Thai tax tangle: Expats warned of new rules on overseas income

[JimGant]

1 hour ago, Keep Right said:

No way am I going to inform the U.S. of my bank in Thailand.

You tell 'em. First, let's assume you're an honest US Citizen, so you declare your Thai interest from your Thai bank account on your annual US tax filing. Let's say your average amount in the bank is $25000 (850k bt). Based on what Bangkok Bank paid me last year on my savings account interest (.40%) -- that would be $100 in annual interest income to report on my US 1040 tax return. So, that's what you report on Schedule B of the 1040. Or, you don't, 'cause you have no taxable income (standard deduction greater than gross income). Or you don't, 'cause you're dishonest. In any of these situations, it won't matter that Uncle Sam knows you have a Thai bank account, because under FATCA, there's no reporting on aggregated accounts under $50000 at year end ($75000 any time during the year), so in my example, nothing about your account will be forwarded to the US.

 

But, of course, if you have well over $50000 in Thai bank accounts, and you don't report the interest on these on your US tax filing -- that's why FATCA came about. So, yeah, if you're a tax evader, best not give your SSN to the Thai bank. But, if honest, what's the big deal....?

 

 

[KhunHeineken]

2 hours ago, Keep Right said:

I will transfer money to my wife's account online and just get the money from her.

Have you considered the Thailand tax implications for her with your strategy?

 

2 hours ago, Keep Right said:

No way am I going to inform the U.S. of my bank in Thailand.

They already know about it anyway. 

[Jingthing]

On 1/29/2025 at 9:12 PM, JimGant said:

Actually, per Por 162 they are not assessable income, since their funding and reinvested earnings are all pre 2023 income (except for any reinvested income post 2023). But, this premise is not in stone, since some folks maintain Por 162 exempted income only applied to liquid bank holdings on 12/31/23. But some folks are wrong.

Hello.

 

I will now ask you to refer to the expat tax thailand webinar where this issue was clearly and directly asked and answered by Khun Pattharaphon Penjham, Senior Legal Officer at the Thailand Revenue Department.

 

I know your opinion but based on this information, unfortunately your opinion is not correct and should best be adjusted based on this new information.

 

As far as the exemption of funds on December 31, 2023:

 

"ONLY CAPITAL FOR BANK ACCOUNTS OR CASH ACCOUNTS" 

"YOU CAN NOT APPLY THIS FOR INVESTMENTS OR PENSIONS"

 

As noted many times, IRA accounts are classed as accessable pensions by Thailand.

 

This is as settled as this is going to get. Sorted. End of story.

 

There may indeed be a number of grey areas that remain on these Thai taxation matters. This is NOT one of them. 

[NoDisplayName]

3 hours ago, Keep Right said:

No way am I going to inform the U.S. of my bank in Thailand.

 You no FBAR?

[Jingthing]

Obviously no need to file FBAR unless you are required to do so under the specific rules of that. Basically 10K USD in a composite of all foreign accounts for even one minute in the previous year.

[NoDisplayName]

2 hours ago, potless said:

At 17.40 Investment case study 2. He gives an example of calculating capital gains tax for a tax resident who sells £40k of UK investments and remits the whole amount to Thailand in 2024. Out of the remittance of 1,722,911 baht including the 40% gain cited, he comes up with a figure of 487,341 as the gain and says that is the assessable income. Then at 19.30 shows a tax form with the 487,341 baht entered in a box as the assessable income. Why is the rest of the remittance not assessable?

What am I missing?

 

Capital gain is the income, which is assessable, and is entered on the form as taxable.

 

The original investment is prior earnings, non-assessable, so is not entered.

 

Youtube examples are always simple, they always remit the entire proceeds, but he did state that you cannot separate capital from gain.  If you remit partial amount of the sale, it's a percentage of capital and gain.

[Etaoin Shrdlu]

2 hours ago, potless said:

At 17.40 Investment case study 2. He gives an example of calculating capital gains tax for a tax resident who sells £40k of UK investments and remits the whole amount to Thailand in 2024. Out of the remittance of 1,722,911 baht including the 40% gain cited, he comes up with a figure of 487,341 as the gain and says that is the assessable income. Then at 19.30 shows a tax form with the 487,341 baht entered in a box as the assessable income. Why is the rest of the remittance not assessable?

What am I missing?

 

Leaving aside a minor math miscalculation on his slide, the point he is trying to make is that only the capital gain, not the principal amount originally invested, is assessable income. Since the remittance also includes the principal amount, it should not be declared in its entirely. Only the portion that represents the capital gain is assessable income.

 

Assuming that the investment was purchased with funds earned prior to January 1st 2024, this would be correct. 

 

Assuming that the remitted amount of thb 1,722,991 per his slide is correct, and the gain was 40%, the capital gain would be 492,283, not 487,341.

[anrcaccount]

10 hours ago, Jingthing said:

Hello.

 

I will now ask you to refer to the expat tax thailand webinar where this issue was clearly and directly asked and answered by Khun Pattharaphon Penjham, Senior Legal Officer at the Thailand Revenue Department.

 

I know your opinion but based on this information, unfortunately your opinion is not correct and should best be adjusted based on this new information.

 

As far as the exemption of funds on December 31, 2023:

 

"ONLY CAPITAL FOR BANK ACCOUNTS OR CASH ACCOUNTS" 

"YOU CAN NOT APPLY THIS FOR INVESTMENTS OR PENSIONS"

 

As noted many times, IRA accounts are classed as accessable pensions by Thailand.

 

This is as settled as this is going to get. Sorted. End of story.

 

There may indeed be a number of grey areas that remain on these Thai taxation matters. This is NOT one of them. 

 

Hang on. Think. 

 

Have you asked Expat Tax if they've ever filed a Thai tax return that includes declaring remitted Roth IRA withdrawals as foreign income?

 

People have been remitting Roth IRA withdrawals to Thailand for many years now, if their position is accurate, they should have always been considered same year income and taxed, right? ( Newsflash, this hasn't been happening)

 

What they're relying on here, is the IRA wrapper characterization being considered pension income. This is indeed the case in some countries where they consider a Roth IRA withdrawal simply as pension income. 

 

Do Expat Tax have a ruling from the TRD, that defines any ROTH IRA withdrawal as pension income? Or a ruling that defines the difference between remitting original capital and income? 

 

Let's be clear, a Roth IRA consists of contributions (income earned pre 2024, often over many, many years) , plus earnings on those contributions. Taxing the entire remittance would be taxing income earned prior to 2024. I cannot see this holding up in a legal challenge, given POR 161/2. 

 

In any case, there are multiple other simple ways to handle this, if it does become the TRD's position: 

 

A- Sell the IRA, buy a non pension asset with the IRA proceeds overseas, sell that asset immediately at cost, remit the proceeds. Not liable for Thai tax, no gains remitted. 
B- Remit the IRA proceeds as a gift
C- Remit the IRA proceeds in a year you are non resident ( not ideal , not really a good 'structuring' work around but worth mentioning) 

 

Any tax advisor worth their salt would bring options like this to the table. 

 

[JimGant]

11 hours ago, Jingthing said:

As far as the exemption of funds on December 31, 2023:

 

"ONLY CAPITAL FOR BANK ACCOUNTS OR CASH ACCOUNTS" 

OK, I'll drop arguing about IRAs. But, I'll still use my own logic in interpreting Por 162 when I file (or don't file) my Thai taxes. I think the effect of Por 162 is still sorting out.... For example:

 

What about the near-liquid money market account and the CDs I had on Dec 31 2023? Their value on that date, converted to cash and wired to Thailand post 2023 -- would logically fall under Por 162 (in my mind, anyway). But the guidance from the Webinar, about "only capital for bank accounts or cash accounts" -- seems to not allow this. However, I bet if you asked someone with decision making authority -- and a brain -- at TRD about this, they would not restrict Por 162 to "bank accounts or cash accounts." I'll throw in, "what about the money in my mattress on Dec 31 2023?"

 

Anyway, when specifics aren't (yet) codified, take the road that's to your advantage. In the minuscule chance you're audited -- if you have a sound, non frivolous argument, as in the above -- worst that can happen, I believe, would be back taxes plus interest. Worth it, IMO.

[RupertIII]

12 hours ago, Jingthing said:

"ONLY CAPITAL FOR BANK ACCOUNTS OR CASH ACCOUNTS" 

"YOU CAN NOT APPLY THIS FOR INVESTMENTS OR PENSIONS"

Am I correct in assuming that an offshore investment, equities, sold in 23, transferred to Wise in the UK and then remitted to Thailand in 24 is not assessable?

[jwest10]

14 hours ago, roobaa01 said:

Gday

I thought the 100 k pension allowance is only applicable if you work. Can someone here explain please ?

 

Wbr

Roobaa01

That is not true there is an allowance for 100K of your pension

[Expat68]

If anyone is interested!!

Some months ago I emailed HMRC regarding Thai Tax and UK Tax, which I received flak from many people.

This week I received a reply

 

Dear Sir or Madam,

 

Thank you for contacting the HMRC Residence Team.

 

If you are resident abroad and receive a pension from a UK based company, income tax will be deducted at (at least) the Basic Rate of Tax, which is currently 20%.

 

You can use your Personal Tax Account to view your HMRC details and make changes online. To register, go to www.gov.uk/personal-tax-account.

 

To receive a repayment of the income tax that has been deducted in the United Kingdom, HMRC require a copy of Form DT Individual endorsed by the foreign tax authority. A hyper-link to this form is attached for your information:

 

https://www.gov.uk/government/publications/double-taxation-treaty-relief-form-dt-individual

 

Under Article 7 of the tax treaty in force between the United Kingdom and THAILAND, income from immoveable property is taxable in the country in which the property is situated.

 

As a Non Resident Landlord you are required to complete a Self-Assessment return for each UK Tax Year that you own the property even if your income from property is less than your Personal Allowance.

 

You also need to complete the SA109 Resident supplementary page as you are not resident in the UK.

 

https://www.gov.uk/log-in-file-self-assessment-tax-return

 

Personal Allowance

A Personal Allowance is the amount of income that you are allowed to earn in a Tax Year, in the United Kingdom before income tax becomes due. For the current Tax Year (i.e. 2018 to 19) this is £11,850.00. For the 2017 to 18 Tax Year the Personal Allowance was £11,500.

 

I have attached hyper-links to the Non Resident Landlords scheme and forms:

 

https://www.gov.uk/personal-tax/non-resident-landlord-scheme

https://www.gov.uk/government/collections/non-resident-landlords-forms

 

 

Regards

 

Certificate of Residence Team

HMRC Personal Tax Operations

Please do not reply directly to this email

 

Your Personal Tax Account (PTA) lets you take control of your tax affairs 24/7. You can:

 

• Check your Tax Code is correct.
• Claim an online refund if you have paid too much Tax.
• Print a proof of Income letter straight away (ideal for Mortgage & loan applications).
• Review your National Insurance record, your expected State pension
• Report changes in your circumstances and much more

 

Your PTA is free, secure and easy to use. If you already have a Government Gateway User ID and Password, use it to sign in to your PTA. If you don't have these, you can still get to your PTA – just make sure you have a P60, payslip or passport to hand. You can access it from your computer, mobile phone or tablet. Go to www.gov.uk and search for “Personal Tax Account” and then follow the instructions on screen.

 

 

Follow HMRC on Twitter at: @HMRCgovuk

 

Original Message Excluded: -----------------------

 

 

[potless]

14 hours ago, NoDisplayName said:

 

Capital gain is the income, which is assessable, and is entered on the form as taxable.

 

The original investment is prior earnings, non-assessable, so is not entered.

 

Youtube examples are always simple, they always remit the entire proceeds, but he did state that you cannot separate capital from gain.  If you remit partial amount of the sale, it's a percentage of capital and gain.

Thanks for your reply and clarification. As in Jinthings post (3rd one down on this page), 

As far as the exemption of funds on December 31st, 2023:

"ONLY FOR BANK ACCOUNTS AND CASH ACCOUNTS"

"YOU CANNOT APPLY THIS FOR INVESTMENTS OR PENSIONS"

i have seen that written in various posts on tax threads and wrongly assumed that all money remitted from  investment  sales would be assessable, hence my query. WOW.

A few months back, I was reading posts where posters had similar interests to each other but couldnt agree on their analysis of the tax rules. I was thinking of suggesting that some of them could get together and seek advice, sharing the cost.

I then realised that this could lead to arguments amongst themselves, a mass brawl, police summoned, hospital bills. deportation and blacklisting. 🙂

 

[potless]

14 hours ago, Etaoin Shrdlu said:

Leaving aside a minor math miscalculation on his slide, the point he is trying to make is that only the capital gain, not the principal amount originally invested, is assessable income. Since the remittance also includes the principal amount, it should not be declared in its entirely. Only the portion that represents the capital gain is assessable income.

 

Assuming that the investment was purchased with funds earned prior to January 1st 2024, this would be correct. 

 

Assuming that the remitted amount of thb 1,722,991 per his slide is correct, and the gain was 40%, the capital gain would be 492,283, not 487,341.

Thanks for your reply, similar to NoDisplayName s reply. My reply to him is just above this post. You say that this would apply prior to January 31st 2023. Would this not apply going forward, i.e. investments purchased this year and then sold in several years time?