UK tax status if permanent move to Thailand

[keithkarmann]

Probably been discussed before but I would like to get as much information on this topic as possible. I know If I declare that I have moved to Thailand that my UK state pension will be frozen but hopefully my local authority pension will still be increased with inflation. What I need to know is will I still be allowed the personal allowance before tax which is presently about £12750 per year.

I am a British citizen and I also have a rental property in the UK. Any advice from people who have done the same will be fully appreciated.

[Mutt Daeng]

Yes, you will still get the personal tax allowance when moving here. I moved here 14 years ago and HMRC are aware of this. I also have a local gov. pension which does get an increase each year. If you are renting property out, you will probably need to file a tax return each year. On the tax return there is a box to tick to say you are eligible for the personal tax allowance. Being a UK citizen makes you eligible (currently).

Check this out https://www.gov.uk/tax-uk-income-live-abroad/personal-allowance

Edited May 1, 2023 by Mutt Daeng

[Tiber]

Stay stum, treat yourself as still in UK, no loss of income

[keithkarmann]

2 hours ago, Tiber said:

Stay stum, treat yourself as still in UK, no loss of income

Several things will probably make keeping my UK residency difficult. My passport will have to be renewed from within Thailand (arousing suspicion that I am not in the UK) and also I am finding it more difficult to keep a residential address in the UK. By declaring that I have just moved to Thailand it would be less likely that previous pension rises would be knocked off if the UK pensions thought I had moved years ago without declaring the fact. Yes I realise I would not get any more increases which would be a big blow if the future rises followed the triple lock formula with high inflation.

[Mike Teavee]

3 hours ago, Mutt Daeng said:

Yes, you will still get the personal tax allowance when moving here.

Yes you are still eligible to a UK Personal Tax Allowance but under certain circumstances (I doubt they apply here as the OP hasn't mentioned any other kind of Investment income apart from Rent) it can be beneficial to not take the Personal Tax Allowance and have other income considered as "Excluded/Disregarded"

https://www.iris.co.uk/support/knowledgebase/kb/ias-10608/#:~:text='Excluded income'%2C also known,and you cannot override this.

 

Once you have your Non-Resident for Tax Purposes status you can ask the company who manages your property to not withhold tax (NRL1 https://www.gov.uk/government/publications/non-resident-landlord-application-to-have-uk-rental-income-without-deduction-of-uk-tax-individuals-nrl1)  

 

You will need to complete a Self Assessment form for at least a couple of years, notes/guidelines here... https://www.gov.uk/government/publications/non-residents-and-investment-income-hs300-self-assessment-helpsheet

[hotandsticky]

7 minutes ago, keithkarmann said:

Several things will probably make keeping my UK residency difficult. My passport will have to be renewed from within Thailand (arousing suspicion that I am not in the UK) and also I am finding it more difficult to keep a residential address in the UK. By declaring that I have just moved to Thailand it would be less likely that previous pension rises would be knocked off if the UK pensions thought I had moved years ago without declaring the fact. Yes I realise I would not get any more increases which would be a big blow if the future rises followed the triple lock formula with high inflation.

 

Maintaining a UK address is the key. I manage this with the help of my ex-wife.

 

Your 3 sources of income mean that you will be required to complete a self-assessment return. All income generated in the UK is subject to UK tax; yours will be added together and the personal tax allowance of  £12570 will be applied, first to the state pension so you receive that gross, then the occupational pension (where a  PAYE tax code is applied) then you will be charged on your declared rental income - usually payable twice a year, January and July.  

[Mike Teavee]

2 hours ago, Tiber said:

Stay stum, treat yourself as still in UK, no loss of income

I'm assuming the OP's pensions alone will take them over the £12,570 personal allowance with any additional income attracting more tax so there are a couple of good reasons to be Non-UK Resident for Tax Purposes... 

1. No Capital Gains Tax on assets (excluding Property) sales, the CGT limit was reduced from £12,300 to £6,000 this year so a basic rate taxpayer will pay 10% on any gains over £6,000... Expect this limit to continue to reduce each year.
2. Dividends, again limit was reduced from £2,000 to £1,000 this year (& will be £500 next) so a Basic Rate Tax payer will pay an additional 20% on their dividends (Higher Rate Tax payer will pay 33.75% & 39.35% if you're in the Higher rate additional bracket)  

 

 

 

 

[OJAS]

13 hours ago, keithkarmann said:

Several things will probably make keeping my UK residency difficult.

Only one thing in your case as I see it - HMRC's Statutory Residence Test:

 

https://www.gov.uk/government/publications/rdr3-statutory-residence-test-srt/guidance-note-for-statutory-residence-test-srt-rdr3

 

But as already said that won't in itself affect your entitlement to the personal allowance.

 

Edited May 2, 2023 by OJAS

[CharlieH]

Off topic and responses removed 

 

This is NOT a UK passport topic.

[topt]

On 5/2/2023 at 9:43 AM, Mike Teavee said:

I'm assuming the OP's pensions alone will take them over the £12,570 personal allowance with any additional income attracting more tax so there are a couple of good reasons to be Non-UK Resident for Tax Purposes... 

1. No Capital Gains Tax on assets (excluding Property) sales, the CGT limit was reduced from £12,300 to £6,000 this year so a basic rate taxpayer will pay 10% on any gains over £6,000... Expect this limit to continue to reduce each year.
2. Dividends, again limit was reduced from £2,000 to £1,000 this year (& will be £500 next) so a Basic Rate Tax payer will pay an additional 20% on their dividends (Higher Rate Tax payer will pay 33.75% & 39.35% if you're in the Higher rate additional bracket)  

 

 

 

 

Sorry but are you suggesting being non-resident makes any difference to Point 2? If so can you please explain - unless it refers to your earlier comment re foregoing the PA which I understand.

[topt]

On 5/2/2023 at 9:33 AM, hotandsticky said:

usually payable twice a year, January and July.  

I am currently in this boat but have been paying only once per year? Hopefully this will not change.

 

This is after they have assessed my paper tax return (too tight to pay for commercial software although seriously considering it ) and they let me know how much I owe. 

[Badger18]

On 5/2/2023 at 3:43 AM, Mike Teavee said:

I'm assuming the OP's pensions alone will take them over the £12,570 personal allowance with any additional income attracting more tax so there are a couple of good reasons to be Non-UK Resident for Tax Purposes... 

1. No Capital Gains Tax on assets (excluding Property) sales, the CGT limit was reduced from £12,300 to £6,000 this year so a basic rate taxpayer will pay 10% on any gains over £6,000... Expect this limit to continue to reduce each year.
2. Dividends, again limit was reduced from £2,000 to £1,000 this year (& will be £500 next) so a Basic Rate Tax payer will pay an additional 20% on their dividends (Higher Rate Tax payer will pay 33.75% & 39.35% if you're in the Higher rate additional bracket)  

 

 

 

 

Can you trade assets other than property though? In practice I guess that means shares, but I don't think brokers will deal with you if you are not resident. You must be able to sell what you are holding if you have become non-resident, I guess.

[Mike Teavee]

3 hours ago, topt said:

Sorry but are you suggesting being non-resident makes any difference to Point 2? If so can you please explain - unless it refers to your earlier comment re foregoing the PA which I understand.

I can only say that prior to becoming Non-UK Resident for Tax (in 2008) when I had an income that put me in the Higher Rate Earnings bracket I had to pay additional tax on my UK Dividends & since then I haven't BUT since then I also haven't been earning a UK Salary so my UK passive income has been around the 25-30K per year mark. 

 

As I used to own my own LTD company (One man band IT Consultancy) the Tax firm that used to file my company accounts files my personal returns so have to confess I don't 100% understand the dividend income rules since they introduced the "Dividend Allowance" & researching online brings mixed opinions about whether Non-UK residents (for Tax) are liable for more tax or not so I might be wrong & might find myself with an unexpected Tax Bill this year as Dividends have been very good ???? 

 

Edited May 6, 2023 by Mike Teavee

[Mike Teavee]

20 minutes ago, Badger18 said:

Can you trade assets other than property though? In practice I guess that means shares, but I don't think brokers will deal with you if you are not resident. You must be able to sell what you are holding if you have become non-resident, I guess.

As I've posted previously it was Barclays that moved me overseas & I became Non-Resident for Tax when I moved to work for Barclays Singapore PTE so they know full well that I'm not in the UK but there are no problems trading online or over the phone, however as non-UK Resident for Tax you cannot invest any new monies into ISAs.  

 

I do approx. 6 trades per year which is made up of manual re-investing of dividend income twice per year + I keep a "Punt Fund" for shares that I think have been oversold which I Buy & then sell when they hit my target gain (which is usually 10%). 

 

Again, no problems in trading & my accountant doesn't ask me for any CGT information when completing my return as I've been non-UK Resident (For Tax) for 15 years 

 

 

 

Edited May 6, 2023 by Mike Teavee

[Badger18]

On 5/1/2023 at 9:23 PM, keithkarmann said:

I know If I declare that I have moved to Thailand that my UK state pension will be frozen.

Can I just double check that this applies where you are already receiving the state pension at the point when you cease to be UK resident and does not mean that you get it at the rate for the year you ceased to be resident even if that is many years before you turn 65 or 67 or whatever it is?

[Mike Teavee]

10 minutes ago, Badger18 said:

Can I just double check that this applies where you are already receiving the state pension at the point when you cease to be UK resident and does not mean that you get it at the rate for the year you ceased to be resident even if that is many years before you turn 65 or 67 or whatever it is?

It's the latter of when you move overseas OR receive your 1st Pension, so if (Like me) you're not yet at State Pension age but have declared yourself as living in Thailand then your pension will continue to increase until you're eligible to receive it at which point (assuming still living in Thailand) it will be frozen. 

 

Fun fact, yesterday I cancelled my monthly AVC subscription as by my calculations I've paid the full amount (40 years, I was "Contracted Out" for most of it) that their State Pension calculators site says I need to pay. 

 

Am visiting UK from 15th May so will call them to make sure. 

 

 

Edited May 6, 2023 by Mike Teavee

[hotandsticky]

21 hours ago, topt said:

I am currently in this boat but have been paying only once per year? Hopefully this will not change.

 

This is after they have assessed my paper tax return (too tight to pay for commercial software although seriously considering it ) and they let me know how much I owe. 

 

Online is easy to complete. no need for commercial software.

[topt]

1 hour ago, hotandsticky said:

 

Online is easy to complete. no need for commercial software.

When in the UK I used to complete online. However not if you complete the SA109, which you are supposed to as a non-resident. It is not available via HMRC online.

I don't think the property pages are either?

Edited May 7, 2023 by topt

[Badger18]

On 5/1/2023 at 9:23 PM, keithkarmann said:

I also have a rental property

Don't know if your property is mortgaged but be aware that some banks will ask you to close your account if you move abroad permanently and some mortgage Ts&Cs allow the lender to call in the loan. From what I've read on here, keeping a UK address seems to stave off any problems even if you are telling HMRC that you're non-resident. You would definitely want to check your banking facilities / mortgage weren't suddenly going to be withdrawn before notifying them.

[Badger18]

On 5/6/2023 at 10:23 AM, topt said:

I am currently in this boat but have been paying only once per year? Hopefully this will not change.

 

This is after they have assessed my paper tax return (too tight to pay for commercial software although seriously considering it ) and they let me know how much I owe. 

Payments on account are not required where the amount collected through the previous return is below a certain level, so you will stay on one payment a year unless your tax bill goes up.