Thailand / UK Dual Tax Agreement Queries

[Carrbhoy]

Hi all, first off, not sure these queries fit into this specific forum but I'm sure there are other UK expats who will know the answers or be able to point me in the right direction. If I need to move it to the correct forum, please let me know.

 

I'm from Scotland so UK citizen. I arrived in Thailand around 19 months ago and have a Retirement permission to stay. Completed my first renewal beginning of April. Travelled within Thailand during this period but not left the country so far.

 

I therefore meet the UK non-resident criteria for Tax Year 2022/2023.

 

I receive a UK company pension and have only recently advised them of my Thailand address.

 

HMRC aren't currently aware I have been living abroad. I've only recently let out my Scottish address and had been using this for post etc. I will notify them soon as part of the Tax Self-Assessment submissions.

 

Queries:

 

1) For Tax year 2022 / 2023, do I need to pay Thailand tax for my Income? This consists of a UK company pension (non Government if relevant) & Buy To Let. There is a small amount of Investment dividends.

 

if so, as I've already paid tax on the Pension element of my income, can I claim a refund from HMRC?

 

2) Is it best to seek local advice? I was going to make an appointment with Siam Legal in Chiang Mai to progress.

 

Any assistance or guidance is greatly appreciated.

 

Regards, C

 

   

[cleopatra2]

When you state UK citizen I assume British National 

With regards to your pension assuming it is UK derived income , it is taxable in the UK even as a non resident for UK tax purposes 

I am unsure on the Buy to let and investment dividends . On these would need to consult the DTT 

[Dah fahrang]

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

 

This link might help. Very clear, from "the horse's mouth"

20 years ago I became UK non-resident for tax purposes. I was (still am) in similar position as you.

After a lot of (polite) correspondence with HMRC, they made it very explicit.

As a non-resident, you only have to pay HMRC UK tax for any income derived from all/any UK source.  Any foreign/offshore income for non-residents they don't want to know about.

 

 

 

 

 

[foreverlomsak]

5 hours ago, Carrbhoy said:

1) For Tax year 2022 / 2023, do I need to pay Thailand tax for my Income?

Easy start the Thai year is Jan to Dec (calendar year).  If you not have a Thai Tax ID, don't worry about it, nobody will chase you. Advice I've seen from HSBC is you can only be taxed if you bring it into Thailand in the tax year you earn it. The only Thai tax I pay is for the minimal interest on my bank savings account they (Bangkok Bank and SCB) give you 0.5% pa paid half yearly and make a 15% tax withholding.

 

5 hours ago, Carrbhoy said:

if so, as I've already paid tax on the Pension element of my income, can I claim a refund from HMRC?

If you were to be dual taxed in the UK and then Thailand, you would submit a refund claim to HRMC, but as far as I can see from the UK version it is on a very limited basis, the Thai version appears different.

 

5 hours ago, Carrbhoy said:

2) Is it best to seek local advice? I was going to make an appointment with Siam Legal in Chiang Mai to progress.

If I was you I wouldn't do anything which may rock the boat and bring you to the taxman's attention.

[cleopatra2]

9 minutes ago, foreverlomsak said:

Easy start the Thai year is Jan to Dec (calendar year).  If you not have a Thai Tax ID, don't worry about it, nobody will chase you. Advice I've seen from HSBC is you can only be taxed if you bring it into Thailand in the tax year you earn it. The only Thai tax I pay is for the minimal interest on my bank savings account they (Bangkok Bank and SCB) give you 0.5% pa paid half yearly and make a 15% tax withholding.

 

If you were to be dual taxed in the UK and then Thailand, you would submit a refund claim to HRMC, but as far as I can see from the UK version it is on a very limited basis, the Thai version appears different.

 

If I was you I wouldn't do anything which may rock the boat and bring you to the taxman's attention.

The OP cannot claim the tax back from UK derived income.

In the case of his pension income he would be able receive credit for the UK tax paid against any Thai tax due.

[topt]

5 hours ago, Carrbhoy said:

I will notify them soon as part of the Tax Self-Assessment submissions.

You may well be aware of this already but unless you are filing using commercial software you would (should) file a paper tax return. This is because SA109 which non residents are supposed to file is not available to complete within HMRC's standard online filing. Not sure if property is either?

If so you need to make sure it is received by 31st October.

https://www.gov.uk/tax-right-retire-abroad-return-to-uk

[prakhonchai nick]

The OP will need to advise DWP that he has permanently moved to Thailand, and like many of us he will have a frozen pension

[skorts]

Carrbhoy
 

I was in a similar situation to you becoming a U.K. Non-resident 5 tax years ago. 

Others have already answered how you are taxed on your U.K/any Thai income. 

As topt says you cannot use HMRC’s on-line system to file your annual tax return on-line as a UK Non-resident. 

HMRC list a number of software providers that can help. I have been using TaxCalc for the last 5 years:

 

www.taxcalc.com

 

It is brilliant and makes filing your return so easy. After setting up your details the first year it pre-populates so much of the required information in subsequent years. 
 

You can include details of your BTL property using the software. 
 

You can also offset the cost of the annual software licence as an expense against your rental property income. 
 

You may already be aware but there are different Capital Gains Tax (CGT) rules for UK Non-residents after being U.K. Non-resident for 5 complete tax years. 
 

I do my tax return filing myself using TaxCalc software but take advice when needed from the Fry Group who are expat tax specialists:

 

www.thefrygroup.co.uk

 

My contact who I met before becoming U.K. Non-resident is based in the U.K.:

 

Dale Butcher

Head of Tax Compliance

[email protected] 

 

After 4 years of Royal Mail postal re-direction from my U.K. address, and not being able to renew again, I set up an on-line mailing account which gives me a U.K. residential street (not PO Box) address:

 

www.ukpostbox.com

 

I use this as it makes my life easier and I can manage all of my U.K. post on-line. 

 

As I am registered with HMRC as U.K. non-resident I have no intention of trying to claim I live in the U.K. when my state pension becomes payable and will advise DWP accordingly - I believe HMRC and DWP’s systems are now linked so the DWP may already know in any case I am U.K. Non-resident. Appreciate that means my state pension will be frozen once payment starts but regardless of how unfair that is I am playing by the rules. 

 

 

 

Edited May 18, 2023 by skorts

[PETERTHEEATER]

2 hours ago, prakhonchai nick said:

The OP will need to advise DWP that he has permanently moved to Thailand, and like many of us he will have a frozen pension

He has a UK company pension. This is not frozen.

[Man Mart]

Hi. Only income earned inside Thailand is subject to tax during retirement. Therefore, you are not be obliged to pay any taxes for any income you have earned from overseas. Also, personal income taxes are not required for retirees in Thailand. Please note that you cannot work in Thailand while on a retirement visa.

Yes you should have informed HMRC and Department of Work and Pensions that you have relocated to Thailand. Your UK state pension will be frozen at the time when you qualify for it, but please note you can claim any increase back for the time you are back in the UK on visits etc.

After I retired as a teacher in Thailand, as far as I was concerned my tax paying days in Thailand were over when I retired  as all my income is derived from the UK from my local authority pension, state pension and income from UK bank savings accounts. The Thai tax authorities still have my TIN number and so if this was any different they have have never bothered to contact me and also me contact them! If people have found it any  different then please be free to let me know. 

Edited May 18, 2023 by Man Mart

[khunPer]

On 5/18/2023 at 6:14 AM, Carrbhoy said:

1) For Tax year 2022 / 2023, do I need to pay Thailand tax for my Income? This consists of a UK company pension (non Government if relevant) & Buy To Let. There is a small amount of Investment dividends.

The DTA between UK and Thailand says (my bold):

 

Article 19
Governmental Services
(1) (a) Remuneration, other than a pension, paid by a Contracting State or a political
subdivision or a local authority thereof to any individual in respect of services of
a governmental nature rendered to that State or subdivision or local authority
thereof shall be taxable only in that State.
(b) However, such remuneration shall be taxable only in the other Contracting
State if the services are rendered in that State and the recipient is a resident of
that other Contracting State who:
(i) is a national of that State; or
(ii) did not become a resident of that State solely for the purpose of
performing the services.

(2) (a) Any pension paid by the Contracting State or a political subdivision or a local
authority thereof to any individual in respect of services of a governmental nature
rendered to that State or subdivision or local authority thereof shall be taxable
only in that State.
(b) However, such pension shall be taxable only in the other contracting State if
the recipient is a national of and a resident of that State.

(3) The provisions of Articles 16 and 17 shall apply to remuneration in respect of
services rendered in connection with any business carried on by one of the Contracting
States or a political subdivision or local authority thereof.

[cleopatra2]

28 minutes ago, khunPer said:

The DTA between UK and Thailand says (my bold):

 

Article 19
Governmental Services
(1) (a) Remuneration, other than a pension, paid by a Contracting State or a political
subdivision or a local authority thereof to any individual in respect of services of
a governmental nature rendered to that State or subdivision or local authority
thereof shall be taxable only in that State.
(b) However, such remuneration shall be taxable only in the other Contracting
State if the services are rendered in that State and the recipient is a resident of
that other Contracting State who:
(i) is a national of that State; or
(ii) did not become a resident of that State solely for the purpose of
performing the services.

(2) (a) Any pension paid by the Contracting State or a political subdivision or a local
authority thereof to any individual in respect of services of a governmental nature
rendered to that State or subdivision or local authority thereof shall be taxable
only in that State.
(b) However, such pension shall be taxable only in the other contracting State if
the recipient is a national of and a resident of that State.

(3) The provisions of Articles 16 and 17 shall apply to remuneration in respect of
services rendered in connection with any business carried on by one of the Contracting
States or a political subdivision or local authority thereof.

The OP pension is non government thus article 19 does not apply.

Because the DTT has no specific articles regarding pensions. There is no relief available for UK tax. To avoid double taxation article 23 applies and UK tax paid on income sourced in the UK can be used as credit against any Thai tax due.

[Carrbhoy]

On 5/18/2023 at 5:40 AM, cleopatra2 said:

When you state UK citizen I assume British National 

With regards to your pension assuming it is UK derived income , it is taxable in the UK even as a non resident for UK tax purposes 

I am unsure on the Buy to let and investment dividends . On these would need to consult the DTT 

Thanks for your response. 

[Carrbhoy]

On 5/18/2023 at 10:10 AM, Dah fahrang said:

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

 

This link might help. Very clear, from "the horse's mouth"

20 years ago I became UK non-resident for tax purposes. I was (still am) in similar position as you.

After a lot of (polite) correspondence with HMRC, they made it very explicit.

As a non-resident, you only have to pay HMRC UK tax for any income derived from all/any UK source.  Any foreign/offshore income for non-residents they don't want to know about.

 

 

 

 

 

Appreciate the link and your input. Thank you - very useful.

[2009]

Christ, they even tax pensions. Jesus wept.

[Carrbhoy]

On 5/18/2023 at 10:52 AM, foreverlomsak said:

Easy start the Thai year is Jan to Dec (calendar year).  If you not have a Thai Tax ID, don't worry about it, nobody will chase you. Advice I've seen from HSBC is you can only be taxed if you bring it into Thailand in the tax year you earn it. The only Thai tax I pay is for the minimal interest on my bank savings account they (Bangkok Bank and SCB) give you 0.5% pa paid half yearly and make a 15% tax withholding.

 

If you were to be dual taxed in the UK and then Thailand, you would submit a refund claim to HRMC, but as far as I can see from the UK version it is on a very limited basis, the Thai version appears different.

 

If I was you I wouldn't do anything which may rock the boat and bring you to the taxman's attention.

Thanks for your input. I don't currently have a Thai Tax ID (TIN) - I did a quick google and see that I do meet the criteria. So, should I obtain one?

 

I see the later reply re claiming a credit rather than a refund. Same outcome as such - I'm now clear on how to get any monies due back.

 

I think I want to go down the route of getting things in place which comply with both Thai / UK tax requirements from the outset.

 

[Carrbhoy]

On 5/18/2023 at 11:04 AM, cleopatra2 said:

The OP cannot claim the tax back from UK derived income.

In the case of his pension income he would be able receive credit for the UK tax paid against any Thai tax due.

Thanks for clarifying.

 

[Carrbhoy]

On 5/18/2023 at 11:21 AM, topt said:

You may well be aware of this already but unless you are filing using commercial software you would (should) file a paper tax return. This is because SA109 which non residents are supposed to file is not available to complete within HMRC's standard online filing. Not sure if property is either?

If so you need to make sure it is received by 31st October.

https://www.gov.uk/tax-right-retire-abroad-return-to-uk

I had picked up that the online submission isn't possible for non residents. I wasn't aware of the different HMRC deadlines so thanks for your input and useful link.

 

[Carrbhoy]

On 5/18/2023 at 1:57 PM, skorts said:

Carrbhoy
 

I was in a similar situation to you becoming a U.K. Non-resident 5 tax years ago. 

Others have already answered how you are taxed on your U.K/any Thai income. 

As topt says you cannot use HMRC’s on-line system to file your annual tax return on-line as a UK Non-resident. 

HMRC list a number of software providers that can help. I have been using TaxCalc for the last 5 years:

 

www.taxcalc.com

 

It is brilliant and makes filing your return so easy. After setting up your details the first year it pre-populates so much of the required information in subsequent years. 
 

You can include details of your BTL property using the software. 
 

You can also offset the cost of the annual software licence as an expense against your rental property income. 
 

You may already be aware but there are different Capital Gains Tax (CGT) rules for UK Non-residents after being U.K. Non-resident for 5 complete tax years. 
 

I do my tax return filing myself using TaxCalc software but take advice when needed from the Fry Group who are expat tax specialists:

 

www.thefrygroup.co.uk

 

My contact who I met before becoming U.K. Non-resident is based in the U.K.:

 

Dale Butcher

Head of Tax Compliance

[email protected] 

 

After 4 years of Royal Mail postal re-direction from my U.K. address, and not being able to renew again, I set up an on-line mailing account which gives me a U.K. residential street (not PO Box) address:

 

www.ukpostbox.com

 

I use this as it makes my life easier and I can manage all of my U.K. post on-line. 

 

As I am registered with HMRC as U.K. non-resident I have no intention of trying to claim I live in the U.K. when my state pension becomes payable and will advise DWP accordingly - I believe HMRC and DWP’s systems are now linked so the DWP may already know in any case I am U.K. Non-resident. Appreciate that means my state pension will be frozen once payment starts but regardless of how unfair that is I am playing by the rules. 

 

 

 

Thanks Skorts for the detailed reply. This is the position I want to be in.....I'll come back to you with any queries once I've had the opportunity to review the Taxcalc / UK Post box websites.

 

[Carrbhoy]

On 5/19/2023 at 8:54 AM, cleopatra2 said:

The OP pension is non government thus article 19 does not apply.

Because the DTT has no specific articles regarding pensions. There is no relief available for UK tax. To avoid double taxation article 23 applies and UK tax paid on income sourced in the UK can be used as credit against any Thai tax due.

So, this is where the replies so far start to get confusing. Up to reading this, I thought that UK Derived Income eg Corporate Pension / UK Buy To Let Income / UK Bank Interest / UK Equity Dividends are all taxable in the UK as a Non-Resident. No need to involve the Thai tax authorities.

 

This is now saying, it is taxable by the Thai Tax authorities under the DTT but I can claim a tax credit (not refund) from HMRC under Article 23.

 

Which is correct?

 

 

 

[Carrbhoy]

On 5/19/2023 at 8:22 AM, khunPer said:

The DTA between UK and Thailand says (my bold):

 

Article 19
Governmental Services
(1) (a) Remuneration, other than a pension, paid by a Contracting State or a political
subdivision or a local authority thereof to any individual in respect of services of
a governmental nature rendered to that State or subdivision or local authority
thereof shall be taxable only in that State.
(b) However, such remuneration shall be taxable only in the other Contracting
State if the services are rendered in that State and the recipient is a resident of
that other Contracting State who:
(i) is a national of that State; or
(ii) did not become a resident of that State solely for the purpose of
performing the services.

(2) (a) Any pension paid by the Contracting State or a political subdivision or a local
authority thereof to any individual in respect of services of a governmental nature
rendered to that State or subdivision or local authority thereof shall be taxable
only in that State.
(b) However, such pension shall be taxable only in the other contracting State if
the recipient is a national of and a resident of that State.

(3) The provisions of Articles 16 and 17 shall apply to remuneration in respect of
services rendered in connection with any business carried on by one of the Contracting
States or a political subdivision or local authority thereof.

Thanks for your input - I've replied to this under the other message below.

 

[Carrbhoy]

25 minutes ago, 2009 said:

Christ, they even tax pensions. Jesus wept.

Replies are not clear......some say as UK dervied income I pay UK tax only.........later replies are saying Thai Tax DTT does apply but I can claim tax credits from the UK for the pension dual payments.....I've asked for this to be clarified.

 

[foreverlomsak]

 

24 minutes ago, Carrbhoy said:

Replies are not clear......some say as UK dervied income I pay UK tax only.........later replies are saying Thai Tax DTT does apply but I can claim tax credits from the UK for the pension dual payments.....I've asked for this to be clarified.

 

Extract from UK Gov website, link is at the bottom

You usually have to pay tax on your UK income even if you’re not a UK resident. Income includes things like:

pension

rental income

savings interest

wages

If you’re eligible for a Personal Allowance you pay Income Tax on your income above that amount. Otherwise, you pay tax on all your income.

The country where you live might tax you on your UK income. If it has a ‘double-taxation agreement’ with the UK, you can claim tax relief in the UK to avoid being taxed twice.

 

Tax on your UK income if you live abroad: Overview - GOV.UK (www.gov.uk)

[billd766]

1 hour ago, 2009 said:

Christ, they even tax pensions. Jesus wept.

Try researching the topic before commenting.

 

They tax income derived from UK sources only.

 

In addition as a UK citizen you are entitled pensions up to £12,570 tax free.

 

If you earn a pension through a foreign country HMRC will NOT tax it.

 

The country that you earned the pension in may or may not tax it depending on the tax free personal allowance that the country issues.

[billd766]

1 hour ago, Carrbhoy said:

Replies are not clear......some say as UK dervied income I pay UK tax only.........later replies are saying Thai Tax DTT does apply but I can claim tax credits from the UK for the pension dual payments.....I've asked for this to be clarified.

 

AFAIK being a UK taxpayer since 1959 my 3 pensions are only taxed as UK income sources and I pay no income tax in Thailand. Even when I worked offshore and transferred my salary to Thailand I paid no Thai income tax.

 

I suspect that a lot depends on the dual taxation agreements between Thailand and the other countries, and if you declare that income to the Thai authorities.

 

I also paid withholding tax on my income in the countries that I worked in.

[2009]

13 minutes ago, billd766 said:

Try researching the topic before commenting.

I did.

 

13 minutes ago, billd766 said:

 

They tax income derived from UK sources only.

 

In addition as a UK citizen you are entitled pensions up to £12,570 tax free.

What I said was right then, wasn't it?

 

They tax pensions. ????

[OJAS]

28 minutes ago, 2009 said:

They tax pensions. ????

Name me a country that doesn't. Why are you singling out the UK for demonisation?

 

[2009]

12 minutes ago, OJAS said:

Name me a country that doesn't. Why are you singling out the UK for demonisation?

 

I'm not ????

 

I was speaking about taxing pensions in general.

It just happens to be a UK thread. 

 

Doesn't really make it any better though if other countries do it.

 

I suppose you like tax.

 

 

Edited May 21, 2023 by 2009

[skorts]

2 hours ago, Carrbhoy said:

Thanks Skorts for the detailed reply. This is the position I want to be in.....I'll come back to you with any queries once I've had the opportunity to review the Taxcalc / UK Post box websites.

 

Happy to help Carrbhoy. I have BTL property in the U.K. too so after 5 years as U.K. Non-resident living in Thailand and five HRMC annual self-assessment submissions as a U.K. Non-resident  I am pretty familiar with the process. Likewise, with using U.K. Post Box. Please PM with any questions once you have had the opportunity to review things. 

[billd766]

36 minutes ago, 2009 said:

I did.

 

What I said was right then, wasn't it?

 

They tax pensions. ????

No. They tax the whole of your UK derived income and your pensions ONLY get taxed IF they exceed the £12,570 personal allowance.

 

 

AFAIK the personal allowance is applied to your pensions first and if they are under the limit, then the balance is applied to any other earned income.

 

https://www.gov.uk/new-state-pension/what-youll-get

 

The full new State Pension is £203.85 per week which is equal to £10,600.02 over 52 weeks..

 

If that is your sole income, then, NO you will not pay any income tax.

 

Please stop trying to be tricky and lay down exactly how much and what type of income is earned. State how many pensions and what amount is earned and then apply that against the personal allowance. If there is more than one pension and combined they pay more than the allowance, then the balance of the pensions will be taxed at 20%.

 

If there is only one pension and it is below the allowance, NO tax is payable on the pension.

 

I can explain it to you (as I have done several times), I can show you the links to follow, but I cannot understand it for you.

 

I cannot be bothered to answer any more of your posts, as I believe you are just trolling on a serious subject to a lot of posters.