Thai Tax on UK pensions

[JimGant]

1 hour ago, sandyf said:

Unless you can enlighten us with a valid reason on why the UK state pension would not be covered by the DTA, I will go by what the DTA actually says.

The DTA is completely silent on UK state pensions. And, as already shown, it is not a government pension in light of DTA language, which says the pension must be paid for services rendered to the govt.

 

So, not a whole lot of help from the DTA. In fact, the UK-Thai DTA doesn't even have an Article on "Other Income," as most other DTAs have, which addresses income not specifically addressed in any of the Articles. However the conclusion in the US Article on "Other Income" is that, "generally such income is taxable only in the country of residence." Not much positive help for Brits on their state pension, should their DTA have a "Other Income" Article with a similar conclusion.

[Chivas]

Never has there ever been any topic in this entire forum that requires a "wait and see" approach than this one

 

Dont red flag yourself at this point

[Captain Flack]

Off topic reported posts has been removed, this topic is about “Thai Tax on UK pensions”, if you wish to discuss tax on other income, or the US DTA, please start a new topic.

[CharlieKo]

1 hour ago, sometimewoodworker said:

The date of 2024 is not mine. 
do please read the complete post before making corrections to other people’s posts and claiming them to be from me.

Apologies!   

[david saunders]

I went to the Tax Department in Chiangmai two days ago. I was the only customer there and the English speaking official could not have been more helpful. I gave her a list of 5 questions I wanted answered. She gave me 4 answers but said she would give my paper to her boss and I would hear from them later this week. She took me to a non English speaking official who entered my Chiangmai address into her computer and replaced my Bangkok TAX ID with a Chiangmai one. There is nothing to lose by going to one's local Tax Department and having a chat. I will not be using a Tax Accountant when my local Tax Department is so helpful.

[Moonlover]

1 hour ago, Surasak said:

At present the UK DWP pension is not taxed in the UK. It could therefore be classed as taxable income by Thailand? The new thieves of the Labour party may well change this in their up coming budget, due Oct/Nov this year.

That is not correct. The state pension is not taxed at source. However if the recipient's income exceeds the personal tax free allowance of £12,570 then it will be subject to tax.

 

I know. this for sure. I pay tax on mine.

[Unamerican]

1 hour ago, Surasak said:

2 hours ago, sandyf said:

At present the UK DWP pension is not taxed in the UK.

Mine is! (as I have large SERPS extras).

Just not “at source”:

the tax (a lot!) is collected by deductions (paye) on other income sources.  

[Guderian]

Here's a copy of the 1981 UK-Thailand double taxation treaty, which I believe is still the version in force. As you can see, it's mainly related to business activities of one sort or another. I guess 40-odd years ago, the small number of British pensioners living in Thailand at the time didn't merit much consideration.

 

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

 

[KannikaP]

17 minutes ago, Moonlover said:

That is not correct. The state pension is not taxed at source. However if the recipient's income exceeds the personal tax free allowance of £12,570 then it will be subject to tax.

 

I know. this for sure. I pay tax on mine.

So you are correctly saying that the UK State Pension does not come over the 12570 tax free limit = 241 per week. But you are taxed on any extra income which tips it over that limit.

[Moonlover]

2 hours ago, nong38 said:

 I was looking at TNT 9(Tim Newton Today ) on youtube yesterday and for the edition of July 5th he quotes an article in the Pattaya newspaper, it might be worth going and having a look at this. The article says that pensions will not be taxed in Thailand and also that any money brought into Thailand before 31st December 2024 i will also not be taxed. We were waiting for clarification in July is this what we were waiting for?

I haven't looked at this article, (not yet) but I have come across 3 references that suggest that us pensioners need not be concerned about this new ruling.

 

Neither are authoritative but they are clear indicators. 

 

You'll find them here here and here

[Satcommlee]

5 hours ago, Thingamabob said:

Before spending money on professional advice, or worrying over much, wait until the situation clarifies. 

 

Best advice so far,  but do plan for the worst, don't get caught short when returns are due in March 2025, as late payment can be costly.

 

Worst case for you on 80k a month would be 75K annual tax bill, payable in 3 x 25K installments March 25, April 25, May 25.

 

Maybe a bit less if you have wife/kids/insurances. And of course a credit on proof of tax being paid in UK.

 

I'm not saying this will be the case, but it is at least a worst case!

 

 

[Satcommlee]

5 hours ago, Thingamabob said:

 

 

 

 

[hotandsticky]

2 hours ago, topt said:

see my post above - he is wrong.

 

 

I guessed that........😉

[sandyf]

3 hours ago, Surasak said:

You are quite correct in that BobKK. It is classed as  benefit. Which is why successive governments of the past 70+ years, refuse to increase them to certain countries.

That is to do with the Social Security Act,  not the DTA.

Only a certain mentality would believe that when the DTA was drawn up that the UK would give up the right to be the sole beneficiary of the tax collected on the UK state pension.

[sandyf]

3 hours ago, hotandsticky said:

 

 

Just for completeness could you please quote the DTA reference on UK state pension.

2nd post on this thread.

[Mike Teavee]

State Pensions:-

1. Are not considered a Government Pension, these are things like Civil Service & Military etc, not the pension of your average Joe. 
2. Are taxed, it's just that they're the 1st thing that's added to your total income so are covered by your Personal Allowance which is considered taxed at 0%.  

All of that is irrelevant to the OP though as the UK tax he's paying on the equivalent of 80K THB pm would be higher than what he would owe in Thailand & the DTA means he can offset UK Tax on income so nothing to pay. 

 

I did the maths on 84K pm for somebody who only had the 60K personal allowance & 100K "Expense" allowance & it came to <1,000 THB owed, the fact that his military pension is not Taxable in Thailand means that he's way below the point where he would owe Tax here even without his other allowances (e.g. the 195K > 65 allowance). 

 

[Mike Teavee]

Just now, sandyf said:

That is to do with the Social Security Act,  not the DTA.

Only a certain mentality would believe that when the DTA was drawn up that the UK would give up the right to be the sole beneficiary of the tax collected on the UK state pension.

The UK has 1st dibs on taxing State Pension (but as it's below the basic personal allowance doesn't get anything from it) so they're not giving up any rights.  I'm sure if they were to update the DTA today, State Pension would be exempt but as things stand it is considered Assessable Income in Thailand.   

[sandyf]

3 hours ago, sometimewoodworker said:

The only mention of pensions in the UK/THAILAND DOUBLE TAXATION CONVENTION is in Article 19 Governmental Services  section 2 a 

Do note that anything not explicitly defined and written in the DTC is not covered by the DTC

 

The misunderstanding that the U.K. state pension is governed by the DTC is yours and your misreading or misunderstanding of what is written 

 

NB that does not apply to Thai citizens living in Thailand 

 

The statement "Any pension paid by the Contracting State" is  followed by the word "or"

 

Are we to take it that you are stating quite categorically that the UK state pension is not a pension or not paid by the state.

[sandyf]

3 hours ago, Surasak said:

At present the UK DWP pension is not taxed in the UK. It could therefore be classed as taxable income by Thailand? The new thieves of the Labour party may well change this in their up coming budget, due Oct/Nov this year.

You need to understand the difference between " not taxed at source" and "not taxable".

[OJAS]

3 hours ago, sandyf said:

Unless you can enlighten us with a valid reason on why the UK state pension would not be covered by the DTA, I will go by what the DTA actually says.

 

I strongly suspect that the most valid reason on why the UK State Pension would not be covered by the DTA is that there is no Article specifically mentioning it in the DTA!

[sandyf]

2 hours ago, topt said:

I think any lack of understanding on this is yours. Been discussed more times than I care to remember.

Have a look in the digest link below and go to page 34 - Thailand - and read note 4 on the far right hand side.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/710099/DT_Digest_April_2018.pdf

This statement from your link is fairly clear, "It" being the state pension.

" It is based on National Insurance contributions (NICs) and relief from UK income tax is available under the terms of many, but not all, double taxation treaties. "

 

Why didn't you post the link that states Thailand is not one of the "many"?

[sandyf]

2 hours ago, Unamerican said:

So please tell us what the DTA does say about U.K. income! 

Why not read the 2nd post on this thread.

[sandyf]

2 hours ago, JimGant said:

And, as already shown, it is not a government pension in light of DTA language, which says the pension must be paid for services rendered to the govt.

I never said it was a government pension, I said it was a pension paid by the government.

Obviously you never bothered to read that.

The DTA does not say " the pension must be paid for services rendered to the govt."

That statement comes after the word "or".

[sandyf]

2 hours ago, Unamerican said:

Mine is! (as I have large SERPS extras).

Just not “at source”:

the tax (a lot!) is collected by deductions (paye) on other income sources.  

Be careful posting, your post appears as a misquote.

I accept it is easily done.

[sandyf]

20 minutes ago, Mike Teavee said:

The UK has 1st dibs on taxing State Pension (but as it's below the basic personal allowance doesn't get anything from it) so they're not giving up any rights.  I'm sure if they were to update the DTA today, State Pension would be exempt but as things stand it is considered Assessable Income in Thailand.   

Your are wrong.  The state pension is taxable, not at source but lumped with other income to determine liability.

Why haven't you backed up this claim.

" but as things stand it is considered Assessable Income in Thailand."

Many seem to think they know the answers, but reluctant to substantiate.

[topt]

11 minutes ago, sandyf said:

This statement from your link is fairly clear, "It" being the state pension.

" It is based on National Insurance contributions (NICs) and relief from UK income tax is available under the terms of many, but not all, double taxation treaties. "

 

Why didn't you post the link that states Thailand is not one of the "many"?

I have no idea why you are deflecting - I pointed you to a specific place in that document that states -

Quote

4. Treaty does not include an article dealing with DT-Company Non-Government pensions. Also, no relief for State Pension or ‘trivial commutation lump sum’.

In case you have forgotten this was in reply to this post of yours -

Quote

Unless you can enlighten us with a valid reason on why the UK state pension would not be covered by the DTA, I will go by what the DTA actually says.

I have seen many non UK nationals make various misinformed comments regarding the state pension,  this being a common one. I just put it down to a lack of understanding.

 

[sandyf]

19 minutes ago, OJAS said:

 

I strongly suspect that the most valid reason on why the UK State Pension would not be covered by the DTA is that there is no Article specifically mentioning it in the DTA!

The DTA states

"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."

 

The term  "Any pension" appears fairly clear to me and I fail to understand why so many are looking for reasons why they should be taxed..

[OJAS]

4 hours ago, sometimewoodworker said:

First you need to state the £ value of your state pension is, it may or may not be above the U.K. personal allowance so you may or may not be paying U.K. tax on it. If taxed then the U.K. tax offsets the Thai tax. However your military pension may also be taxed in the U.K. (I don’t know if they are) however if it is taxed you cannot offset that against Thai taxes as the military pension is not assessable income in Thailand, so equally U.K. tax on that is not claimable against that tax

 

In the case of the State Pension I don't believe that there is (unfortunately) any way of avoiding double taxation through UK offsets of Thai tax. In support of this view, I would refer to this statement in relation to the State Pension at the top of page 3 of HMRC's Digest of DTA's:

 

"..relief from UK income tax is available under the terms of many, but not all, double taxation treaties."

 

and then to this one specifically relating to Thailand on page 34:

 

"...no relief for State Pension.."

 

https://assets.publishing.service.gov.uk/media/5b05425fed915d1317445ed2/DT_Digest_April_2018.pdf

 

When it comes to  @Humpy's military pension I would have thought it unlikely that the issue of Thai taxes would arise since this is non-assessable income which, as things stand (i.e. subject to any clarification issued by the TRD in due course, along with (presumably) their 2024 forms), would not need to be declared in any TRD return. This is certainly the line I'm currently, at least, planning to take in the case of my Civil Service pension.

 

[OJAS]

13 minutes ago, sandyf said:

The DTA states

"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."

 

The term  "Any pension" appears fairly clear to me and I fail to understand why so many are looking for reasons why they should be taxed..

 

So precisely "what services of a governmental nature rendered to that (Contracting) State or subdivision or local authority thereof" have been provided by State Pensioners as a prerequisite to their receiving the State Pension? I await your reply with bated breath!

[JimGant]

15 minutes ago, sandyf said:

The term  "Any pension" appears fairly clear to me and I fail to understand why so many are looking for reasons why they should be taxed..

Because what comes after "any pension" is thus:    ... 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."

 

What is you don't get about the "in respect of services of a govt nature rendered to that State....?"

 

State pensions AREN't paid for govt services rendered, like would be a military or civil service pension. Thus, the DTA does NOT address State pensions. Period.