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

[chiang mai]

6 minutes ago, sometimewoodworker 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.

I believe this is the difference between what the TRD rules state versus the accepted. practise.

[sometimewoodworker]

5 hours ago, jojothai said:

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. 

 You are mistaken.

There are pensions that are specifically covered in article 19

However dual taxation of income tax and other taxes are included in article 2

 

[Mike Teavee]

1 hour ago, sometimewoodworker 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.

As usual there is a difference between what the "Rules" say (You should file a return if you have > 120/220K in assessable income) & the practicality of it (TRD isn't interested in you unless you owe tax & would prefer you not to file as it's more work for them).  

 

Edit: Apologies, I've just seen @chiang maipost above saying the same thing. 

 

[Surasak]

14 hours 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 do not have a tax liability, is that OK with you? No doubt you find it difficult getting on and off your horse!

[sometimewoodworker]

5 minutes ago, Surasak said:

I do not have a tax liability, is that OK with you? No doubt you find it difficult getting on and off your horse!

Just because  you don’t like the answer to a question doesn’t change the answer.

 

I never said you have a tax liability, I said that your 400k or 800k for your visa/extension isn’t exempt from taxation. 

Taxation and fairness are antithetical

[MikePBrown]

12 hours ago, topt said:

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).

Thanks for your confirmation. Do your private pension providers still deduct tax at the 20% rate?  I ask because like you I am not on PAYE but my private pension still has the 20% deduction resulting in a slight tax over payment that I claim back each year. 

[Mike Teavee]

13 hours ago, sometimewoodworker said:

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.

You will have a Tax code somewhere as if you don't you'd be put on an Emergency Tax code & you'd soon know about that!  But it's not part of your UTR as that remains the same whereas your Tax Code can change with your circumstances. 

 

I'm assuming that your Pension Provider pays your pension gross & then you file a Tax Return and pay HMRC what you owe, if you were to get an NT Tax Code you wouldn't owe HMRC anything BUT you are expected to pay tax on the pension in the country where you are Tax Resident & I'm guessing that because in previous years it was easy to avoid paying any Tax in Thailand, it's difficult to get an NT Code if you live here, maybe it will get easier with this new Tax change.

 

 

[sometimewoodworker]

14 minutes ago, Mike Teavee said:

You will have a Tax code somewhere as if you don't you'd be put on an Emergency Tax code & you'd soon know about that!  But it's not part of your UTR as that remains the same whereas your Tax Code can change with your circumstances. 

Quite possibly I have one however I have no idea where I would find it, I haven’t filed a U.K. tax return myself for over 40 years, I have received letters occasionally from HMRC and they may have had a tax code, I don’t recall.

[retarius]

The insanity of Thai legislators doesn't help when understanding important changes that are announced with fanfare. Seems to me that when you change the rules, you should make an announcement when all the details have been ironed out. 

[Raindancer]

18 hours ago, Jumbo1968 said:

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.

You don't actually pay income tax on your state pension, if it is below the £12570 personal allowance 

 

But if you have another pension,( defined as income by HMRC) you will pay tax on that.

 

Example purely for illustration purposes and simplicity:

 Person A receives,say £ 11570 uk state pension.

And also receives another pension, be it govt or private of say £18000 per annum.

 

The UK state pension of £11570 is deducted from the personal allowance of £12570, leaving therefore £1000 still under the personal allowance.

 

This £ 1000 is then deducted from the other pension of £18000, leaving £17000 taxable income at 20%.

 

So, in effect you don't pay tax on UK state pension per se, using the above illustration.

[Will B Good]

15 hours ago, sometimewoodworker said:

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.

 

Obviously, if this too personal, please don't answer......but how do you not pay any tax?

[samtam]

17 hours ago, norbra said:

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

Link

www.thaiembassy.com

 

This exchange between "Suresh & Rex" is dated September 2020. Not sure if it is relevant now or not, but until RD produce new tax filing forms, and/or anything at all which answers the myriad of questions, we simply don't know. Will the new Finance Minister, (whoever that will be), do a complete volte face? (They apparently do not now need to find THB450 billion for the Digital Wallet, as the new PM - same as the old - has opined that it's a bad idea.)

[jojothai]

6 hours ago, sometimewoodworker said:

 You are mistaken.

There are pensions that are specifically covered in article 19

However dual taxation of income tax and other taxes are included in article 2

 

You are mistaken.

The specifics only pension covered is for government service.

The matter has been  discussed in many threads on this forum and the main conclusion is always the same.

There is no need to discuss it further thanks.

[steve187]

17 hours ago, Expat68 said:

I am doing nothing until there is a clear announcement 

need to get your head out of the sand, if your bringing enough money into live on into Thailand then you more than likely need to get a TIN, should speak to local office

[Mike Teavee]

1 hour ago, sometimewoodworker said:

Quite possibly I have one however I have no idea where I would find it, I haven’t filed a U.K. tax return myself for over 40 years, I have received letters occasionally from HMRC and they may have had a tax code, I don’t recall.

Normally I'd suggest that it might be on your P60 but as your pension provider doesn't withhold your tax then I'm not sure it will be. 

 

If you're interested in finding it out you can register on the UK Gov site... https://www.gov.uk/tax-codes

 

[Jumbo1968]

1 hour ago, Raindancer said:

You don't actually pay income tax on your state pension, if it is below the £12570 personal allowance 

 

But if you have another pension,( defined as income by HMRC) you will pay tax on that.

 

Example purely for illustration purposes and simplicity:

 Person A receives,say £ 11570 uk state pension.

And also receives another pension, be it govt or private of say £18000 per annum.

 

The UK state pension of £11570 is deducted from the personal allowance of £12570, leaving therefore £1000 still under the personal allowance.

 

This £ 1000 is then deducted from the other pension of £18000, leaving £17000 taxable income at 20%.

 

So, in effect you don't pay tax on UK state pension per se, using the above illustration.

If you didn’t opt out of SERPS there is a chance you will be over tax threshold, I opted out but opted back in. My State Pension is over the tax threshold therefore I pay tax on it.

I pay tax on my private pension of around £50 a month, I got ts relief on PP contributions but the government are now taking it back from me, it have said tax deferred not tax relief.

[Will B Good]

1 hour ago, Raindancer said:

You don't actually pay income tax on your state pension, if it is below the £12570 personal allowance 

 

But if you have another pension,( defined as income by HMRC) you will pay tax on that.

 

Example purely for illustration purposes and simplicity:

 Person A receives,say £ 11570 uk state pension.

And also receives another pension, be it govt or private of say £18000 per annum.

 

The UK state pension of £11570 is deducted from the personal allowance of £12570, leaving therefore £1000 still under the personal allowance.

 

This £ 1000 is then deducted from the other pension of £18000, leaving £17000 taxable income at 20%.

 

So, in effect you don't pay tax on UK state pension per se, using the above illustration.

 

 

You kind of do though......as the state pension gobbled up nearly all of your personal allowance.

[MikePBrown]

1 hour ago, jojothai said:

You are mistaken.

The specifics only pension covered is for government service.

The matter has been  discussed in many threads on this forum and the main conclusion is always the same.

There is no need to discuss it further thanks.

 

Just to clarify for any UK Expats with UK sourced pensions that are taxed in the UK and then those pensions are remitted to Thailand and are classed as taxable income in Thailand. I believe the relevant clause in the DTA is "Article 23 Elimination of Double Taxation, item 3" quoted below:

 

"(3) In the case of Thailand, United Kingdom tax payable in accordance with this
Convention in respect of income from sources within the United Kingdom shall be
allowed as a credit against Thai tax payable in respect of that income. The credit shall
not, however, exceed that part of the Thai tax, as computed before the credit is given,
which is appropriate to such item of income."

 

My interpretation of this article is that you can quote this to the TRD and claim any UK paid tax as a credit against your Thailand income tax liability - providing it is the same income in both countries. My understanding is that the credit amount is put in Thai Personal Income Tax Form 90 under "Item 11.13 Computation" and I guess if the TRD query this you quote the DTA with proof of UK tax paid.

 

 

Jojothai - I agree there has been a lot of misunderstandings in previous posts but I believe the above is correct. - hope this can help clarify the tax credit applicable in Thailand.

[chiang mai]

14 minutes ago, MikePBrown said:

 

Just to clarify for any UK Expats with UK sourced pensions that are taxed in the UK and then those pensions are remitted to Thailand and are classed as taxable income in Thailand. I believe the relevant clause in the DTA is "Article 23 Elimination of Double Taxation, item 3" quoted below:

 

"(3) In the case of Thailand, United Kingdom tax payable in accordance with this
Convention in respect of income from sources within the United Kingdom shall be
allowed as a credit against Thai tax payable in respect of that income. The credit shall
not, however, exceed that part of the Thai tax, as computed before the credit is given,
which is appropriate to such item of income."

 

My interpretation of this article is that you can quote this to the TRD and claim any UK paid tax as a credit against your Thailand income tax liability - providing it is the same income in both countries. My understanding is that the credit amount is put in Thai Personal Income Tax Form 90 under "Item 11.13 Computation" and I guess if the TRD query this you quote the DTA with proof of UK tax paid.

 

 

Jojothai - I agree there has been a lot of misunderstandings in previous posts but I believe the above is correct. - hope this can help clarify the tax credit applicable in Thailand.

A problem is that the tax years do not align, Thailand returns must be filed by 31 March whereas the UK tax year doesn't end until 5 April. The issue here is that tax credits, or so I am told, cannot be carried forward although I have not seen first hand proof of this.

[MikePBrown]

23 minutes ago, chiang mai said:

A problem is that the tax years do not align, Thailand returns must be filed by 31 March whereas the UK tax year doesn't end until 5 April. The issue here is that tax credits, or so I am told, cannot be carried forward although I have not seen first hand proof of this.

 

I hadn't heard of tax credits not being carried forward and obviously a major issue if this is the case. However on one of the YouTubes with a tax consultant (sorry can't remember which one) his answer to the issue of tax years not corresponding date wise, was that "they" (the tax consultant) used the actual tax payment up to April 4th and then a calculated the tax liability for the rest of the year and put this in as the credit. As I understood it this is what his firm actually did when filing Thai Tax returns for clients and presumably without any issues!

However as has been mentioned many times the devil is in the details which we don't know unless you have access to someone or a tax consultant that has actually been submitting Thai Tax returns for clients.

[MikePBrown]

1 hour ago, chiang mai said:

A problem is that the tax years do not align, Thailand returns must be filed by 31 March whereas the UK tax year doesn't end until 5 April. The issue here is that tax credits, or so I am told, cannot be carried forward although I have not seen first hand proof of this.

A further thought on whether a tax credit can be carried forward - the tax credit is detailed in the DTA and not in the Thai Tax regulations, although I have not read every article in the UK/Thai DTA the articles I have read make no mention of the Thai tax credit being limited to the year in which the UK tax is paid. Therefore a tax credit could be carried forward - my extrapolation and no doubt open to a differing view from TRD.

[Mike Teavee]

1 hour ago, MikePBrown said:

 

I hadn't heard of tax credits not being carried forward and obviously a major issue if this is the case. However on one of the YouTubes with a tax consultant (sorry can't remember which one) his answer to the issue of tax years not corresponding date wise, was that "they" (the tax consultant) used the actual tax payment up to April 4th and then a calculated the tax liability for the rest of the year and put this in as the credit. As I understood it this is what his firm actually did when filing Thai Tax returns for clients and presumably without any issues!

However as has been mentioned many times the devil is in the details which we don't know unless you have access to someone or a tax consultant that has actually been submitting Thai Tax returns for clients.

I think you might be referring to this video (I:01:30 in)...

 

 

[chiang mai]

46 minutes ago, MikePBrown said:

A further thought on whether a tax credit can be carried forward - the tax credit is detailed in the DTA and not in the Thai Tax regulations, although I have not read every article in the UK/Thai DTA the articles I have read make no mention of the Thai tax credit being limited to the year in which the UK tax is paid. Therefore a tax credit could be carried forward - my extrapolation and no doubt open to a differing view from TRD.

The terms of a DTA take precedence over national tax laws in every instance so your argument makes sense. As you imply however, exactly how the TRD would view this is not clear.

[chiang mai]

I've been UK non resident for tax purposes for 15 years. I still file a tax return because I have rental income that arises there. I still have a tax code that gets updated from time time and I can see this via the HMRC Gateway, along with all my tax history over the years. My UK State Pension fits nicely within the Personal Allowance so any UK tax I pay  depends on my rental income and whether or not I take funds from my UK SIPP. I am to all intents and purposes just another UK tax payer who doesn't have to declare any income that arises outside of the UK and everyone else who is not tax resident will be similar..

[Expat68]

On 8/15/2024 at 7:37 PM, nong38 said:

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.

So is the UK state pension taxable in Thailand?

[Expat68]

19 hours ago, steve187 said:

need to get your head out of the sand, if your bringing enough money into live on into Thailand then you more than likely need to get a TIN, should speak to local office

I am more prepaid than most people. For the last 20 years I have filled in a UK Self Assessment for myself and the wife, all I need to do is produce the results of this

[Mike Teavee]

2 hours ago, Expat68 said:

So is the UK state pension taxable in Thailand?

Yes it is taxable, however it is the 1st thing that goes onto your "Income Pile" when it comes to calculating your tax so for most people this will all fit into their personal allowance and so it looks like it's tax free. 

 

Anybody with a State Pension > £12,570 pa or a large income (Personal Allowance reduces by £1 for every £2 earned above £100,000 until you hit £124,150 where you've effectively got no Personal Allowance) will need to pay tax on their State Pension though from what I've read it seems it's collected via a different route than the Pension itself being taxed at source.

 

https://www.gov.uk/income-tax-rates/income-over-100000#:~:text=Your Personal Allowance goes down,income is above £150%2C000. 

[Expat68]

21 minutes ago, Mike Teavee said:

Yes it is taxable, however it is the 1st thing that goes onto your "Income Pile" when it comes to calculating your tax so for most people this will all fit into their personal allowance and so it looks like it's tax free. 

 

Anybody with a State Pension > £12,570 pa or a large income (Personal Allowance reduces by £1 for every £2 earned above £100,000 until you hit £124,150 where you've effectively got no Personal Allowance) will need to pay tax on their State Pension though from what I've read it seems it's collected via a different route than the Pension itself being taxed at source.

 

https://www.gov.uk/income-tax-rates/income-over-100000#:~:text=Your Personal Allowance goes down,income is above £150%2C000. 

Thanks for that. Wish I was getting £12,570, mine froze at £7,400😊

[Mike Teavee]

47 minutes ago, Expat68 said:

Thanks for that. Wish I was getting £12,570, mine froze at £7,400😊

Sorry, I think  I misread your question & thought you were asking about whether it was taxed in the UK. 

 

State Pension is taxable in Thailand but if you pay UK tax on income over & above State Pension you should be able to offset the UK Tax owed which for most people will mean <42K THB pm income will probably be covered by their TEDA & >49K THB pm income will probably be covered by the tax already paid in the UK.

 

[jojothai]

On 8/16/2024 at 1:21 PM, MikePBrown said:

 

Just to clarify for any UK Expats with UK sourced pensions that are taxed in the UK and then those pensions are remitted to Thailand and are classed as taxable income in Thailand. I believe the relevant clause in the DTA is "Article 23 Elimination of Double Taxation, item 3" quoted below:

 

"(3) In the case of Thailand, United Kingdom tax payable in accordance with this
Convention in respect of income from sources within the United Kingdom shall be
allowed as a credit against Thai tax payable in respect of that income. The credit shall
not, however, exceed that part of the Thai tax, as computed before the credit is given,
which is appropriate to such item of income."

 

My interpretation of this article is that you can quote this to the TRD and claim any UK paid tax as a credit against your Thailand income tax liability - providing it is the same income in both countries. My understanding is that the credit amount is put in Thai Personal Income Tax Form 90 under "Item 11.13 Computation" and I guess if the TRD query this you quote the DTA with proof of UK tax paid.

 

 

Jojothai - I agree there has been a lot of misunderstandings in previous posts but I believe the above is correct. - hope this can help clarify the tax credit applicable in Thailand.

 

I did not want to discuss this further, but i consider that there is no misunderstanding. 
Most UK related arguments simply do not recognise that DTA's need to specifically  state where there are provisions for pensions.

The advice that I have seen on many legal advice websites states something like this for pensions =
If there are no special rules in the DTA to say that it is not taxable, then it is potentially taxable in Thailand.
But only if the pension is transferred or remitted into Thailand (as the rules currently stand).

I have seen websites that specifically state that State and private pensions in the UK are taxable in Thailand (but you can use tax already paid as a credit).

There are no special rules for pensions in general in the UK DTA, except for those from government service.
This is why there is the advice that pension income is potentially taxable here 
Why would there need to be special rules exempting government service as stated in article 19, if all pensions are exempt from DT?

What most people do not understand is that DTA’s mostly have a standard format that is the same. People disagreeing on UK need to go and look at them.

Other country DTA’s have specific provision for pensions, but the UK does not.
e.g. Canada article 18 , Australia article 18.
The UK does not have this in article 18.
Be warned.