Are There Any Tax Liabilities For Retirees In Thailand

[LongTimeLurker]

4 minutes ago, KannikaP said:

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

So it's taxed as income when you receive it.

[JetsetBkk]

4 minutes ago, KannikaP said:

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

That's about the most concise way I've heard that explained! Thanks. 

 

I used to have Free Standing Additional Voluntary Contributions (FSAVCs) to a pension scheme. I paid in £6,000 and the lovely UK govt. added £4,000 to the scheme because I was a 40% tax payer. Easy money!

[KannikaP]

24 minutes ago, JetsetBkk said:

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!

If it is tax-free, you should be able to get your hands on it without incurring tax, no?

 

And 35% in 18 years is less than 2% a year, not even keeping up with inflation..

Edited September 21, 2021 by KannikaP

[JetsetBkk]

7 minutes ago, KannikaP said:

If it is tax-free, you should be able to get your hands on it without incurring tax, no?

Only 5% can be withdrawn every year, tax free. That was one of the best investments I made, thanks to my financial adviser. It's worth nearly £10,000 tax free per year. And it's still growing!

 

Here's a link I just found to it - Clerical Medical International bond, now called "RL360":

 

https://www.harrisonbrook.co.uk/clerical-medical-bond/

 

 

Edited September 21, 2021 by JetsetBkk
Added: And it's still growing! and a link.

[KannikaP]

2 minutes ago, JetsetBkk said:

Only 5% can be withdrawn every year, tax free. That was one of the best investments I made, thanks to my financial adviser. It's worth nearly £10,000 tax free per year.

So you can have £10,000 plus the allowance of £12570 per year tax-free. Not too bad.

[KannikaP]

16 minutes ago, JetsetBkk said:

Only 5% can be withdrawn every year, tax free. That was one of the best investments I made, thanks to my financial adviser. It's worth nearly £10,000 tax free per year. And it's still growing!

 

Here's a link I just found to it - Clerical Medical International bond, now called "RL360":

 

https://www.harrisonbrook.co.uk/clerical-medical-bond/

 

 

As I added to my previous post, 35% in 18 years isn't even keeping up with inflation. There are better places for £200k. How much did/does your IFA make from it?

Edited September 21, 2021 by KannikaP

[chilly07]

23 hours 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.

 

 

In my case I pay UK tax on all my UK pensions before they are paid into my UK account so under the double tax agreement with Thailand I don't pay Thai tax. I did discuss Qrops with my UK financial advisor which involves transferring private pensions to say Australia or an off shore bank and then getting them paid gross into my Thai bank net of Thai tax which is at a lower rate and it is here that transferring in the following year that it is earnt comes in  but I believe this applies to earnt income not pensions. I decided I was risk adverse and opted for taxing in the UK as I didn't fancy arguing the point with Thai Revenue. Qrops also allows for the entire pension fund to be bequeathed to my wife so a tax/ financial advisor can assist if you have a risk appetite. 

[JetsetBkk]

6 minutes ago, KannikaP said:

As I added to my previous post, 35% in 18 years isn't even keeping up with inflation. There are better places for £200k. How much did/does your IFA make from it?

He makes 0.5%. 

[KannikaP]

4 minutes ago, chilly07 said:

In my case I pay UK tax on all my UK pensions before they are paid into my UK account so under the double tax agreement with Thailand I don't pay Thai tax. I did discuss Qrops with my UK financial advisor which involves transferring private pensions to say Australia or an off shore bank and then getting them paid gross into my Thai bank net of Thai tax which is at a lower rate and it is here that transferring in the following year that it is earnt comes in  but I believe this applies to earnt income not pensions. I decided I was risk adverse and opted for taxing in the UK as I didn't fancy arguing the point with Thai Revenue. Qrops also allows for the entire pension fund to be bequeathed to my wife so a tax/ financial advisor can assist if you have a risk appetite. 

I was advised to go the QROPS (Isle of Man) route with my private pensions. Very expensive to set up, my IFA made over 6% in the first instance, and ongoing charges are disgusting. Some places are now banned by UK Govt.

[itsari]

55 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?

Norway taxes all pensions paid out of the country by 15 percent . If the country  is a double taxation country like thailand then you can pay the tax here in Thailand and not pay the 15 percent to Norway . I would save about 5 percent by paying Thailand the tax rather than Norway . 

[Saltire]

13 minutes ago, chilly07 said:

In my case I pay UK tax on all my UK pensions before they are paid into my UK account so under the double tax agreement with Thailand I don't pay Thai tax. I did discuss Qrops with my UK financial advisor which involves transferring private pensions to say Australia or an off shore bank and then getting them paid gross into my Thai bank net of Thai tax which is at a lower rate and it is here that transferring in the following year that it is earnt comes in  but I believe this applies to earnt income not pensions. I decided I was risk adverse and opted for taxing in the UK as I didn't fancy arguing the point with Thai Revenue. Qrops also allows for the entire pension fund to be bequeathed to my wife so a tax/ financial advisor can assist if you have a risk appetite. 

My FA made a blunder one year and I paid way too much tax. The rigmarole I had to go through to claim it back took about 3 months so I now avoid claiming a rebate, easier just to pay money owed online once a year.

 

I too considered QROPS but I too passed on that one. I felt it was too risky and to be honest didn't fully understand it. I like a simple life!

[JetsetBkk]

6 minutes ago, KannikaP said:

I was advised to go the QROPS (Isle of Man) route with my private pensions. Very expensive to set up, my IFA made over 6% in the first instance, and ongoing charges are disgusting. Some places are now banned by UK Govt.

I looked into QROPS, but didn't think its benefits - passing it to family members on my death, no inheritance tax - didn't necessarily suit me. I'll have another look at it in a few years.

 

1 minute ago, itsari said:

Norway taxes all pensions paid out of the country by 15 percent . If the country  is a double taxation country like thailand then you can pay the tax here in Thailand and not pay the 15 percent to Norway . I would save about 5 percent by paying Thailand the tax rather than Norway . 

I believe a Norwegian friend of mine does that, but his English is so bad I can never really understand precisely what he says. (I hope he isn't you... ????)

[itsari]

1 minute ago, JetsetBkk said:

I looked into QROPS, but didn't think its benefits - passing it to family members on my death, no inheritance tax - didn't necessarily suit me. I'll have another look at it in a few years.

 

I believe a Norwegian friend of mine does that, but his English is so bad I can never really understand precisely what he says. (I hope he isn't you... ????)

Nope, I have no friends so you are  safe.

Many statements about taxation on pensions here today that just don't add up . 

That is why I put in my kroners worth . 

[rickudon]

As i understand it, income tax is levied on pensions in the UK on the 'arising basis' i.e. if your pension is from a UK based pension fund it is taxed at source (i.e. UK). So anything over the tax free allowance is taxed. Mine certainly is. So the only way of avoiding this is to either offshore your pension or put some of the money into certain tax free investments (e.g. Isa's). 

As for remitting money to Thailand, if the money was not earned in that tax year, it is free of tax. In reality there is no way for them to find out if your money was earned in that tax year, unless you give them access to your bank accounts. That is why foreign retirees do not pay Thai income tax on money brought into the country. In theory yes there is a liability, but in practice no. I'm sure there will be someone who pays, but i do not anyone who pays Thai income tax other than those who work in Thailand or on interest on Thai savings accounts (which is usually refundable).

[JetsetBkk]

11 hours ago, KannikaP said:

If it is tax-free, you should be able to get your hands on it without incurring tax, no?

 

And 35% in 18 years is less than 2% a year, not even keeping up with inflation..

To be fair, I have been taking %5 out - about £10,000 - every year for the last 18 years (=90% in total), and its value has gone up by 45%.

So I don't think it has been falling behind inflation. ????

 

Edited September 21, 2021 by JetsetBkk

[kiwikeith]

On 9/19/2021 at 3:06 PM, wordchild said:

The current Thailand/UK taxation agreement does not cover private pensions. I think you will find that you cannot have your pension paid gross of tax if you are resident in Thailand.

there maybe other types of tax planning that you could take advantage of, but best to get professional advice on this.

 

NZ pension when taken in Los isn't taxed, they say you might have to pay taxes on it in Thailand 

I don't know anyone that worries about that on the Los side