Taxation on UK Pensions Assets in Thailand: State Pension, SIPPs, Annuities QROPS and QNUPs

[Mike Teavee]

 

[Surasak]

4 hours ago, Mike Teavee said:

 

All very straight forward but, where does a newbie stand, bringing 400 or 800K for a retirement Visa? If it is in any way taxable,then it is totally unfair!

[MikePBrown]

They give details of the change to the tax regulation application at the start and then proceed to talk mainly about the original tax regulations that have not changed. I.e. anyone who has been living in Thailand more than 180 days per year and brings their pension into Thailand in the same tax year as received is potentially liable for income tax on the remittance - Nothing has changed and anyone doing this without submitting a tax return was practicing tax avoidance either knowingly or unknowingly.

 

[Jumbo1968]

Fella said U.K. State Pension is tax free, it’s not its part of your income and with  the recent it increases some people are actually paying income tax on it.

[chiang mai]

1 hour ago, Surasak said:

All very straight forward but, where does a newbie stand, bringing 400 or 800K for a retirement Visa? If it is in any way taxable,then it is totally unfair!

Depends on the source of the income, if pre 12/31/23 savings, they are tax free. Most retirees just starting out here will have savings of some sort I imagine.

[topt]

1 hour ago, Surasak said:

All very straight forward but, where does a newbie stand, bringing 400 or 800K for a retirement Visa? If it is in any way taxable,then it is totally unfair!

Since when has taxation been fair......

[topt]

30 minutes ago, MikePBrown said:

They give details of the change to the tax regulation application at the start and then proceed to talk mainly about the original tax regulations that have not changed. I.e. anyone who has been living in Thailand more than 180 days per year and brings their pension into Thailand in the same tax year as received is potentially liable for income tax on the remittance - Nothing has changed and anyone doing this without submitting a tax return was practicing tax avoidance either knowingly or unknowingly.

 

Been mentioned many times. So what point are you trying to make? 

[sometimewoodworker]

1 hour ago, Surasak said:

All very straight forward but, where does a newbie stand, bringing 400 or 800K for a retirement Visa? If it is in any way taxable,then it is totally unfair!

The first is a question that is impossible to answer as it has been asked you haven’t given enough information.

the second one that is given a question mark but is not. It is a winge.

 

There is nothing that that suggests that that your bank deposit for your visa or extension should be exempt from tax and no reason for it to be exempt.

 

However if you want it to be exempt then do not live in Thailand for more than 180 days in the year that you bring in the money.

 

if you do your homework you can reduce or possibly eliminate your tax liability 

[nong38]

According to the 180 day rule I am a Thai tax resident although currently HMRC are taxing my state and private pension, is it the UK tax law that my UK sourced pensions are taxed in the UK? If I fill out the HMRC form P85 which takes from a UK tax resident to a Thai tax resident would that mean that I no longer pay any tax in the UK and that I would declare and pay Thai Tax on my UK pensions which then become assessable in Thailand?

[Ben Zioner]

1 hour ago, MikePBrown said:

Nothing has changed and anyone doing this without submitting a tax return was practicing tax avoidance either knowingly or unknowingly.

Evasion sir. And anyone uncooperative might get caught in a 10 years audit, with nasty consequences.

Edited August 15 by Ben Zioner

[Mike Teavee]

11 minutes ago, nong38 said:

According to the 180 day rule I am a Thai tax resident although currently HMRC are taxing my state and private pension, is it the UK tax law that my UK sourced pensions are taxed in the UK? If I fill out the HMRC form P85 which takes from a UK tax resident to a Thai tax resident would that mean that I no longer pay any tax in the UK and that I would declare and pay Thai Tax on my UK pensions which then become assessable in Thailand?

Any tax you've paid on your pension in the UK can be offset against tax owed in Thailand so (by some rough calculations I did on another thread) unless you're earning 42K (likely to put you below your TEDA)  to 49K (at this point you're likely to be paying more tax in UK than you would owe in Thailand) THB per month you won't have any tax to pay. 

 

Obviously your personal circumstances re: Tax & allowances may be different but as a rough rule of thumb. most guys who are only receiving UK pension income won't have anything to pay.  

 

 

If you do manage to get an "NT" tax code in the UK, please let us know how you did it... My UK accountant friend tells me I have little chance of getting one now I live in Thailand & I should have gone for it when I lived in Singapore 😞

Edited August 15 by Mike Teavee

[norbra]

10 minutes ago, sometimewoodworker said:

The first is a question that is impossible to answer as it has been asked you haven’t given enough information.

the second one that is given a question mark but is not. It is a winge.

 

There is nothing that that suggests that that your bank deposit for your visa or extension should be exempt from tax and no reason for it to be exempt.

 

However if you want it to be exempt then do not live in Thailand for more than 180 days in the year that you bring in the money.

 

if you do your homework you can reduce or possibly eliminate your tax liability 

This info may help,I have been finding more Thai law firms supporting these views.

Link

www.thaiembassy.com

[Expat68]

I am doing nothing until there is a clear announcement 

[chiang mai]

10 minutes ago, norbra said:

This info may help,I have been finding more Thai law firms supporting these views.

Link

www.thaiembassy.com

Er, yes, but.....remitted funds from overseas can still count as assessable income so that answer was far too simplistic and narrow.

[norbra]

8 minutes ago, chiang mai said:

Er, yes, but.....remitted funds from overseas can still count as assessable income so that answer was far too simplistic and narrow.

Ask at a Rd office if they will provide a retiree who is prohibited from working in Thailand with a tin.

The answer they gave me was "we will not provide a TIN" Not needed.

Edited August 15 by norbra

[sometimewoodworker]

17 minutes ago, Mike Teavee said:

If you do manage to get an "NT" tax code in the UK, please let us know how you did it... My UK accountant friend tells me I have little chance of getting one now I live in Thailand & I should have gone for it when I lived in Singapore 😞

I am unclear as to your meaning of your, or an “NT” U.K. tax code, could you elaborate please

[sometimewoodworker]

4 minutes ago, norbra said:

Ask at a Rd office if they will provide a retiree who is prohibited from working in Thailand with a tin.

The answer they gave me was "we will not provide a TIN" 

That is rather simplistic, if you want a Thai tax code, ask for one as you want to reclaim bank withholding tax,

Edited August 15 by sometimewoodworker

[Mike Teavee]

6 minutes ago, sometimewoodworker said:

I am unclear as to your meaning of your, or an “NT” U.K. tax code, could you elaborate please

An "NT" Tax code means you do not pay Tax on most income (Government Pensions being an obvious exception) in the UK as the UK believes you'll be taxed on it in your country of residence. 

 

 https://www.cjfinance.co.uk/nt-tax-code-hmrc-how-to-apply-nt-tax-code-for-non-uk-residents/#:~:text=NT Tax Code implies that,tax from this income source.

 

Edit: To clarify, you wouldn't pay UK Tax on your private pension if you had an NT Tax code.

 

Edited August 15 by Mike Teavee

[chiang mai]

7 minutes ago, norbra said:

Ask at a Rd office if they will provide a retiree who is prohibited from working in Thailand with a tin.

The answer they gave me was "we will not provide a TIN" Not needed.

Ask the same question of the Revenue Head Office in Bangkok and they will say yes sir, certainly sir.

 

Retirees have bank accounts, banks pay interest and deduct 15% withholding tax from that interest, the customer can file a tax return to obtain a refund of that tax, to do so they need a TIN. DO NOT Take no for an answer, if you want a TIN, demand you are given one.

Edited August 15 by chiang mai

[sometimewoodworker]

1 hour ago, Mike Teavee said:

An "NT" Tax code means you do not pay Tax on most income (Government Pensions being an obvious exception) in the UK as the UK believes you'll be taxed on it in your country of residence. 

 

 https://www.cjfinance.co.uk/nt-tax-code-hmrc-how-to-apply-nt-tax-code-for-non-uk-residents/#:~:text=NT Tax Code implies that,tax from this income source.

 

Edit: To clarify, you wouldn't pay UK Tax on your private pension if you had an NT Tax code.

 

Thank you for the explanation.
 

Personally I have had no requirement for an NT code as my pensions, state and private, are both paid without taxation into my U.K. account and I complete an HMRC  return annually. I don’t have a tax code, I do have a unique Taxpayer Reference that may possibly contain a tax code.

[nong38]

1 hour ago, sometimewoodworker said:

The first is a question that is impossible to answer as it has been asked you haven’t given enough information.

the second one that is given a question mark but is not. It is a winge.

 

There is nothing that that suggests that that your bank deposit for your visa or extension should be exempt from tax and no reason for it to be exempt.

 

However if you want it to be exempt then do not live in Thailand for more than 180 days in the year that you bring in the money.

 

if you do your homework you can reduce or possibly eliminate your tax liability 

I only have a state pension and small private one, when I worked out the figures it looks to me like this. If I fill HMRC form P85  which would make me a non UK tax resident. My 11 months a year in Thailand makes me a tax resident. If I can my taxes on the 2 pensions in Thaiand it would save me about 1000 pounds so I am tempted to do this later this year.

[sometimewoodworker]

2 hours ago, nong38 said:

According to the 180 day rule I am a Thai tax resident although currently HMRC are taxing my state and private pension, is it the UK tax law that my UK sourced pensions are taxed in the UK? If I fill out the HMRC form P85 which takes from a UK tax resident to a Thai tax resident would that mean that I no longer pay any tax in the UK and that I would declare and pay Thai Tax on my UK pensions which then become assessable in Thailand?

Your pensions were always assessable in Thailand when remitted to Thailand. So the completion of P85 makes no difference to the TRD. All it means is that you have no U.K. tax paid to offset the Thai tax that will be due.

 

By a very rough calculation you will be receiving around ฿800,000 this will mean that you will almost certainly have a Thai tax liability of upwards of £450.

 

these numbers are extremely tentative and would require much more information to be remotely accurate 

you need to provide exact figures to an accountant for this.

 

Edited August 15 by sometimewoodworker

[EVENKEEL]

[MikePBrown]

Question for Sometimewoodworker and nong38. You seem to be saying that if you complete a P85 form to the HMRC - UK to say you are a Uk Non-Resident then your UK pensions will have no UK income tax liability - have I understood you correctly?

 

My understanding is that even though you are a UK Non-Resident you will have UK income tax liability on any UK sourced income which would include pensions, all be it you will have the personal tax allowance and any other allowances available to you to reduce your UK tax liability. The P85 form lets HMRC know you are now a UK Non-Resident and therefore not liable for UK income tax on anything received from off shore or say investments in Jersey or Isle of Mann. I would be interested to know if you have information that my understanding is wrong. E.g. whether I can claim UK income tax back on my UK pension. Thanks

[chiang mai]

11 minutes ago, MikePBrown said:

Question for Sometimewoodworker and nong38. You seem to be saying that if you complete a P85 form to the HMRC - UK to say you are a Uk Non-Resident then your UK pensions will have no UK income tax liability - have I understood you correctly?

 

My understanding is that even though you are a UK Non-Resident you will have UK income tax liability on any UK sourced income which would include pensions, all be it you will have the personal tax allowance and any other allowances available to you to reduce your UK tax liability. The P85 form lets HMRC know you are now a UK Non-Resident and therefore not liable for UK income tax on anything received from off shore or say investments in Jersey or Isle of Mann. I would be interested to know if you have information that my understanding is wrong. E.g. whether I can claim UK income tax back on my UK pension. Thanks

Your understanding is correct, any income that arises in the UK is still taxable there for people who are not uk tax resident.

[topt]

10 minutes ago, MikePBrown said:

Question for Sometimewoodworker and nong38. You seem to be saying that if you complete a P85 form to the HMRC - UK to say you are a Uk Non-Resident then your UK pensions will have no UK income tax liability - have I understood you correctly?

 

My understanding is that even though you are a UK Non-Resident you will have UK income tax liability on any UK sourced income which would include pensions, all be it you will have the personal tax allowance and any other allowances available to you to reduce your UK tax liability. The P85 form lets HMRC know you are now a UK Non-Resident and therefore not liable for UK income tax on anything received from off shore or say investments in Jersey or Isle of Mann. I would be interested to know if you have information that my understanding is wrong. E.g. whether I can claim UK income tax back on my UK pension. Thanks

I know I am not them but I will reply anyway 

Your understanding was my understanding.

 

I was paying some tax on a company pension for about 18 months via PAYE and as I have other income declaring all in a tax return. On my last return I ticked some boxes to say I wanted to pay any outstanding tax and not to collect via tax code. About a month later (1 or 2 months ago) on my next pension payment they (the pension provider) paid back most of the tax they had already taken.

 

It makes no particular difference to me at the moment as I will still pay the same amount of tax however it may be an issue in the future if I try claiming any credits against UK tax paid on a Thai return especially due to the mismatch in tax years.

 

Also as a non resident for tax you are not taxed on most Capital Gains - apart specifically from property. (no idea on crypto).

[Moonlover]

9 minutes ago, MikePBrown said:

Question for Sometimewoodworker and nong38. You seem to be saying that if you complete a P85 form to the HMRC - UK to say you are a Uk Non-Resident then your UK pensions will have no UK income tax liability - have I understood you correctly?

 

My understanding is that even though you are a UK Non-Resident you will have UK income tax liability on any UK sourced income which would include pensions, all be it you will have the personal tax allowance and any other allowances available to you to reduce your UK tax liability. The P85 form lets HMRC know you are now a UK Non-Resident and therefore not liable for UK income tax on anything received from off shore or say investments in Jersey or Isle of Mann. I would be interested to know if you have information that my understanding is wrong. E.g. whether I can claim UK income tax back on my UK pension. Thanks

Now that is exactly how I understand it as well. I had to file a P85 before I went to work in the middle east. I had to do that to protect my overseas earnings from UK taxation. I still paid tax on my military pension and I was still entitled to my personal allowance. 

 

I filed another one when I went to live in Egypt about 20 years ago just in case I found work there as a SCUBA diving instructor, which I did. I've never been back to the UK since, so as far as I'm aware my non resident status still stands, but I'm still taxed on my pensions.

 

Folks seem to have the idea that the P85 is a 'get out of jail free card' as far as UK tax goes. It isn't.

[nong38]

This is the real question that I think a lot of people want the answer to and I have asked this to HMRC and they have not answered it. The question is a simple one to me and it is this Are my UK state pension and or my private pension taxed in the UK regardless of my tax residency?

If the answer to this is yes than the P85 is not worth bothering about, I just get a credit for the UK tax to set against my Thai tax return.

If on the other hand I have no UK tax to pay and I declare my pensions in Thailand I pay the tax on them in Thailand.

[jojothai]

1 hour ago, nong38 said:

This is the real question that I think a lot of people want the answer to and I have asked this to HMRC and they have not answered it. The question is a simple one to me and it is this Are my UK state pension and or my private pension taxed in the UK regardless of my tax residency?

If the answer to this is yes than the P85 is not worth bothering about, I just get a credit for the UK tax to set against my Thai tax return.

If on the other hand I have no UK tax to pay and I declare my pensions in Thailand I pay the tax on them in Thailand.

I think you get no answer because you are combining 2 things into 1 that does not necessarily work.
It depends what is paid into the UK. State pension is a UK payment and is normally below the single allowance. (at present!)
A private pension can be totally different if not paid in the UK.
If private pension is paid into the UK and you get state pension then you will be taxed on it.
If you are non resident and the private pension has been transferred overseas to an authorised QROPS or equivalent then payments may be offshore and it is not UK income. As I understand it is currently and until the new labour govt want to screw us more.
You may think the P85 and non-residence makes no difference, but it depends if you have moved the private pension outside the Uk within the allowed trustees , etc.
The P85 may establish residence outside UK where you need it. Its not necessary if HMRC has already confirmed that you are non-resident,
I think you may personally have both pensions paid in the UK and your conclusion is therefore partly correct, except that there is no DTA agreement for you to offset UK tax against the Thai tax return unless the pension is government service. Therefore you need to think again.
There have been many discussions and clarifications on this matter in this forum. 
I consider that the UK DTA does not cover pensions except for government service pensions. There have been many posts on this matter, gets lots of misinterpretation but when referring to the actual wording it is very clear and the same conclusion. 

Edited August 15 by jojothai
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[sometimewoodworker]

18 hours ago, Mike Teavee said:

 

The video claims that if your income is over 220,000 (Married)  you are required to file a tax return! That is directly contradicted by a huge number of posts and contacts with RD offices that do not want a return if no tax is due or to be repaid.