Thai Tax on UK pensions

[Moonlover]

23 hours ago, chiang mai said:

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

Banks have no authority to deduct tax on overseas remittances. It's the TRD's job to collect tax, not the banks. Where did you get this nonsense from?

[chiang mai]

23 minutes ago, Moonlover said:

Banks have no authority to deduct tax on overseas remittances. It's the TRD's job to collect tax, not the banks. Where did you get this nonsense from?

A 15% with holding tax on all savings interest is automatically deducted and forwarded to the TRD.

Edited August 3 by chiang mai

[BobBKK]

1 hour ago, Unamerican said:

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.).

 I hope you are right and leave us alone.

[Moonlover]

18 minutes ago, chiang mai said:

34 minutes ago, Moonlover said:

Banks have no authority to deduct tax on overseas remittances. It's the TRD's job to collect tax, not the banks. Where did you get this nonsense from?

 

18 minutes ago, chiang mai said:

A 15% with holding tax on all savings interest is automatically deducted and forwarded to the TRD.

 

Yes I know that, but that is a completely separate issue from income tax.

[treetops]

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.

 

<snip>

 

One thing not taken into account which may affect things is that many UK pensioners using pension drawdown will be taking part of their monthly income from the tax free allowance of 25%.  This will reduce the UK income tax they pay and depending on the amount taken like this may or may not push them into the position where they will owe tax to Thailand.

[chiang mai]

2 minutes ago, Moonlover said:

 

 

Yes I know that, but that is a completely separate issue from income tax.

A poster asked if "they" would see their pension coming into their bank account. I replied yes, the BOT sees all remittances from overseas. And since the remittance is then in the remitters bank account, it's most likely earning some interest, against which tax is deducted and returned to the TRD, ergo, the TRD is potentially also aware of the account by virtue of the tax withholding. The remitter may then file an income tax return to recover that tax withholding. I see the last part of that as a natural extension of the posters question and not totally removed from the subject of income tax.

 

 

[sandyf]

On 8/1/2024 at 6:35 PM, JimGant said:

Let sandyf have his way on state pensions. With his self assessment logic, he would not declare his state pension on a Thai tax return. Thus, there would be no number -- maybe not even a tax return -- upon which the TRD could call him in for a discussion. But, in the <1% chance he's called in for an audit -- and the missing state pension number is brought up -- if he can blow just half the wind he's blowing on this subject on this thread -- they'll eventually toss him out of the office in exasperation.

 

Seriously, if you really believe a position that's to your benefit, go for it -- but be prepared to have your defense in order. In this situation, everyone but sandy believes he's on shaky ground. But if sandy believes it -- why shouldn't he go for it. He may end up paying a Thai tax on this, after an audit. But with such a huge amount of BS to throw at the TRD -- he certainly wouldn't be seen as complicit in tax evasion. Just pay the tax, with fine and interest. But, again, the chance of him being called in for an audit over a missing number -- is probably zilch.

Would appear that personal attacks are now allowed on the forum, I must have missed the change on that.

However, some of us have no desire to paddle in the gutter.

[Mike Teavee]

25 minutes ago, treetops said:

 

One thing not taken into account which may affect things is that many UK pensioners using pension drawdown will be taking part of their monthly income from the tax free allowance of 25%.  This will reduce the UK income tax they pay and depending on the amount taken like this may or may not push them into the position where they will owe tax to Thailand.

Agreed, some people's circumstances are going to be different (e.g. somebody may have additional allowances in the UK & their UK tax paid would be lower that the numbers I quoted) so it's important to use the actual Tax paid in the UK & not the numbers that I gave but hopefully the examples give people a feel for what their Thailand Tax  Liability would be.

 

 

It will be interesting to see how the 25% tax free allowance from UK Pensions are treated.  Will TRD treat it as income that has had no tax paid on it (probably as they're unlikely to understand what it is) or will they make some allowance to exclude it from assessable income (Highly doubtful) - I'm on a Defined Benefits / Final Salary pension and when I take my PCLS (25% Tax Free Pension Commencement Lump Sum) it's a one shot deal so I'm planning to be non-Thai Tax resident that year.  

 

Edited August 3 by Mike Teavee

[Jumbo1968]

On 7/31/2024 at 3:43 PM, BobBKK said:

 
I'm almost in the same boat with an NHS pension and a State Pension due this year. I have deferred the State Pension until we get clarity.

No benefit of delaying your date pension nowadays after they changed the rules in2016 meaning it takes years to get back the years you defer.

[jwest10]

3 hours ago, rocketboy2 said:

 

What, are you on Leo or Chang.

Precisely and on a wind up too

[sometimewoodworker]

2 hours ago, Mike Teavee said:

It will be interesting to see how the 25% tax free allowance from UK Pensions are treated.  Will TRD treat it as income that has had no tax paid on it (probably as they're unlikely to understand what it is) or will they make some allowance to exclude it from assessable income (Highly doubtful) - I'm on a Defined Benefits / Final Salary pension and when I take my PCLS (25% Tax Free Pension Commencement Lump Sum) it's a one shot deal so I'm planning to be non-Thai Tax resident that year.  

It is unlikely that you will find out how TRD will regard it unless it is paid to you while you are tax resident, also remitted while you are tax resident and most importantly the TRD decides to audit your return. As until that point the TRD doesn’t need to do anything.

So given that you intend to be non tax resident the year it is claimed there is nothing to investigate or decide.

However if it is only for that reason that you want to be nonresident you may find that a professional tax accountant’s opinion is less expensive.

[topt]

5 hours ago, Mike Teavee said:

I used HMRC "Estimated Take Home Pay" calculator.

Thanks for the clarification. My calculator obviously uses different batteries to theirs as my 20% figures are about £2 more....

[Scott Tracy]

On 8/1/2024 at 10:22 AM, 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.

It is taxed.... Or at least taxable should it reach or exceed the current personal allowance, which mine does.

[Jumbo1968]

15 minutes ago, Scott Tracy said:

It is taxed.... Or at least taxable should it reach or exceed the current personal allowance, which mine does.

 

15 minutes ago, Scott Tracy said:

It is taxed.... Or at least taxable should it reach or exceed the current personal allowance, which mine does.

Yep your State Pension is classed as taxable income, most of my tax allowance is taken up by my State Pension and therefore I pay tax on my private pension.

[Mike Teavee]

3 hours ago, sometimewoodworker said:

However if it is only for that reason that you want to be nonresident you may find that a professional tax accountant’s opinion is less expensive.

My main reason for bringing the money over is as a $250K "Investment" to support my application for an LTR Visa so a Tax Firm being able to "Hide" this remittance for me wouldn't help.

 

I can show an income of >$40K pa today, but I need to invest the $250K to get the visa & my PCLS will get me there (or at least close enough where I can make up the difference from money I'm currently not remitting to Thailand because of these tax changes - sincerely hope they wake up & realise that people are not bringing money in because of the current tax situation). 

 

 

   

Edited August 3 by Mike Teavee

[sometimewoodworker]

45 minutes ago, Mike Teavee said:

My main reason for bringing the money over is as a $250K "Investment" to support my application for an LTR Visa so a Tax Firm being able to "Hide" this remittance for me wouldn't help.

 

I can show an income of >$40K pa today, but I need to invest the $250K to get the visa & my PCLS will get me there (or at least close enough where I can make up the difference from money I'm currently not remitting to Thailand because of these tax changes - sincerely hope they wake up & realise that people are not bringing money in because of the current tax situation). 

The advice of a tax consultant was not predicated by any idea of hiding the source of the required 250k but an expert opinion as to if it would class as assessable or not assessable for Thai taxation. It is an uncommon source and could easily be seen as either. If the opinion is that it is not assessable that would obviate the requirement to be non resident when it is paid out.

 

I am almost certainly going to be non resident for 1 tax year because I have a significant capital gain to realise and capital gains are certainly assessable. 

[SunsetT]

On 8/1/2024 at 5:01 AM, 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

 

 

HERE YOU GO............SCROLL TO END........

 

 

THAILAND DT-Individual Full relief 25% 5% Full relief No relief No Yes 1. Relief may be restricted if whole amount of income is
Note 1 DT-Company (ST) (ST) (ST) (N & R) Note 4 (N & R) not remitted to Thailand.
SI 1981 (PAIF dist int) Note 2 Note 3 2. 10% or full relief in certain circumstances.
No1546 UK-REIT 3. 15% (ST) for patent, certain film, radio and TV
DT-Individual royalties.
UK-REIT 11 12 13 19 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’.
 

[Mike Teavee]

45 minutes ago, sometimewoodworker said:

The advice of a tax consultant was not predicated by any idea of hiding the source of the required 250k but an expert opinion as to if it would class as assessable or not assessable for Thai taxation. It is an uncommon source and could easily be seen as either. If the opinion is that it is not assessable that would obviate the requirement to be non resident when it is paid out.

 

I am almost certainly going to be non resident for 1 tax year because I have a significant capital gain to realise and capital gains are certainly assessable. 

Agree 100% & I'm giving serious thought to selling my UK House that same year which would raise Capital Gains that would certainly be assessable (Even after the CGT I would need to pay on it in the UK) but I also believe that, currently, the Tax "Experts" have no more information than us laymen so (personally I) wouldn't consult one until the situation is much clearer (I don't need to make a decision until 2026 so happy to sit back & see what happens).

 

As an aside Thailand's visas have changed so much in the past 6 months It would be silly of me to decide exactly what I'm going to do in 18 months, the LTR could (I'm not for 1 minute suggesting it would) lose it's "Tax Free" remittances or the Non-IMM O could morph into a 5 year Visa/Extension With tax free remittance of pensions (Which to me makes absolute sense for guys from a country that Thailand has a DTA with). 

 

 

But the plan at the moment, is to do an Hotblack Desiato in 2026 🙂

 

Edited August 3 by Mike Teavee

[Jumbo1968]

12 hours ago, Mike Teavee said:

Agree 100% & I'm giving serious thought to selling my UK House that same year which would raise Capital Gains that would certainly be assessable (Even after the CGT I would need to pay on it in the UK) but I also believe that, currently, the Tax "Experts" have no more information than us laymen so (personally I) wouldn't consult one until the situation is much clearer (I don't need to make a decision until 2026 so happy to sit back & see what happens).

 

As an aside Thailand's visas have changed so much in the past 6 months It would be silly of me to decide exactly what I'm going to do in 18 months, the LTR could (I'm not for 1 minute suggesting it would) lose it's "Tax Free" remittances or the Non-IMM O could morph into a 5 year Visa/Extension With tax free remittance of pensions (Which to me makes absolute sense for guys from a country that Thailand has a DTA with). 

 

 

But the plan at the moment, is to do an Hotblack Desiato in 2026 🙂

 

Out of interest why would you pay CGT on your U.K. property after selling it ?

[Andycoops]

On 8/1/2024 at 8:24 AM, david saunders said:

Paragraph 18 of A Simple Guide to Personal Income Tax in Thailand states that UK State Pension is not covered by a DTA so it is assessable income in Thailand whilst UK Government or Civil Service, UK Armed Forces and some NHS Pensions are not.

Absolutely correct 

[Mike Teavee]

1 hour ago, Jumbo1968 said:

Out of interest why would you pay CGT on your U.K. property after selling it ?

Because it's not been my "Primary Residence" since I moved overseas in 2008 & I've been renting it out since 2010.

 

[chiang mai]

23 hours ago, Mike Teavee said:

 

It will be interesting to see how the 25% tax free allowance from UK Pensions are treated.  Will TRD treat it as income that has had no tax paid on it (probably as they're unlikely to understand what it is) or will they make some allowance to exclude it from assessable income (Highly doubtful) - I'm on a Defined Benefits / Final Salary pension and when I take my PCLS (25% Tax Free Pension Commencement Lump Sum) it's a one shot deal so I'm planning to be non-Thai Tax resident that year.  

 

I think TRD will disregard the 25% tax free status, just as they disregard the UK Personal Allowance, why should that matter to them.

[sandyf]

On 8/1/2024 at 3:11 PM, Mike Teavee said:

Edit: Playing Devils Advocate, State Pensions are mainly paid for out of Employer & Employee National Insurance contributions so where the Employer wasn't a Government department could be argued are not being paid for by the Government.

Another Devils Advocate could ask how a UK State Pension paid on the basis of NI credits could be seen as a pension from employment.

How would that reconcile with Art 41 of the revenue code?

 

Bit strange that people always want to refer to the UK state pension in the singular, when it is anything but.

[KannikaP]

On 8/3/2024 at 2:38 PM, chiang mai said:

A 15% with holding tax on all savings interest is automatically deducted and forwarded to the TRD.

Yes, that's because interest is money earned in Thailand. Easy enough to get it back form the Tax Office if you are below the tax free threshold.

[KannikaP]

1 hour ago, KannikaP said:

Yes, that's because interest is money earned in Thailand. Easy enough to get it back form the Tax Office if you are below the tax free threshold.

Spelling Police here. FORM? Too late for me to edit it. Stupid Boy. 555

[BobBKK]

On 8/3/2024 at 4:23 PM, Jumbo1968 said:

No benefit of delaying your date pension nowadays after they changed the rules in2016 meaning it takes years to get back the years you defer.

 I understand your view but believe you are wrong - here's why:

The pension is frozen - next year should be another good rise - probably 6 to 7%
The pension is increased by 1% every nine weeks

I will delay for one year only—that is a rise of 12%, which I think is worth taking. Also, I am waiting for the decision on whether we will all be taxed here. It will take 5 to 6 years to break even. 

[topt]

1 hour ago, BobBKK said:

 I understand your view but believe you are wrong - here's why:

The pension is frozen - next year should be another good rise - probably 6 to 7%
The pension is increased by 1% every nine weeks

I will delay for one year only—that is a rise of 12%, which I think is worth taking. Also, I am waiting for the decision on whether we will all be taxed here. It will take 5 to 6 years to break even. 

I think you may be out of luck if you are living in Thailand and you have declared that.

https://www.gov.uk/deferring-state-pension/if-you-move-abroad

 

Quote

If you reach State Pension age on or after 6 April 2016

If you move to a country that is not in the list, your extra payment will be based on the State Pension you’re owed at whichever is later of:

• the date you reach State Pension age
• the date you move abroad

 

[Jumbo1968]

2 hours ago, BobBKK said:

 I understand your view but believe you are wrong - here's why:

The pension is frozen - next year should be another good rise - probably 6 to 7%
The pension is increased by 1% every nine weeks

I will delay for one year only—that is a rise of 12%, which I think is worth taking. Also, I am waiting for the decision on whether we will all be taxed here. It will take 5 to 6 years to break even. 

I think your calculations are a little bit out,

If you reached state pension age after 6 April 2016, the 'pay back' period is 17 years at today's state pension rates or 15 years with the state pension increasing by 2.5% each year.

Take your health into consideration - if you're fit and healthy, you could end up with much more money as you get older

[Letseng]

On 8/1/2024 at 9:53 AM, 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 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.

 

On my state pension letter it states that no tax has been deducted.

[Jumbo1968]

46 minutes ago, Letseng said:

On my state pension letter it states that no tax has been deducted.

You would only pay tax on you State Pension if it was above the £12670 threshold, if you have a private pension the 2 are combined and tax is deducted from your private pension.