Thai Tax on UK pensions

[jwest10]

On 8/1/2024 at 8:50 AM, Raindancer said:

I am in the same boat:

But my total allowances according to the table produced by @Mike Lister, provide 560k per year.

 

Therefore as my UK state pension is below that, I have no tax to pay. 

 

My military pension, according to the TRD is exempt, therfore, I  still have no income tax to pay.

 

I hope that reassures you.

We still not know if we have to lodge a tax form but wait until later on the year and forms are due to be printed Oct/Nov

[rocketboy2]

23 minutes ago, jwest10 said:

We still not know if we have to lodge a tax form but wait until later on the year and forms are due to be printed Oct/Nov

 

 I'm sure when / if, these new forms show up.

They will make everything as clear as mud.

But there appearance or lack of it, will spawn another 10 threads and 300 pages of reading material, or toilet paper, depending on how you see it.

I very much doubt they will get the act together.

They will be happy for the people to just pony up and pay what ever.

Win, Win

See ya all here, end of November time. 

TIT.

 

 

Edited August 2 by rocketboy2

[Mason45]

On 7/31/2024 at 3:06 PM, Humpy said:

I have a State and a Military pension totalling Baht 80,000 a month. What Thai Tax will I have to pay ? 

What, were you a field marshall?

[Mason45]

On 7/31/2024 at 3:45 PM, BobBKK said:

 
Are you 100% sure, Sandy? Bizarrely, the state pension is not classified as a government pension.

Do you guys really believe that our Governments are going to pass on our personal information to some bozo in Thailand.

[BobBKK]

4 minutes ago, Mason45 said:

Do you guys really believe that our Governments are going to pass on our personal information to some bozo in Thailand.

 No, but will they see our pensions coming into bank accounts?

[sandyf]

22 hours ago, Mike Teavee said:

You seem to be the only person that believes that & as several of us have posted information (including links to the DTA & Expat Tax companies) that says it's not true we'll have to agree to disagree, it's been argued enough in the other threads already.. 

I did acknowledge an alternative interpretation which you would have seen on my 2nd post.

However I don't see why anyone would feel compelled to try and prove a worst case scenario, unless of course they had a vested interest.

Taxation is a personal issue and I for one am not going to volunteer may state pension as taxable income unless someone with the authority to do so says otherwise. By the same token others are free to take any action they feel appropriate.

if it came to pass I never had to pay any tax I wouldn't assume vindication, just that you don't have to be a Lemming. 

[chiang mai]

1 hour ago, BobBKK said:

 No, but will they see our pensions coming into bank accounts?

All remittances from overseas are reported to the BOT, if tax is withheld on those remittances then that is reported to TRD. 

[Mike Teavee]

2 hours ago, sandyf said:

I did acknowledge an alternative interpretation which you would have seen on my 2nd post.

However I don't see why anyone would feel compelled to try and prove a worst case scenario, unless of course they had a vested interest.

Taxation is a personal issue and I for one am not going to volunteer may state pension as taxable income unless someone with the authority to do so says otherwise. By the same token others are free to take any action they feel appropriate.

if it came to pass I never had to pay any tax I wouldn't assume vindication, just that you don't have to be a Lemming. 

Nobody is trying to "Prove a Worse Case Scenario" we're just trying to explain the facts & if you believe differently then that's up to you.... I don't believe you'll get caught either but that doesn't mean that you're vindicated, it just means you got away with it & unless you're remitting >100K pm you're getting away with nothing as you wouldn't owe any tax anyway so it doesn't make sense not to include it IF you're filing a return anyway.

 

 

FWIW, I have no facts to back this up but honestly believe we'll see them giving a "Pass" to people who are only remitting pension income from countries like the UK where they know they've already been taxed (& I count the State Pension as already taxed albeit at 0%) & a DTA can be used to offset tax already paid against what's owed in Thailand but until then State Pensions are assessable income.    

Edited August 2 by Mike Teavee

[Mike Teavee]

1 hour ago, Mike Teavee said:

I don't believe you'll get caught either but that doesn't mean that you're vindicated, it just means you got away with it & unless you're remitting >100K pm you're getting away with nothing as you wouldn't owe any tax anyway

Apologies I know it's bad form to quote yourself but out of curiosity I ran the numbers on a few scenarios & was surprised to learn that only people remitting Assessable (Non-Gov) UK pension incomes (NB I'm only doing the calcs on UK pensions as that's the topic of this thread) of approx. 42-49K pm would have any Thai Tax owing, below this & your TEDA + 150K @ 0% would cover you, above this and the Tax you've already paid in the UK more than covers any Thai tax due.

 

Basic assumptions, a Single person, over state pension age so has 355K TEDA (60K personal allowance + 195K >65 allowance + 100K allowance for "Expenses") and £1 = 45THB.

 

50K pm Income...

• Remitted income -  600,000 
• Taxable Income after 355K allowance = 245K 
• Tax due = 150K * 0%, + 95K * 5% = 4,750 Thai Tax
• UK Tax already paid on £13,333.34 = £150.87 = 6,789 THB which can be offset against the 4,750 to leave no tax liability.

65K pm Income...

• Remitted income -  780,000 
• Taxable Income after 355K allowance = 425K 
• Tax due = 150K * 0%, + 150K * 5% + 125K * 10% = 20K Thai Tax
• UK Tax already paid on £17,333.34 = £950.87 = 42,789 THB which can be offset against the 20K to leave no tax liability. 

100K PM  Income

• Remitted income -  1,200,000 
• Taxable Income after 355K allowance = 845K 
• Tax due = 150K * 0%, + 150K * 5% + 200K * 10% + 250K * 15% + 95K * 20% = 84K Thai Tax
• UK Tax already paid on £26,666.67  = £2,817.53 = 126,788 THB which can be offset against the 84K to leave no tax liability.

500K PM  Income

• Remitted income -  6,000,000 
• Taxable Income after 355K allowance = 5,695,000 
• Tax due = 150K * 0%, + 150K * 5% + 200K * 10% + 250K * 15% + 250K * 20% + 1,000,000 * 25% + 3,000,000 * 30% + 645K * 35% = 1,490,750 Thai Tax
• UK Tax already paid on £133,333.34  = £46,203 =  2,079,135 THB which can be offset against the 1,490,750 to leave no tax liability.

 

... Obviously as you get higher numbers you're taxed 45% in the UK Vs 35% in Thailand so the difference between what you pay in the UK will be even greater than what you would owe in Thailand

 

Edit: And this is why I believe TRD will end up giving a "Pass" to things like UK Pension income as they know the effort involved in processing every return isn't worth the small amount (<3K) they would get from the guys in the 42-49K pm range. 

Edited August 2 by Mike Teavee

[topt]

15 hours ago, Mike Teavee said:

I ran the numbers

Apologies Mke but just for accuracy what figure did you use for the PA as I get a couple of pounds difference to your UK tax paid numbers?

Thanks 

[Phulublub]

On 7/31/2024 at 3:32 PM, sandyf said:

None.

From Article 19 of the DTA.

(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. 

Wrong.  The UK State Pension is classed as Assessable Income for thai tax purposes.  Article 19 for the DTA is inapplicable here.

 

See https://www.gov.uk/state-pension-if-you-retire-abroad/tax-on-your-state-pension#:~:text=Overseas residents,tax on your pension once.

Overseas residents

You may be taxed on your State Pension by the UK and the country where you live. If you pay tax twice, you can usually claim tax relief to get all or some of it back.

If the country you live in has a ‘double taxation agreement’ with the UK, you’ll only pay tax on your pension once. This may be to the UK or the country where you live, depending on that country’s tax agreement.

In the specific case of the OP, it is highly unlikely he will have any Thai liability sicne his military pension is not applicable income and he will already have paid tax on his UK state pensiion.

 

PH

 

 

[Mike Teavee]

1 hour ago, topt said:

Apologies Mke but just for accuracy what figure did you use for the PA as I get a couple of pounds difference to your UK tax paid numbers?

Thanks 

I used HMRC "Estimated Take Home Pay" calculator... https://www.tax.service.gov.uk/estimate-paye-take-home-pay/your-pay which has the 2024/25 personal allowance at £12,570...

 

Using the 65K pm / £17,333.34 pa example... 

 

 

 

[No NI to pay as I clicked the link saying "Over the State Pension age"]

 

[Dionigi]

On 7/31/2024 at 4:20 PM, sandyf said:

Not quite sure what you are trying to say there. 

The state pension is a pension paid by the government and couldn't be seen in the same light as a government pension such as that paid to civil servents. The State Pension is funded directly from taxation, government pensions are funded from the budget of the appropriate government department.

If however you are picking up on the fact that the government would prefer to call it a benefit then a different issue.

It would really depend on who is trying to say what, but I think it is fairly clear, all my correspondence comes from "The Pension Service".

At the end of the day it shouldn't really matter as tax has already been paid and the whole object of a DTA is to avoid tax being paid twice, being only taxable in the contracting state just simplifies things.

State pension is paid from national insurance contributions. According to Wikipedia the amount taken in is 18% of government revenue. Perhaps some is siphoned off?

[Unamerican]

On 8/1/2024 at 12:23 PM, KannikaP said:

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.

No, this is absolutely nothing to do with anything from the US OF A !!!!

[Unamerican]

4 minutes ago, Dionigi said:

State pension is paid from national insurance contributions. According to Wikipedia the amount taken in is 18% of government revenue. Perhaps some is siphoned off?

No it is not!  It is paid from general taxation.  The relationship to your NI contributions is only in the decision on whether you are paid a state pension and how much (but the latter is affected by many other factors too). 

[Unamerican]

On 8/2/2024 at 1:02 PM, Mason45 said:

What, were you a field marshall?

Doh! 

[helloagain]

On 7/31/2024 at 3:06 PM, Humpy said:

I have a State and a Military pension totalling Baht 80,000 a month. What Thai Tax will I have to pay ? 

You look at the tax agreement between your country and Thailand that will be your answer.

[Kalasin Jo]

On 7/31/2024 at 3:45 PM, BobBKK said:

 
Are you 100% sure, Sandy? Bizarrely, the state pension is not classified as a government pension.

Correct. Only UK government pensions for its former employees are covered. Not UK state , not private pensions.

 

Liz Truss would be fine then as she gets a fat pension from the UK government, I think it's around £135,000 pa for her disastrous 49 days as PM. She also held other government positions for ( slightly) longer which will also pay pensions.

[Unamerican]

2 minutes ago, helloagain said:

You look at the tax agreement between your country and Thailand that will be your answer.

But in our U.K. case this is not so: as others have detailed, the UK-Thailand has almost no information concerning personal income such as pensions (of which there are a large number of distinct types in the U.K.).

[Unamerican]

2 hours ago, Phulublub said:

Wrong.  The UK State Pension is classed as Assessable Income for thai tax purposes.  Article 19 for the DTA is inapplicable here.

 

See https://www.gov.uk/state-pension-if-you-retire-abroad/tax-on-your-state-pension#:~:text=Overseas residents,tax on your pension once.

Overseas residents

You may be taxed on your State Pension by the UK and the country where you live. If you pay tax twice, you can usually claim tax relief to get all or some of it back.

If the country you live in has a ‘double taxation agreement’ with the UK, you’ll only pay tax on your pension once. This may be to the UK or the country where you live, depending on that country’s tax agreement.

In the specific case of the OP, it is highly unlikely he will have any Thai liability sicne his military pension is not applicable income and he will already have paid tax on his UK state pensiion.

 

PH

 

 

Excellent summary!  Many thanks. 

[Unamerican]

19 hours ago, Mike Teavee said:

Apologies I know it's bad form to quote yourself but out of curiosity I ran the numbers on a few scenarios & was surprised to learn that only people remitting Assessable (Non-Gov) UK pension incomes (NB I'm only doing the calcs on UK pensions as that's the topic of this thread) of approx. 42-49K pm would have any Thai Tax owing, below this & your TEDA + 150K @ 0% would cover you, above this and the Tax you've already paid in the UK more than covers any Thai tax due.

 

Basic assumptions, a Single person, over state pension age so has 355K TEDA (60K personal allowance + 195K >65 allowance + 100K allowance for "Expenses") and £1 = 45THB.

 

50K pm Income...

• Remitted income -  600,000 
• Taxable Income after 355K allowance = 245K 
• Tax due = 150K * 0%, + 95K * 5% = 4,750 Thai Tax
• UK Tax already paid on £13,333.34 = £150.87 = 6,789 THB which can be offset against the 4,750 to leave no tax liability.

65K pm Income...

• Remitted income -  780,000 
• Taxable Income after 355K allowance = 425K 
• Tax due = 150K * 0%, + 150K * 5% + 125K * 10% = 20K Thai Tax
• UK Tax already paid on £17,333.34 = £950.87 = 42,789 THB which can be offset against the 20K to leave no tax liability. 

100K PM  Income

• Remitted income -  1,200,000 
• Taxable Income after 355K allowance = 845K 
• Tax due = 150K * 0%, + 150K * 5% + 200K * 10% + 250K * 15% + 95K * 20% = 84K Thai Tax
• UK Tax already paid on £26,666.67  = £2,817.53 = 126,788 THB which can be offset against the 84K to leave no tax liability.

500K PM  Income

• Remitted income -  6,000,000 
• Taxable Income after 355K allowance = 5,695,000 
• Tax due = 150K * 0%, + 150K * 5% + 200K * 10% + 250K * 15% + 250K * 20% + 1,000,000 * 25% + 3,000,000 * 30% + 645K * 35% = 1,490,750 Thai Tax
• UK Tax already paid on £133,333.34  = £46,203 =  2,079,135 THB which can be offset against the 1,490,750 to leave no tax liability.

 

... Obviously as you get higher numbers you're taxed 45% in the UK Vs 35% in Thailand so the difference between what you pay in the UK will be even greater than what you would owe in Thailand

 

Edit: And this is why I believe TRD will end up giving a "Pass" to things like UK Pension income as they know the effort involved in processing every return isn't worth the small amount (<3K) they would get from the guys in the 42-49K pm range. 

My interpretation (some time ago) of how the calculation of “tax paid in the U.K.” is done means that your calculation is correct *only when* you bring all your (taxable) income into Thailand.  

Edited August 3 by Unamerican
Typos! — more and more: apologies!

[Guderian]

A lot of people use the income route to prove they have the funds to apply for a visa extension based on retirement, though personally I've always kept 800K in a savings account and use that route. As I understand things, using the income route you have to prove to Immigration that the income arrives in Thailand from overseas every month. So why is it that the TRD have never, ever challenged someone using this route to prove that the 65K Baht/month coming in wasn't earned during the current tax year? Plenty of less well-off folk will have been moving their pension income to their Thai bank account as soon as it comes into their overseas account, so under the old rules that should have been taxable, yet the TRD as far as I'm aware has never even tried to do so. Now we have a small rule change so that all assessable remittances are taxable, subject to exemptions from the double-taxation treaties, and I don't really see why the TRD will put a huge amount of effort into trying to collect that money when they've shown zero interest in collecting potential pension taxes under the old rule. And as for the taxation treaties, I was reading elsewhere in an article that had nothing to do with Thailand that even HMRC in the UK usually has to resort to employing the services of specialist legal firms when a double taxation treaty is involved. If well-educated, well-trained and well-supported tax inspectors in the UK need to pay for specialist advice and interpretation, what chance is there of the average tax inspector in a Thai office knowing what it all means?

[Unamerican]

18 hours ago, Mike Teavee said:

Obviously as you get higher numbers you're taxed 45% in the UK Vs 35% in Thailand so the difference between what you pay in the UK will be even greater than what you would owe in Thailand

Ah yes: but how do I get to not pay the 45% to the U.K. (not that they do not need anything they can get from me, right now:-) and pay only the 35% to Thailand (not sure that the Thai government needs any money:-). 

[Raindancer]

On 8/2/2024 at 1:02 PM, Mason45 said:

What, were you a field marshall?

What a crass comment.  The OP quite clearly said uk state pension and military pension.

 

So, two pensions totalling 80k per month is normal, and his military pension depends upon the rank and length of service, upon retiring.

 

I am in the same boat, albeit my monthly combined pensions are over 93k per month.

 

Have a nice day

 

 

[Unamerican]

On 8/1/2024 at 12:23 PM, KannikaP said:

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.

Not quite, since there are many components of a U.K. State Pension.  Thus some lucky people get paid considerably more as part of their U.K. State Pension.  This is because they have been forced, or chosen, whilst in employment, to make substantial payments into it (SERPS, for example). 

[Unamerican]

On 8/2/2024 at 12:52 PM, rocketboy2 said:

 

 I'm sure when / if, these new forms show up.

They will make everything as clear as mud.

But there appearance or lack of it, will spawn another 10 threads and 300 pages of reading material, or toilet paper, depending on how you see it.

I very much doubt they will get the act together.

They will be happy for the people to just pony up and pay what ever.

Win, Win

See ya all here, end of November time. 

TIT.

 

 

In what sense are they predicted to “show up” ??

Edited August 3 by Unamerican
Typo!!

[rocketboy2]

Just now, Unamerican said:

In what sense ate they predicted to “show up” ??

 

What, are you on Leo or Chang.

[Antiparovian]

Does anyone have a Thai TIN number? My UK Investment platform has requested one as I no longer have a UK address.

[Unamerican]

23 hours ago, sandyf said:

I did acknowledge an alternative interpretation which you would have seen on my 2nd post.

However I don't see why anyone would feel compelled to try and prove a worst case scenario, unless of course they had a vested interest.

Taxation is a personal issue and I for one am not going to volunteer may state pension as taxable income unless someone with the authority to do so says otherwise. By the same token others are free to take any action they feel appropriate.

if it came to pass I never had to pay any tax I wouldn't assume vindication, just that you don't have to be a Lemming. 

In what senses is it “a personal issue”?? 

[Unamerican]

3 minutes ago, rocketboy2 said:

 

What, are you on Leo or Chang.

Neither: I drink only Beer Lao.