Proof of Tax Residency in Thailand (UK passport Holder)

[theoldgit]

16 minutes ago, thonglorjimmy said:

I think this may have been asked before, on my demise my wife is eligible for a widows pension of 50% of my Civil Service Pension, my State Pension will die with me.

I had assumed that even though she doesn't have a UK Passport, and it's unlikely that we'll ever return to the UK, she would still be entitled to the Personal Allowance to set against her widows pension, but I'm not sure and the HMRC will not give me a straight answer, but simply refer me to their website.
The tax saving by receiving the PA is around £2,500, so worth finding out.
Any ideas where I can get a definitive answer?
Thanks   

 

This seems to imply that she wouldn't be entitled to the Personal Allowance, though may be able to claim the tax on the PA annually, unless she qualifies under the double taxation rules - I'm really not sure though

Personal Allowance

You’ll get a Personal Allowance of tax-free UK income each year if any of the following apply:

• you hold a British passport
• you’re a citizen of a European Economic Area (EEA) country
• you’ve worked for the UK government at any time during that tax year

You might also get it if it’s included in the double-taxation agreement between the UK and the country you live in.

Claim the Personal Allowance

If you’re not a UK resident, you have to claim the Personal Allowance at the end of each tax year in which you have UK income. Send form R43 to HM Revenue and Customs (HMRC).

[sometimewoodworker]

29 minutes ago, thonglorjimmy said:

I think this may have been asked before, on my demise my wife is eligible for a widows pension of 50% of my Civil Service Pension, my State Pension will die with me.

I had assumed that even though she doesn't have a UK Passport, and it's unlikely that we'll ever return to the UK, she would still be entitled to the Personal Allowance to set against her widows pension, but I'm not sure and the HMRC will not give me a straight answer, but simply refer me to their website.
The tax saving by receiving the PA is around £2,500, so worth finding out.
Any ideas where I can get a definitive answer?
Thanks   

It is quite simple. 

• You hold a British passport
• You are a citizen of a European economic area (EEA*) country
• You have worked for the UK government at any time during that tax year

If your spouse doesn’t qualify as one as one of these then she must pay income tax on all money received.

 

There are very few pensions that don’t have this requirement they are not usual and very special.

Edited July 26, 2022 by sometimewoodworker

[Liverpool Lou]

15 hours ago, sometimewoodworker said:

16 hours ago, Liverpool Lou said:

Only if the pension exceeds the Personal Allowance. UK state pensions are taxable but are paid without tax being deducted

all U.K. income is taxable. 

That's not correct, not all UK income is taxable.

[userabcd]

Three questions were specifically asked by the OP.

 

1 - how to obtain the proof of tax residency

2 - how to get HMRC and pension providers to accept this and

3 - has anybody actually succeeded

Edited July 26, 2022 by userabcd

[sometimewoodworker]

28 minutes ago, Liverpool Lou said:

That's not correct, not all UK income is taxable.

Please give all U.K. income that is not taxable.

[thaibook]

bear in mind that if you are tax resident in Thailand your UK state pension will not be increased; it will be frozen at its current leve.  UK state pension increases are only given to those in the UK and those in a country with a social security agreement with the UK - Thailand does not have one.

 

If you are not UK resident for tax purposes you only pay tax in the UK for income earned in the UK.  So if you have investments in the UK or are paid a pension from a UK company you will likely have to pay UK tax on these.  Also as a non-resident you have to complete the residency form (SA09) on the annual tax return and this is only available on paper.  It can be downloaded but not sent in as a scanned document.  Also you will not be exempt from completing a tax retur each year.

 

Unless you are paying tax on foreign income in the UK, or only have the state pension, it may not be worth th eadditional administrative hassle and the loss of pension increases. 

[The Hammer2021]

23 hours ago, brobro2424 said:

If you are living full time in Thailand, you become uk-non-resident the moment you left UK. It is none of the UK's business where you are. Generally speaking if you don't live there and aren't using their government services, you should not be paying tax there.

 

Apply for an NT tax code via https://www.gov.uk/government/publications/income-tax-leaving-the-uk-getting-your-tax-right-p85

 

From what I've seen you will only successfully get a Thai tax code if you are actually going to start paying tax in Thailand. There is no need to do this. Thailand is not trying to tax foreigners on money coming from outside Thailand (in general).

 

I'm sure you will want more proof than just the above, but I'm trying to point you in the right direction. Its a grey area I've spent many hours looking into and have discussed with 5 or 6 international tax advisors, albeit not specifically pension-related. I'd be interested in replies to the contrary.

Nope. You pay tax on UK based income wherever you are in the world. You don't pay tax on non UK based income.

You over simplify the definition  of residence and non resident. It changed about 8 years ago  There is an online flow chart you can use, provided by the IR, to determine  your status.

[kinyara]

I hope it wasn't a registered financial advisor that informed the OP he wouldn't have to pay tax on his UK pensions. ( unless under his personal allowance ).

[AsiaCheese]

22 hours ago, sometimewoodworker said:

Incorrect information, just go down to the local area tax office (you will need a Thai speaker) you can get a taxi ID. 
If you have a bank savings account you are already paying tax and can get it back.

Actually no (at Jomtien tax office). I went there with a Thai person and we had a lengthy conversation with the person at the counter, explaining that my bank abroad "needed" my tax ID, and we were repeatedly told that unless I work here, it's a no-no.

In regard to a bank savings account and deduction of withholding tax: yes, I heard from various people over time that it's possible to get it back. I didn't bring it up at the tax office.

[khunPer]

On 7/25/2022 at 6:02 AM, foreverlomsak said:

Does anybody have any direct experience on this subject. The questions I have are

1 - how to obtain the proof of tax residency

2 - how to get HMRC and pension providers to accept this and

3 - has anybody actually succeeded

You need to register for income tax in Thailand and get a TIN (Tax Identification Number).

 

You need to put your "imported" retirement pension as income for Thai taxation on a P.R.D.90 Tax Return Form before March 1st. and pay eventual income tax. All personal income, including any income transferred from abroad, is due to be income taxed in Thailand if you stay in the nation more than 180 days of a calendar year.

 

You then need to apply for a R.O.22 "Certificate of Residence" (Tax Residence) and a R.O.21 "Income Tax Payment Certificate". They are valid only for the income year in your Tax Return Form, so you need to redo the procedure every calendar year.

????

[foreverlomsak]

24 minutes ago, kinyara said:

I hope it wasn't a registered financial advisor that informed the OP he wouldn't have to pay tax on his UK pensions. ( unless under his personal allowance ).

nope it was a friend who says he has multiple pension incomes and hasn't paid tax since he moved to Thailand as "non-residents do not pay UK tax"

[howerde]

Is it possible the money he is getting is coming from an ISA, no tax is taken from that resident or non resident, if non resident you can still get the money tax free but can not Save into one,

 

[topt]

2 hours ago, foreverlomsak said:

nope it was a friend who says he has multiple pension incomes and hasn't paid tax since he moved to Thailand as "non-residents do not pay UK tax"

Well I think the statement he made has been proven wrong as far as it goes. 

 

So in his case either he moved his pensions offshore at some point, they fall below the tax threshold or somehow he/his pension payments have fallen through the cracks..........

[nrasmussen]

2 hours ago, AsiaCheese said:

Actually no (at Jomtien tax office). I went there with a Thai person and we had a lengthy conversation with the person at the counter, explaining that my bank abroad "needed" my tax ID, and we were repeatedly told that unless I work here, it's a no-no.

In regard to a bank savings account and deduction of withholding tax: yes, I heard from various people over time that it's possible to get it back. I didn't bring it up at the tax office.

I had a similar experience at the regional tax office in Hat Yai.

 

I even had a letter in English from my home country bank stating that they required a Thai Tax Identification Number (TIN), but the answer was that if I was not due any tax in Thailand I could not get a TIN issued.

 

Later I found out that I could get withholding tax from my Thai bank refunded. So going back to the tax office armed with the appropriate document from the Thai bank I was finally able to obtain a TIN.

[thonglorjimmy]

On 7/26/2022 at 9:26 AM, sometimewoodworker said:

It is quite simple. 

• You hold a British passport
• You are a citizen of a European economic area (EEA*) country
• You have worked for the UK government at any time during that tax year

If your spouse doesn’t qualify as one as one of these then she must pay income tax on all money received.

 

There are very few pensions that don’t have this requirement they are not usual and very special.

Thanks, the old git posted similar information earlier, with additional parts of the website regarding the double taxation and claiming the personal allowance retrospectively.

 

I note you left that bit out, do you know if that would not apply in her case?

 

It seems to me that she would have to apply for the PA at the end of every tax year, at over 100,000 Baht it's not an insignificant amount to try and get back, I wonder how many widows lose out? 

[howerde]

This seems to answer the question

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

 

[OJAS]

On 7/27/2022 at 11:59 AM, thonglorjimmy said:

Thanks, the old git posted similar information earlier, with additional parts of the website regarding the double taxation and claiming the personal allowance retrospectively.

 

I note you left that bit out, do you know if that would not apply in her case?

 

It seems to me that she would have to apply for the PA at the end of every tax year, at over 100,000 Baht it's not an insignificant amount to try and get back, I wonder how many widows lose out? 

In particular, @sometimewoodworker has made no reference to what could IMHO potentially be this crucial quote by @theoldgit in both our cases:-

 

"You might also get it if it’s included in the double-taxation agreement between the UK and the country you live in."

 

Since your and my Civil Service pensions ARE included in the double taxation agreement between the UK and Thailand*, it follows, I think, that our respective spouses MIGHT be entitled to the Personal Allowance in due course but will need to claim it by submitting a completed form R43 to HMRC at the end of each tax year in which they receive widow's pension payments from CSP.

 

As to whether or not our respective spouses will definitely get the Personal Allowance in due course, I suspect that they'll probably only obtain a definitive answer one way or the other from HMRC after they have submitted their first R43 form (of hopefully many). Much water could, of course, flow under the bridge taxation-wise between now and then!  

 

*See Article 19 of this agreement viewable via the following link:-

 

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

 

[sometimewoodworker]

3 hours ago, OJAS said:

I think, that our respective spouses MIGHT be entitled to the Personal Allowance in due course but will need to claim it by submitting a completed form R43 to HMRC at the end of each tax year in which they receive widow's pension payments from CSP.

I reasonably certain that you have conflated a personal allowance (as a not British or  Commonwealth  and as a non European subject your wife has no personal allowance) with the dual taxation agreement. They are not the same.

 

The dual taxation agreement in it’s most simple case allows tax paid in one jurisdiction to be off set against a liability in another where there is also a tax liability.

 

If the DTA was not in place you would be liable to tax in the U.K. (where the income is paid) whilst also being liable to tax in Thailand where you actually receive the income. 

Due to the DTA any amount of tax due on the U.K. income is offset against any Thailand tax due. 
 

The U.K. personal allowance does not accrue to your wife. She doesn’t qualify. She has no tax free allowance in the U.K. she does have a Thai allowance. She is liable to pay 20% U.K. tax on all income.
 

I have no idea of the amount at which HMRC will decide that the amount of tax due (if any) is too small to collect. Neither do I know if HMRC will tax a widows benefit at source.

 

You really really need to get professional advice. I have done so and my finances are structured in a tax efficient way. 
 

I know of a widow who is lucky enough to have a family friend who is a solicitor but it is not simple for a Thai to navigate through the red tape, and that friend would rather not be involved in the long term.

 

I will be happy to be proved wrong by a tax professional, regrettably the tax code is far from simple.

 

TLDR

You have a U.K. personal allowance on income.

Your wife has no U.K. personal allowance on income.

The source of the income is irrelevant.

 

Edited July 30, 2022 by sometimewoodworker

[foreverlomsak]

3 minutes ago, sometimewoodworker said:

I will be happy to be proved wrong by a tax professional, regrettably the tax code is far from simple.

if it was simple we wouldn't need tax professionals, tax advisors or the thousands of civil servants employed by the government.

[THAI DEGITAL NOMAD]

THE SAME SITUATION

I am a Japanese and a nomad, and earn a foreign source income from Japan through online business.

but, I don't want to pay tax in Japan because Japan is the highest taxes in the world. So, I want to pay tax here, Thailand. Besides, I plan to live in Thailand for more than 180 days. If I live here for 180 days or more, not only Thai source income but also Thai foreign source income will be taxed if I bring money into Thailand. I can't live without bringing the money I earned to Thailand from Japan. In other words, it is taxed in Thailand to bring in income from Japan.

 

In that case, I must get a Tax ID. I could get it very very very easily within 10 minnutes. I went to Asoke Revenue and I said, I want to get a TAX ID because of opening an bank account. I got it. Next, I will pay tax here. Actually, I don't work in Thailand phsically, I don't take away Thai jobs. So, this is a really GRAY ZONE controversy, but Thai immigration doesn't concern about this issue. You also, can pay tax here. I don't know what foreigners in Europe think, but Japanese Nomads with many Thailand elite visas pay taxes in Thailand.We are also told by the secretariat of Thailand Elite in Japan. a person in executive office in Japan said, you can get a TAX ID in Thailand and pay taxes if you want to pay a Japan source income and bring money into Thailand. So, we, Japanese willing to pay tax here.

Edited July 31, 2022 by THAI DEGITAL NOMAD

[sometimewoodworker]

15 minutes ago, THAI DEGITAL NOMAD said:

THE SAME SITUATION

I am a Japanese and a nomad, and earn a foreign source income from Japan through online business.

but, I don't want to pay tax in Japan because Japan is the highest taxes in the world. So, I want to pay tax here, Thailand. In that case, I must get a Tax ID. I can get it very very very easily within 10 minnutes. I go to Asoke Revenue and I said, I want to get a TAX ID because of opening an bank account. I got it. Next, I will pay tax here. Actually, I don't work in Thailand phsically, I don't take away Thai jobs. So, this is a really GRAY ZONE controversy, but Thai immigration doesn't concern about this issue. You also, can pay tax here. 

Regrettably the Japanese tax system does not allow for you to be taxed in Thailand rather than Japan for income earned in Japan. 
 

You may well be able to evade Japanese tax but it will not be legal. The Japanese tax system is progressively being tightened and has been more and more strict in the last 10~12 years, much more so than in the preceding 20 years. It is likely to be progressively more and more difficult to evade liability.

 

Of course the Thai tax authorities will be happy for you to pay tax, but that doesn’t stop your Japanese tax liability.

 

FWIW you are wrong about the level of taxation in Japan, it is broadly similar to the U.K. tax rate. Having been both a Japanese taxpayer (for over 30 years) and a U.K. tax payer I have intimate knowledge of both systems.

 

 

[Crossy]

I would certainly talk to a Thai accountant who is knowledgeable in international tax law before actually paying any Thai tax, particularly if you're not actually working here. If I understand correctly overseas income is only taxable if it is imported in the year it's earned, so spend "last years" money ???? (it's likely not that simple, hence talk to an accountant)

 

There's no point in paying more tax than absolutely necessary.

 

For many years I was employed by a Hong Kong company, paid in USD out of HK into my Jersey bank account. I dutifully filled out my HK tax return every year, but because I wasn't actually resident in HK tax payable was zero ???? 

 

Of course since I was "paying" tax in HK nobody else was interested in taxing my income ???? Sadly that route became impassable due to more and more company income being derived within Thailand, so now I'm in the Thai 40% tax bracket ???? It was good whilst it lasted.

[sometimewoodworker]

11 minutes ago, Crossy said:

I would certainly talk to a Thai accountant who is knowledgeable in international tax law before actually paying any Thai tax, particularly if you're not actually working here. If I understand correctly overseas income is only taxable if it is imported in the year it's earned, so spend "last years" money ???? (it's likely not that simple, hence talk to an accountant)

Absolutely correct. I have also managed to reduce my tax liability, unfortunately my income is very much less than yours so I don’t have the amount of income to pay tax on but I still manage to reduce the income that is taxable in Thailand.

 

I also understand that the concept of not actually paying tax on income not earned in this tax year outside Thailand and so not imported this year is likely correct.

[BonMot]

Why don't you just go get a tax card? Send them that ..your taxis card and #.

[foreverlomsak]

2 hours ago, THAI DEGITAL NOMAD said:

You also, can pay tax here.

Yes, I can pay tax here on my pension income, but it will be in addition to the taxes levied by the UK (all income from UK sources is subject to UK tax levied at source i.e. PAYE, Pay As You Earn).

The Double Taxation Agreement between the UK and Thailand only allows for UK tax relief on Civil Service pensions if your taxed twice, and has to be claimed back at the end of every tax year. Confusing as Thai tax year is 1 January to 31 December, UK tax year is 6 April to 5 April.

[foreverlomsak]

2 hours ago, BonMot said:

Why don't you just go get a tax card? Send them that ..your taxis card and #.

a Thai tax card will mean zip to Her Majesties Revenue and Customs (HRMC) as all income in the UK is subject to UK tax, what you do with it after that is your concern and nothing to interest the tax part of HRMC.

[sometimewoodworker]

3 hours ago, foreverlomsak said:

(all income from UK sources is subject to UK tax levied at source i.e. PAYE, Pay As You Earn).

That is not correct for all U.K. taxpayers. 

I for one are not taxed at source. I am not taxed under the PAYE system. I have not been under the PAYE system for the last 30 years or so. 

You are correct that virtually all U.K. income is taxable.

 

I think that there maybe some very special, rather unusual legacy pensions that may be exempt from the general rule of all U.K.  income being taxable but you can be sure that you will know if this applies to you

[foreverlomsak]

51 minutes ago, sometimewoodworker said:

I for one are not taxed at source. I am not taxed under the PAYE system. I have not been under the PAYE system for the last 30 years or so. 

if you are paid by pension providers in the UK and your total income is over 12,750 GBP, I'm sorry to tell you, you are, you just don't know it

[sometimewoodworker]

10 hours ago, foreverlomsak said:

if you are paid by pension providers in the UK and your total income is over 12,750 GBP, I'm sorry to tell you, you are, you just don't know it

You are talking rubbish. You may be taxed under the PAYE system. I am not and have not been since 1990.
 

I am well aware of how I am taxed, as is my accountant, along with the exact amounts of tax due and when I pay it. Parts of my income are pension, parts are not. None of my pension or any other income is taxed under PAYE

 

Do stop imagining that because you are taxed in one way that that means that others must also be taxed in the same way. That is a rather parochial and blinkered viewpoint.

Edited August 1, 2022 by sometimewoodworker

[foreverlomsak]

2 hours ago, sometimewoodworker said:

You are talking rubbish. You may be taxed under the PAYE system. I am not and have not been since 1990.

Thanks for the correction, I was thinking too much about pension incomes only and ignoring other incomes which would not come under PAYE.

Apologies if I upset you too much.