UK Double Taxation agreement with Thailand? How to prove Wise transfers are UK pension payments?

[cliveshep]

No doubt of interest to many UK expats who live here pretty much permanently. In view of the recent tax bombshell by this new Government here that incoming money will be taxed, I assume this includes pension remittances. Now my pension is paid into my UK bank, being a UK pension it is pretty poor anyway compared to many. I use Wise to transfer it directly to my Bangkok Bank account. Gives me a steady thb30,000 a month, the balance remains in the UK as savings for big items when I then transfer it here. Given that my wife and I live simply that is sufficient for a comfortable existence for us although getting a bit tight these days.

 

My question here:

 

Thailand and the UK have a Double Taxation Agreement, my pension is taxed at source although given the relatively small amount tax is zero. So in principle the Thai Government should ignore it. But - the provenance of transfers is probably obscured using Wise so if I need to how can I show that these monthly amounts are my already-taxed pension monies? This assumes that the Thai Government actually honour the agreement in the first place of course.

 

Does anyone know if I'll need to show where it comes from as it is less than the Thai average income amount anyway? Information on this proposed tax seems scarce, does it have a level  after which it is taxed or is it a blanket tax for all incoming monies?

[The Cyclist]

Get your pension paid direct to a Thai bank and your P60's sent to your Thai address and save yourself a lot of potential hassle.

 

Or do nothing and wait and see what happens next year, when things hopefully become clearer.

[cliveshep]

I'll leave things the way they are I think, not stirring anything up with the Dept of Pensions. 

 

Just need to figure out how to get Wise to show the transfers come from my UK bank, my UK bank statement will show clearly where payments in come from and go to. Come to that the Statement clearly shows DWP payments in and Transferwise payments out and no other transactions month on month.

[The Cyclist]

3 minutes ago, cliveshep said:

'll leave things the way they are I think, not stirring anything up with the Dept of Pensions

 

Up to you as the Thais are fond of saying.

 

I would rather change banking details and the small amount of effort that goes into that, than potentially  have a much bigger discussion with the Thai tax authority.

 

Your pension, you make the decision on what you think is best for you.

[CartagenaWarlock]

Just now, cliveshep said:

Gives me a steady thb30,000 a month

How much does a Thai pay in taxes on a steady 30K income? You are guaranteed to not pay more than that. Why not cough up more to Thailand for giving you a life and possibly a bride, which you could not have gotten in your home country?

[Mike Lister]

There would be ,zero tax due per year on a UK pension equally to 30k baht per month. Potentially even less or nothing, based on your circumstances. You are allowed a personal allowance of 60k, an over 65 allowance of 190k plus the first 150k after that is zero rated. That means you can earn 400k baht before tax kicks on at 5 percent, on the next 150k.

Edited November 26, 2023 by Mike Lister

[wildpuppet72]

They dropped this already didn't they

[The Cyclist]

26 minutes ago, CartagenaWarlock said:

Why not cough up more to Thailand

 

Why would anyone pay Thai income tax on money that has already been taxed in their home Country.

 

That argument would hold up if there was a method / option of not paying tax in your home Country and paying tax in Thailand instead.

 

For someone on Baht 30,000 a month, that Thai tax might be nil or peanuts, but that nil / peanuts figure does not apply tp everyone.

[CartagenaWarlock]

Just now, The Cyclist said:

Why would anyone pay Thai income tax on money that has already been taxed in their home Country.

I don't think pension incomes are taxed. Government or private  pension contributions are not added to your income for the purpose of collecting taxes, at least that is what the US SS is.  

Edited November 26, 2023 by CartagenaWarlock

[The Cyclist]

Just now, CartagenaWarlock said:

I don't think pension incomes are taxes. 

 

Well you thought wrong ( UK ) no idea about other Countries.

[cliveshep]

18 minutes ago, Mike Lister said:

There would be ,zero tax due per year on a UK pension equally to 30k baht per month. Potentially even less or nothing, based on your circumstances. You are allowed a personal allowance of 60k, an over 65 allowance of 190k plus the first 150k after that is zero rated. That means you can earn 400k baht before tax kicks on at 5 percent, on the next 150k.

Well, that is really good info, I already worked out that if I transferred all my pension over based von the tax tables posted earlier I would be liable for 87 baht a month tax IF the Thai Government reneged on the DTA. So for me I guess nothing to worry

about, thanks all!

[Celsius]

20 years ago when I joined the forums trying to do research about moving to Thailand some of the most popular threads were "how to survive on 30k a month in Thailand".

 

It is cool that people are still able to do this while everything pretty much tripled in price.

 

 

[CartagenaWarlock]

Just now, The Cyclist said:

Well you thought wrong ( UK ) no idea about other Countries.

Do you mean that when you are working and contributing to your pension, your pension contributions are taxed? In the US, all contributions are deducted from your total income to arrive at your tax obligations. When you retire, you pay taxes on withdrawals and payments, depending on your circumstances.

[proton]

How would inheritance be taxed? Lets say I died and had 6 million baht in a UK bank that I left to the wife would that mean the Thais would want a large chunk of that when transferred into her account?

[The Cyclist]

2 minutes ago, CartagenaWarlock said:

Do you mean that when you are working and contributing to your pension, your pension contributions are taxed? In the US, all contributions are deducted from your total income to arrive at your tax obligations. When you retire, you pay taxes on withdrawals and payments, depending on your circumstances.

 

No

 

I mean when you retire in the UK and you have income above £12570 a year then that income is taxed, which includes pensions, part time work, investments or any other manner of income that is derived in the UK.

 

Taxed till the day you die even if you live overseas.

[Dan O]

19 minutes ago, CartagenaWarlock said:

Do you mean that when you are working and contributing to your pension, your pension contributions are taxed? In the US, all contributions are deducted from your total income to arrive at your tax obligations. When you retire, you pay taxes on withdrawals and payments, depending on your circumstances.

In the US most pensions,, especially SS benefits are excluded from taxation by Thailand or other countries under the DTA's. People really need to read their countries DTA and stop all the useless speculation without knowing the facts. 

[foreverlomsak]

3 minutes ago, Dan O said:

In the US most pensions,, especially SS benefits are excluded from taxation by Thailand or other countries under the DTA's. People really need to read their countries DTA and stop all the useless speculation without knowing the facts. 

In the UK DTA, Government (i.e. civil service and local government) Pensions are mentioned as being able to obtain a partial refund from HRMC if taxed in both countries, State and private pensions are not addressed in any form, so your guess is as good as mine on which way they will jump.

Until more clarity on my tax situation is available I'm not taking any more funds to Thailand after 1st Jan 2024.

[Tom H]

Tax information is an obligation to provide and, similarly in other countries, must only be proven to be correct upon request. Failure to comply will result in penalties of up to three times the tax liability.

[blackcab]

2 hours ago, CartagenaWarlock said:

How much does a Thai pay in taxes on a steady 30K income?

 

2,500 baht per year, using standard allowances and deductions.

[NoshowJones]

2 hours ago, cliveshep said:

No doubt of interest to many UK expats who live here pretty much permanently. In view of the recent tax bombshell by this new Government here that incoming money will be taxed, I assume this includes pension remittances. Now my pension is paid into my UK bank, being a UK pension it is pretty poor anyway compared to many. I use Wise to transfer it directly to my Bangkok Bank account. Gives me a steady thb30,000 a month, the balance remains in the UK as savings for big items when I then transfer it here. Given that my wife and I live simply that is sufficient for a comfortable existence for us although getting a bit tight these days.

 

My question here:

 

Thailand and the UK have a Double Taxation Agreement, my pension is taxed at source although given the relatively small amount tax is zero. So in principle the Thai Government should ignore it. But - the provenance of transfers is probably obscured using Wise so if I need to how can I show that these monthly amounts are my already-taxed pension monies? This assumes that the Thai Government actually honour the agreement in the first place of course.

 

Does anyone know if I'll need to show where it comes from as it is less than the Thai average income amount anyway? Information on this proposed tax seems scarce, does it have a level  after which it is taxed or is it a blanket tax for all incoming monies?

The level it is taxed has not been decided yet as far as I know.

[Raindancer]

2 hours ago, cliveshep said:

No doubt of interest to many UK expats who live here pretty much permanently. In view of the recent tax bombshell by this new Government here that incoming money will be taxed, I assume this includes pension remittances. Now my pension is paid into my UK bank, being a UK pension it is pretty poor anyway compared to many. I use Wise to transfer it directly to my Bangkok Bank account. Gives me a steady thb30,000 a month, the balance remains in the UK as savings for big items when I then transfer it here. Given that my wife and I live simply that is sufficient for a comfortable existence for us although getting a bit tight these days.

 

My question here:

 

Thailand and the UK have a Double Taxation Agreement, my pension is taxed at source although given the relatively small amount tax is zero. So in principle the Thai Government should ignore it. But - the provenance of transfers is probably obscured using Wise so if I need to how can I show that these monthly amounts are my already-taxed pension monies? This assumes that the Thai Government actually honour the agreement in the first place of course.

 

Does anyone know if I'll need to show where it comes from as it is less than the Thai average income amount anyway? Information on this proposed tax seems scarce, does it have a level  after which it is taxed or is it a blanket tax for all incoming monies?

It is very simple to do,  although I think people are unnecessarily panicking over the " rumour mill" of what will and will not happen.. on this issue.

 

Log onto your government profile.          Head to the income tax  heading.  There you will find your income, your tax number and tax paid on all income, including pensions.   Print it out.   https://www.google.com/url?q=https://www.gov.uk/&sa=U&ved=2ahUKEwiP0P_z-eCCAxXRTmwGHaikAvwQFnoECAYQAg&usg=AOvVaw2Z6wr8NQItbp3UnjtXGarX

 

Now copy your P60, which shows income and tax paid on a monthly basis.

 

Your UK bank statement will verify your pension receipts and wise transfers will corroborate the legality of the transfer from pension funds.

 

If, and I mean, if you need to prove pension income, you now have the method to do so.

 

[TroubleandGrumpy]

Firstly - it may be a problem and it may not.  Hopefully we will find out it is not an issue over the coming months.

 

What I have done, in order to prepare for this potential problem, is to put my pension payments into a bank account that has no other incoming or outgoing money. I have another home country bank account or two for all other things.

 

My plan is to (from 1 Jan 2024) only transfer money from there to my Wise account each month. I will then transfer that exact same amount of money from Wise into my Thai Bank account - which is the only bank account I will use for that purpose (use another Thai bank account for other things).

 

That means I will be able to generate reports from my bank records showing the same exact XYZ amount put in as my Pension, XYZ amount transfered to Wise, XYZ amount converted at current Baht exchange rate and transferred to my Thai Bank account, XYZ/Converted incoming to my Thai bank account.  I cannot see any other way to 'prove' that the money is my pension money - other than getting the Govt to send my pension directly to my Thai bank account - which would incur very high fees at very poor exchange rates.

 

If this goes ahead and all remitted monies, including pensions, are determined to be 'taxable income', unless you can prove otherwise, then I cannot see any other way. But it is the Thai RD who would have to accept those bank statements as proof - wehich I have no idea if they will.  That also means that lodging a tax return would be compulsory if you receive money remitted into Thailand over 150K in a year (the tax free threshold). 

 

Hopefully, the Thai RD will provide clear exemptions and allowances, and hopefully they will state that lodging a tax return is not required if you have no income taxes to pay. But I am planning what to do in case that does not occur, and I am liable for income taxes, and I must lodge a tax return. It would be wise for others to do the same - if only just to get the name and number of a reliable registered tax accountant. 

[TroubleandGrumpy]

42 minutes ago, blackcab said:

 

2,500 baht per year, using standard allowances and deductions.

Not my understanding. What allowances and deductions are you applying?

360K equates to 13,450 Baht in income tax.

150K = zero

150 to 300 (5%) = 7450

300 to 360 (10%) = 6000

[TroubleandGrumpy]

36 minutes ago, Raindancer said:

It is very simple to do,  although I think people are unnecessarily panicking over the " rumour mill" of what will and will not happen.. on this issue.

 

Log onto your government profile.          Head to the income tax  heading.  There you will find your income, your tax number and tax paid on all income, including pensions.   Print it out.   https://www.google.com/url?q=https://www.gov.uk/&sa=U&ved=2ahUKEwiP0P_z-eCCAxXRTmwGHaikAvwQFnoECAYQAg&usg=AOvVaw2Z6wr8NQItbp3UnjtXGarX

Now copy your P60, which shows income and tax paid on a monthly basis.

Your UK bank statement will verify your pension receipts and wise transfers will corroborate the legality of the transfer from pension funds.

If, and I mean, if you need to prove pension income, you now have the method to do so.

I am not syaing you are wrong - but that might you might not be correct. I do not know the UK system, but a similar thing is available in Australia - but it is not that useful in Thailand.  The Thai tax year is from Jan 1 to Dec 31 - both UK and Aust do not line up with those dates with their annual 'reports' which usually coincide with their tax years (June to July and April to April).  Unless UK provides those reports from any date to any date, they will not match the Thai tax year and that is an issue.  They will not provide Jan-Dec reports in Aust, because as I was advised, that would create a lot of work and huge costs, because people will demand reporting on all sorts of dates (true).   

[Everyman]

3 hours ago, CartagenaWarlock said:

How much does a Thai pay in taxes on a steady 30K income? You are guaranteed to not pay more than that. Why not cough up more to Thailand for giving you a life and possibly a bride, which you could not have gotten in your home country?

 

Paying 7% VAT on all purchases and 100% tax on alcohol is sufficient to satisfy the instinct to reward Thailand with tax money. 

[Mike Lister]

1 hour ago, blackcab said:

 

2,500 baht per year, using standard allowances and deductions.

Not do, standard deductions and allowances for San over 65 year old total 400k hence tax is zero

 

[billd766]

4 hours ago, cliveshep said:

No doubt of interest to many UK expats who live here pretty much permanently. In view of the recent tax bombshell by this new Government here that incoming money will be taxed, I assume this includes pension remittances. Now my pension is paid into my UK bank, being a UK pension it is pretty poor anyway compared to many. I use Wise to transfer it directly to my Bangkok Bank account. Gives me a steady thb30,000 a month, the balance remains in the UK as savings for big items when I then transfer it here. Given that my wife and I live simply that is sufficient for a comfortable existence for us although getting a bit tight these days.

 

My question here:

 

Thailand and the UK have a Double Taxation Agreement, my pension is taxed at source although given the relatively small amount tax is zero. So in principle the Thai Government should ignore it. But - the provenance of transfers is probably obscured using Wise so if I need to how can I show that these monthly amounts are my already-taxed pension monies? This assumes that the Thai Government actually honour the agreement in the first place of course.

 

Does anyone know if I'll need to show where it comes from as it is less than the Thai average income amount anyway? Information on this proposed tax seems scarce, does it have a level  after which it is taxed or is it a blanket tax for all incoming monies?

When my pensions are transferred to Wise, each payment is listed as a source to say where it comes from. 

 

Yo can download this information from the Wise list of transactions which should be good enough.

 

Alternatively, you could contact your pension provider(s) and ask for a letter stating that it is a pension payment, though that would be a lot harder to get hold of.

[billd766]

I have found this link

 

 https://www.mazars.co.th/Home/Insights/Doing-Business-in-Thailand/Payroll/Personal-Income-Tax

 

Though how accurate it is I have no idea.

 

Tax rates
The tax rates in 2023 for employment income and hire of work are as follows:

Taxable income (Baht)

Tax rate %

1-150,000                          Exempt

150,001-300,000              5%

300,001-500,000             10%

500,001-750,000              15%

750,001-1,000,000           20%

1,000,001-2,000,000        25%

2,000,001-5,000,000       30%

5,000,001 and over          35%

 

Allowances
The amount of assessable taxable income is net of allowances:

Type of Allowance

Amount

Deductible expenses for income

50% of income                           (capped at 100,000 baht)

Personal allowance                    60,000 baht

Spouses (with no income)         60,000 baht

 

Child (with income not exceeding 30,000 baht)

(Under 20 years of age, regardless of whether he is studying; or under 25 years of age, but he must be studying at a university, either in Thailand or abroad.

 

There is no limit on the number of natural children that can be claimed, but there is a limit of three when claiming adopted children.)

 

30,000 baht per child

Second child born from 2018 onwards

(Same criteria as for “Child Allowance” above)

 

60,000 baht per child    

Health insurance premiums paid by the taxpayer*

Amount actually paid, but not exceeding 25,000 baht

Life insurance premiums paid by the taxpayer*

Amount actually paid, but not exceeding 100,000 baht

Provident Fund contributions (PVF) **

Up to a maximum of 500,000 baht, but not exceeding 15% of income

Retirement mutual fund (RMF) **

Up to a maximum of 500,000 baht, but not exceeding 30% of income

Super Saving Fund (SSF) **

Up to a maximum of 200,000 baht, but not exceeding 30% of income

Home mortgage interest

Amount actually paid, but not exceeding 100,000 baht

Charitable contributions

Amount actually donated, but not exceeding 10% of income after standard deductions and allowances.

There is a double deduction allowed for donations to educational organizations, but not exceeding 10% of income.

[Raindancer]

22 minutes ago, billd766 said:

When my pensions are transferred to Wise, each payment is listed as a source to say where it comes from. 

 

Yo can download this information from the Wise list of transactions which should be good enough.

 

Alternatively, you could contact your pension provider(s) and ask for a letter stating that it is a pension payment, though that would be a lot harder to get hold of.

Wise transactions to Thai bank only show money was received from UK.   Which some people need as FTT to provide immigration with evidence of the income method for an annual extension of stay.

 

Wise transfers do not show source  I.e pension funds.

 

As I stated in an earlier reply:  all income tax and pensions from UK, can be obtained from govt website 

Edited November 26, 2023 by Raindancer

[norbra]

For what it's worth. My monthly Wise transfers for purpose of long stay in Thailand are sent to my Kasikorn bank account, Kasikorn Bank show purpose of transaction is for "Travel expenses Tourism."

No mention of income.

Funds are sent from my Australian bank account