appeared.) I guess when the original agreement was drafted there were not many UK pensioners in Thailand, so the agreement simply does not cover private pensions. I believe it does cover Civil Service and Military pensions as quoted above.  so the UK revenue will   not approve private pensions paid directly , gross of tax ,to someone resident in Thailand. For UK retirees in  some countries eg (I believe) Australia it is possible to have private pensions paid without any (UK)  tax being withheld . But that is because the DTA between the UK and Australia covers private pensions.

     There are other options available to Thai expat residents to mitigate any local (Thai) tax liability,  eg as mentioned above holding current income outside Thailand until the following Thai tax year (Jan 1).

However i would think that it is extremely unlikely that you would ever be questioned by the Thai tax authorities about pension income which has already been taxed in the UK. Nevertheless,  there is a  risk of further (double) taxation in Thailand of pension income (from the UK) ,  because such income is not covered by the current UK/Thailand DTA.  I ,personally , have never heard of anyone having any issues with this. The risk is purely theoretical ,in my opinion

   

  

 

Edited by wordchild
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2 hours ago, JimHuaHin said:

I have a Thai friend from my university students days in the mid 1970s.  I met with him in Bangkok about a decade ago, before I moved here.  I asked him if he knew a good Thai tax accountant who could give me some basic advice on this issue.  The Thai tax accountant's advice was basially this  - open 3 accounts in my country (Australia) - have your pension paid into Account A; on the last day of September (end of the Thai fiscal year for personal tax payers) tranfer all the money in Account B into Account C, (2) and all the money in Account A into Account B, and use the money in Account C to send to Thailand.  That way, all the money in Account A has been received in the current Thai fiscal year; some of the money in Account B was received this fiscal year as well as the previous fiscal year, while all the money in Account C was recieved in previous financial years.  As long as the interest earned in Account C is less than Baht 150,000 per year. you need not pay tax.

Sounds like tax evasion to me. 

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Just remit funds from the UK when you need them here. Nobody is asking questions. Been doing it for decades and not been questioned once. If you earnt the money overseas and paid your taxes at the time, it's got nothing to do with the Thai inland revenue.. 

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28 minutes ago, Charlie Halliday said:

Just remit funds from the UK when you need them here. Nobody is asking questions. Been doing it for decades and not been questioned once. If you earnt the money overseas and paid your taxes at the time, it's got nothing to do with the Thai inland revenue.. 

It's getting the money out of a pension fund or investment fund in the UK without paying more tax in the UK - that's my problem. 

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4 minutes ago, JetsetBkk said:

It's getting the money out of a pension fund or investment fund in the UK without paying more tax in the UK - that's my problem. 

That was my problem, all I could do was minimise the tax over a longish period.

 

I took the 25% tax free lump sum from a SIPP and lived off of that for 3 years (in Cambodia).

 

After that I drewdown just enough each year, to live and keep close to the annual allowance. That worked for 7 more years until my pensions kicked in. Now I have no way of reducing my tax bill but as it's not much, I will live with it.

 

 

 

 

 

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7 minutes ago, LongTimeLurker said:

If it was earned when you paid the contributions why then do the UK government tax pensions when you receive them?

Because pension contributions are tax-free in UK, so you pay tax when you actually get the money.

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27 minutes ago, Saltire said:

That was my problem, all I could do was minimise the tax over a longish period.

 

I took the 25% tax free lump sum from a SIPP and lived off of that for 3 years (in Cambodia).

 

After that I drewdown just enough each year, to live and keep close to the annual allowance. That worked for 7 more years until my pensions kicked in. Now I have no way of reducing my tax bill but as it's not much, I will live with it.

Sounds exactly like I've been doing! I still have some of the 25% tax free lump sum left from my Standard Life SIPP. Fortunately, that lump sum keeps growing as the rest of the pension pot grows. I also have a tax free amount every year from a corporate bond that I bought: 5% can be taken out every year tax free. That bond has now grown by 35% over 18 years. I'd like to get my hands on that without incurring tax!

 

And I, too, drawdown just enough to keep my taxable income below the single person's allowance to avoid tax.  My UK pension also started a few years ago so I can't take a lot more as "drawdown" without incurring tax. 

 

If I want more, I suppose I'll just have to accept the tax bill, too. 

 

Edited by JetsetBkk
Added: "If I want more"
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