Resident in Thailand but paying UK tax on UK assets

[RandolphGB]

Is it possible to live in Thailand and be resident here, paying tax to the Thai government from employment in Thailand.... but hold assets in the UK such as shares, and pay Capital Gains Tax and dividend tax on that UK income, to the UK government without being resident in the UK?

 

 

 

[nigelforbes]

Yes, many people do. There is a tax treaty between the two countries so you wont be taxed twice. I live in Thailand and may tax here on income but also file a UK return and pay tax on investments and property rental.

[CharlieKo]

28 minutes ago, nigelforbes said:

Yes, many people do. There is a tax treaty between the two countries so you wont be taxed twice. I live in Thailand and may tax here on income but also file a UK return and pay tax on investments and property rental.

My accountant kept asking me about earnings in Thailand. My understanding is that the HMRC expect you to declare any Thai earnings. They accept Thai Tax have first call on taxing Thai income. But.

 

If income tax is 15% here. HMRC will want the other 5% to match the 20% tax in the UK. Depending on how the money was earned, Thai Revenue may or may not inform HMRC. 

 

I think it's down to you to declaring Thai earnings to HMRC. I don't think Thai revenue inform HMRC. Not 100% sure though.

Edited February 12, 2023 by CharlieKo

[nigelforbes]

1 minute ago, CharlieKo said:

My accountant kept asking me about earnings in Thailand. My understanding is that the HMRC expect you to declare any Thai earnings. They accept Thai Tax have first call on taxing Thai income. But.

 

If income tax is 15% here. HMRC will want the other 5% to match the 20% tax in the UK. Depending on how the money was earned, Thai Revenue may or may not inform HMRC. 

Can you declare yourself not UK resident for tax purposes, that way you can exclude Thai earnings, and take advantage of the UK tax free allowance? This is what I've done and there isn't an issue. 

[CharlieKo]

1 minute ago, nigelforbes said:

Can you declare yourself not UK resident for tax purposes, that way you can exclude Thai earnings, and take advantage of the UK tax free allowance? This is what I've done and there isn't an issue. 

Yes, I am NRL (non resident Landlord)  as far as HMRC concerned. But that doesn't mean you are exempt from paying UK tax on Thai earnings. 

 

I don't think you can take advantage of the tax free amount on Thai earnings you should ask an accountant.

 

Having retired and getting a fixed state pension because I live here. Not being entitled to future increases. I don't see why I should pay tax on Thai earnings to HMRC.

 

If it's down to self reporting because Thai Revenue don't inform HMRC. You have an answer of sorts! 

 

Personally I have no intention of informing HMRC of anything related to Thailand other than I live here.  

 

 

 

 

 

[nigelforbes]

9 minutes ago, CharlieKo said:

Yes, I am NRL (non resident Landlord)  as far as HMRC concerned. But that doesn't mean you are exempt from paying UK tax on Thai earnings. 

 

I don't think you can take advantage of the tax free amount on Thai earnings you should ask an accountant.

 

Having retired and getting a fixed state pension because I live here. Not being entitled to future increases. I don't see why I should pay tax on Thai earnings to HMRC.

 

If it's down to self reporting because Thai Revenue don't inform HMRC. You have an answer of sorts! 

 

Personally I have no intention of informing HMRC of anything related to Thailand other than I live here.  

 

 

 

 

 

Being a NRL is not the same as being not UK resident for tax purposes. As you will know, the NRL scheme only allows you to receive rental income free of tax in the expectation you will settle your taxes via a return at year end. If you are not UK resident for tax purposes, that scheme can continue but when you file your UK return, you will exclude any income that doesn't arise in the UK. Your Thai income is then subject to Thai tax rules and is ring fenced, it means you can take advantage of the Thai Revenue tax free or zero rated band.

[JackGats]

In most EU countries rental income in the EU country is always subject to tax in that EU country even if you reside in Thailand. In Germany they have a word for it that means "reduced tax liability" (geschränkt steuerpflichtig). As to revenues like pensions generated in the EU country, you get taxed by the EU country if the pension is subject to a witholding tax in said EU country which is the case of "state pensions". A private pension is another matter, it can sometimes be transferred free of tax and it's then up to the recipient to declare it for taxation in Thailand (or not). Thailand's reluctance to tax should be Thailand's business, not the UK's or the EU countries'.

 

As to capital gains eg on the sale of shares/stocks held in an EU bank, they are to be declared and taxed (or not) in the country of residence which is in our case Thailand.

 

Dividends however are always subject to tax first at source in the country of the company paying the dividend, second in the country of residence if said country has a tax on dividends. I understand the UK has not taxes on dividends, that's why BP, before it got clobbered because of the war in Russia and the windfall tax, was such a good stock to own if you lived in Thailand.

 

I have a Thai TIN which I filed with my EU banks in order to give them something to chew on. TINs are used withing the CRS if I'm not mistaken. This means infos on my finances in Thailand could be reported to the EU countries by Thailand (or sollicited by the EU countries from Thailand?) using my TIN number. I don't think Thailand can be bothered at this stage to send reports though.

[stubuzz]

2 hours ago, nigelforbes said:

I live in Thailand and may tax here on income but also file a UK return and pay tax on investments and property rental.

Why do you submit a UK tax return if you are a UK non tax resident?

[Mac Mickmanus]

43 minutes ago, stubuzz said:

Why do you submit a UK tax return if you are a UK non tax resident?

He gets an income from the UK , through rental property and so he needs to pay tax on that .

   

[nigelforbes]

2 hours ago, stubuzz said:

Why do you submit a UK tax return if you are a UK non tax resident?

Because I have income that arises in the UK, Pension and rental income.

[RandolphGB]

Thanks for the responses. Dividend payments in a share account slightly exceeded the 2,000 GBP allowance in 2021 / 22 tax year. 

 

Is is right that I now have to submit a self assessment tax return? They were my only income from the UK but it's still under the 10,000 GBP personal allowance.

 

They exceeded the 2k dividend allowance but the total is under the 10k Personal Allowance.

 

It's also late so I'm aware there'll be a penalty! 

Edited February 12, 2023 by RandolphGB

[Mike Teavee]

2 hours ago, stubuzz said:

Why do you submit a UK tax return if you are a UK non tax resident?

Lots of reasons why, in my case (Non-UK Resident for Tax Purposes for 15 years) it’s because I used to own a Limited Company & have never managed to shake the requirement for completing a Tax Return. 
 

My (ex-company) accounting firm files them for me, I’m not able to reclaim the £240 I need to pay them but they do a great job on staying on top of property allowances so I always seem to come in with UK Gov owing me a few £s in overpaid tax (Approx £24K pa from Rental Income & Dividends, No Capital Gain Tax unless you’re selling property).

 

[RandolphGB]

11 minutes ago, Mike Teavee said:

Lots of reasons why, in my case (Non-UK Resident for Tax Purposes for 15 years) it’s because I used to own a Limited Company & have never managed to shake the requirement for completing a Tax Return. 
 

My (ex-company) accounting firm files them for me, I’m not able to reclaim the £240 I need to pay them but they do a great job on staying on top of property allowances so I always seem to come in with UK Gov owing me a few £s in overpaid tax (Approx £24K pa from Rental Income & Dividends, No Capital Gain Tax unless you’re selling property).

 

I'd add to that it can be worth paying contributions for the pension and welfare system. I hear no end of stories of people who have to go from Thailand back to the UK and because they have been away for so long, there's no support.

 

Just done the online tool to see if I need to file a self assessment return which says 'do not need to' but the government page has this message 

 

• voluntarily pay Class 2 National Insurance contributions - you’ll need enough contributions to claim some benefits and the State Pension

 

 

 

Edited February 12, 2023 by RandolphGB

[Mac Mickmanus]

27 minutes ago, RandolphGB said:

Thanks for the responses. Dividend payments in a share account slightly exceeded the 2,000 GBP allowance in 2021 / 22 tax year. 

 

Is is right that I now have to submit a self assessment tax return? They were my only income from the UK but it's still under the 10,000 GBP personal allowance.

 

They exceeded the 2k dividend allowance but the total is under the 10k Personal Allowance.

 

It's also late so I'm aware there'll be a penalty! 

If you are required to fill in a self assessment form and you don't do it , you get a 100 Pound fine, then 10 Pound a day fine

[Chomper Higgot]

Yes.

 

Or I want some tax payments back.

[ThaiPauly]

So can someone make this clear for me please:?

 

It's personal questions  but I'm sure someone can help me as it's all driving me nuts

 

I have around 2,000 GBP in rental income in the UK which I am taxed on there.

 

I have around 2,000 GBP in pensions that I am also taxed on in the UK

 

I pay about 4.5,000 in income tax each year in the UK

 

Will I be liable for tax in Thailand and if so how much?

 

I already have a TIN number but I have moved 3 timrs since I registered it, will I have to update it.?

 

Thank you so much

 

I have worked out that my allowances against tax should be 660,000 and I bring in about 1.2m a year for living expenses.

[RandolphGB]

45 minutes ago, ThaiPauly said:

So can someone make this clear for me please:?

 

It's personal questions  but I'm sure someone can help me as it's all driving me nuts

 

I have around 2,000 GBP in rental income in the UK which I am taxed on there.

 

I have around 2,000 GBP in pensions that I am also taxed on in the UK

 

I pay about 4.5,000 in income tax each year in the UK

 

Will I be liable for tax in Thailand and if so how much?

 

I already have a TIN number but I have moved 3 timrs since I registered it, will I have to update it.?

 

Thank you so much

 

I have worked out that my allowances against tax should be 660,000 and I bring in about 1.2m a year for living expenses.

 

 

If you can't figure it out, do you really think the minions in yellow t-shirts pushing pens in government offices will be able to? A nation that takes a month to have paper printed and signed has little chance of monitoring your earnings. 

 

[treetops]

1 hour ago, ThaiPauly said:

Will I be liable for tax in Thailand and if so how much?

 

It depends among other things on your tax residency status, whether any monies you remit are assessable or not and the provisions of the UK DTA.  I see from another post you've found the banking, business, investments forum so you should be able to find out what you're after in the discussions there, in particular the two pinned topics discussing tax.

[OJAS]

14 hours ago, ThaiPauly said:

So can someone make this clear for me please:?

 

It's personal questions  but I'm sure someone can help me as it's all driving me nuts

 

I have around 2,000 GBP in rental income in the UK which I am taxed on there.

 

I have around 2,000 GBP in pensions that I am also taxed on in the UK

 

I pay about 4.5,000 in income tax each year in the UK

 

Will I be liable for tax in Thailand and if so how much?

 

I already have a TIN number but I have moved 3 timrs since I registered it, will I have to update it.?

 

Thank you so much

 

I have worked out that my allowances against tax should be 660,000 and I bring in about 1.2m a year for living expenses.

 

Your first port of call in determining whether or not you have any tax liability in Thailand should be the Double Taxation Agreement (DTA) between the UK and Thailand:

 

https://assets.publishing.service.gov.uk/media/5a80bddc40f0b623026953eb/uk-thailand-dtc180281_-_in_force.pdf

 

Your UK rental income is (IMHO at any rate) covered by Article 7 of the DTA, meaning that it does not need to be included as assessable remitted income in any tax return you file with the Thai Revenue Department.

 

As regards your pension income, it depends on its nature as to whether or not it needs to be included as assessable remitted income in any tax return you file with the Thai Revenue Department. Civil Service, military and other public sector occupational pensions are covered by Article 19(2)(a) of the DTA, meaning that they do not need to be included. On the other hand company occupational pensions and the State Pension are not covered by the DTA, meaning that they do.

 

Incidentally, I am at a complete loss to understand how come you are paying £4,500 per annum by way of income tax against annual income apparently totalling £4,000 (unless, of course, you have other income sources which you have chosen not to disclose)!

 

I would have thought it highly unlikely that you will need to update your existing TIN, but it would IMHO be prudent for you to check this point with your current Revenue Office.

 

Edited June 7 by OJAS

[Mike Teavee]

3 hours ago, OJAS said:

Your UK rental income is (IMHO at any rate) covered by Article 7 of the DTA, meaning that it does not need to be included as assessable remitted income in any tax return you file with the Thai Revenue Department.

 

The UK-TH DTA says "(1) Income from immovable property may be taxed in the Contracting State in which such property is situated." which only says that the UK can tax you on it, it does not say that only the UK can tax you on it so you might have to pay tax on it if you remit it to Thailand. 

 

Either ways,  Section 40, paragraph 5, point A of the Thai Revenue Code says that Rental Property is assessable income & so should be included in any tax return you file... 

 

Section 40 Assessable income is income of the following categories including any amount of tax paid by the payer of income or by any other person on behalf of a taxpayer.

(5) Money or any other gain derived from:

(a) rent of property,

 

https://www.rd.go.th/english/37749.html

 

 

I've decided to err on the side of caution & not remit any rental income until it's made clear whether I will be taxed on it or not. 

[rocketboy2]

3 minutes ago, Mike Teavee said:

I've decided to err on the side of caution & not remit any rental income until it's made clear whether I will be taxed on it or not. 

 

Spot on. 

[alphason]

6 hours ago, Mike Teavee said:

 

The UK-TH DTA says "(1) Income from immovable property may be taxed in the Contracting State in which such property is situated." which only says that the UK can tax you on it, it does not say that only the UK can tax you on it so you might have to pay tax on it if you remit it to Thailand. 

 

Either ways,  Section 40, paragraph 5, point A of the Thai Revenue Code says that Rental Property is assessable income & so should be included in any tax return you file... 

 

Section 40 Assessable income is income of the following categories including any amount of tax paid by the payer of income or by any other person on behalf of a taxpayer.

(5) Money or any other gain derived from:

(a) rent of property,

 

https://www.rd.go.th/english/37749.html

 

 

I've decided to err on the side of caution & not remit any rental income until it's made clear whether I will be taxed on it or not. 

 

I've been looking into the same thing 

 

 

I saw an article on Sherrings website regarding CGT on sale of a UK rented property but the wording used is the same 'may be taxed' ...
"(1) Capital gains from the alienation of immovable property, as defined in paragraph (2) Article 7, may be taxed in the Contracting State in which such property is situated."

 

So I contacted Sherrings, and the International Tax Director confirmed to me this would not be subject to Thailand Tax law.

 

He said regarding Article 14, paragraph 1, of UK Thai DTA. The words "may be taxed" do not have the usual laymans meaning, instead the legal meaning of these words is that because the UK's tax law has Capital Gains Tax legislation, then the immovable property in the UK is subject to the Capital Gains Tax legislation in the UK, and not subject to Thailand's tax law.

 

Edited June 8 by alphason

[alphason]

9 hours ago, OJAS said:

 

Your first port of call in determining whether or not you have any tax liability in Thailand should be the Double Taxation Agreement (DTA) between the UK and Thailand:

 

https://assets.publishing.service.gov.uk/media/5a80bddc40f0b623026953eb/uk-thailand-dtc180281_-_in_force.pdf

 

Your UK rental income is (IMHO at any rate) covered by Article 7 of the DTA, meaning that it does not need to be included as assessable remitted income in any tax return you file with the Thai Revenue Department.

 

 

Thats what I have been told, see above reply

[Mike Teavee]

52 minutes ago, alphason said:

 

I've been looking into the same thing 

 

 

I saw an article on Sherrings website regarding CGT on sale of a UK rented property but the wording used is the same 'may be taxed' ...
"(1) Capital gains from the alienation of immovable property, as defined in paragraph (2) Article 7, may be taxed in the Contracting State in which such property is situated."

 

So I contacted Sherrings, and the International Tax Director confirmed to me this would not be subject to Thailand Tax law.

 

He said regarding Article 14, paragraph 1, of UK Thai DTA. The words "may be taxed" do not have the usual laymans meaning, instead the legal meaning of these words is that because the UK's tax law has Capital Gains Tax legislation, then the immovable property in the UK is subject to the Capital Gains Tax legislation in the UK, and not subject to Thailand's tax law.

 

 

That's certainly looking a lot more positive though I'd like to see a few people go through the process before I sell my UK House & bring the money over, it's bad enough getting stung >18% in the UK!!!

 

The "May" wording for Article 7 Rental Income is the same so it would be great if we can get the same confirmation as since this whole thing kicked off, Rental Income has been used as an example of one of the things we might be taxed on. 

 

 

[alphason]

7 minutes ago, Mike Teavee said:

 

That's certainly looking a lot more positive though I'd like to see a few people go through the process before I sell my UK House & bring the money over, it's bad enough getting stung >18% in the UK!!!

 

The "May" wording for Article 7 Rental Income is the same so it would be great if we can get the same confirmation as since this whole thing kicked off, Rental Income has been used as an example of one of the things we might be taxed on. 

 

 

 

Yes 18%/24% CGT in UK, but that could be 5-35% in Thailand as PIT, 25% Band 1mTHB is only £21K ish 30% band 2-5MTHB £42K, 35% band 5MTHB £105K. And UK non residents are only taxed on gain from April 2015.

 

I would feel happier to get more confirmation also, there is so much contradictory information and guess work. I dont expect there is anyone at HMRC or Thai RD who would be able to interpret the DTA, but This Tax Director at Sherrings should be a reliable resource though if you look at the website. Maybe the way is consult someone like this as a group.

 

[OJAS]

22 hours ago, Mike Teavee said:

The "May" wording for Article 7 Rental Income is the same so it would be great if we can get the same confirmation as since this whole thing kicked off, Rental Income has been used as an example of one of the things we might be taxed on. 

 

The "may be taxed" wording in Articles 7(1) and 14(1) does, however, appear to contrast with the more unambiguous "shall be taxable only" wording for Civil Service, etc pensions in Article 19(2).

 

[alphason]

3 hours ago, OJAS said:

 

The "may be taxed" wording in Articles 7(1) and 14(1) does, however, appear to contrast with the more unambiguous "shall be taxable only" wording for Civil Service, etc pensions in Article 19(2).

 

 

Yes it makes the whole thing unclear. Keep looking and reading more articles mostly from experts who clearly aren't, the more I read the more confused I become.

 

I did find a useful list of assessable Income, section 40 of the revenue code, it lists all the types of income that are assessable including:

(5) Income derived from rental of 1. Land, buildings, house

(8) Other income includes income derived from 1. Transfers of immovable property in Thailand.

What I found interesting is for the whole list of 30ish types of income this was only one that said 'In Thailand' like it excludes property outside of Thailand?

 

Its worth a read of the Sherrings website.

 

Maybe foreign rental income is taxable, less 30% expenses without proof or actual expenses with proof - I don't know what is allowed as expenses, agent fees, mortgage interest, maintenance, insurance? This could be over 30% if allowed.

 

If tax is due on the gain from sale of foreign property are there allowances over the purchase price, for the time you may have lived in the property (equiv to PRR in UK), costs of buying/selling, mortgage interest fees?
When would Thailand count the gain from, (in UK its from when the law changed April 2015), gain from Jan 2024 when it became taxable in Thailand?

 

So many questions and hard to find answers. Maybe Sherrings again. I did contact another tax adviser who asked for 12kish THB to detail how the DTA would override Thai tax laws.

Hoping it becomes clearer soon, no one want to be the guinea pig without having the facts first.

[Mike Teavee]

2 hours ago, alphason said:

When would Thailand count the gain from, (in UK its from when the law changed April 2015), gain from Jan 2024 when it became taxable in Thailand?

The videos I've seen from Expat Tax say that the gain is from the date you acquired the Asset, but I think in the case of property, as you'd be showing a UK CGT Tax Return (Needs to be completed within 60 days of selling the property so would normally be a separate return) effectively the value will be calculated as at April 2015.

 

[alphason]

1 hour ago, Mike Teavee said:

The videos I've seen from Expat Tax 

 

 

Expat Tax Thailand, anyone tried the free consultation?

 

The Tax Director from Sherrings seems very well qualified and experienced from the website, I'd just like to hear it from more sources.

[OJAS]

13 hours ago, alphason said:

Yes it makes the whole thing unclear. Keep looking and reading more articles mostly from experts who clearly aren't, the more I read the more confused I become.

 

We shall probably never know what lay behind the British and Thai negotiators' minds when the DTA was under discussion some 45 years' ago, but it does strike me that the "may be taxed" wording which has been used not just in Articles 7 and 14 is basically a cop-out. Either a particular item is covered (as is unambiguously stated in the case of Civil Service, etc pensions) or it is not (as per the deafening silence in the case of the State and company pensions).

 

But, there again, it may not always be possible for things to be viewed exclusively in black and white - and it is (in the view of this particular cynic, at least) clearly in the interests of handsomely-remunerated tax consultants/advisers/agents/experts that they are not!

 

Edited June 9 by OJAS