Dumb Question For Retirees

[samran]

a couple of dumb questions so that I can understand the system a bit better:

If you are retired and married to a Thai national, surely the spousal visa is the way to go?? What is to stop the following scenario? (and please feel free to check my sums and my logic! )

For instance, you need 800K to get a retirement extension, or you need 40K per month of joint income to get a spousal extension (ie 480K per year - joint income).

What is to stop you having an overseas entity (ie hubby) pay the wife the requisite 40K per month consulting services. The wife submits a tax return each year. On a salary of 40K per month, taking into account the tax free threshold you'd be paying 25,100 tax per year, or about 2100baht per month. This includes the 750 baht per month social security contribution - which gives her access to the SS network in Thailand.

You could, in your wifes name invest an additional 15% of her salary into a Long Term Fund (5 years) which is counted as a tax deduction. As such, a maximum investment of 72,000baht per year into a long term fund will bring down monthly tax liabilities to 1491 baht, or 17,900 baht per year.

My current long term fund ING Good Corporate governance fund, as returned 25% in the past year (as an example).

So, going the spouse route, it costs you 1491 baht per month in tax payments to get this visa. Looking at this from an opportunity cost perspective (ie the next best scenario – likely keeping that 480K ‘salary’+ 320K = 800K in the bank here in Thailand getting no interest as proof of your retirement visa), the cost to you of taking a marriage visa is 17,900 baht per year.

At the same time, you can keep your 320K offshore getting say bare minimum 5% interest (ie 16K per year interest almost negating your wifes tax liablity), your Long Term Fund investment (a SET linked fund to a basket of top Thai companies) should grow some letting you come out on top.

In addition, having a non-immigrant O visa will allow you to take up some work legally and potter about doing bits and pieces if you are so inclined. Remember your annual visa is being extended via your family income, not the (per se.) income you earn from your "muck around"’ job in your older years. This also puts you on the path to PR should you desire it.

Anyway, what do people think? Maybe my logic is all off.....

Cheers

Samran

[Artisi]

I think your logic is ok- but you can bet there will be a snag somewhere in the system that will negate the logic, remember this is Thailand.

[lopburi3]

Suspect many/most? of use use the 65k pension method so cost is 1,900 for TM.7, about 1,000 for Embassy letter and perhaps 200 for bank letter or 3,100 baht per year. No need for more than normal month of funds in bank. Although I prefer to have extra cash on hand myself.

You can always change extension type if you want to go to work - and use either wife or employment.

Unless you are making more than a normal local hire expat salary there is little chance for PR currently.

Family extension also requires the spouse to be present each time and extra trips to immigration/extra paperwork.

But with the new 3 month rule I suspect it would be cost effective for many that don't have or can't use the income method.

[Maestro]

It looks spot on to me. For some people, though, it may be too much hassle having their wives run a sole proprietorship.

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Maestro

[torrenova]

I am looking into the cheapest way to remain here post mid 2008. I will not work (present thinking) but am too young to retire. So I will probably use the marriage 40k family income. She then gets paperwork which she can use to get a mortgage on a property (my potential loss is the deposit) but I will have it held in trust for our daughter.

I will be out the tax on 40k less the investment relief but that is far cheaper than any other method I currrently see unless the form filling and whatever associated with that route has significant costs.

On the subject of working, I understand that I can get a WP on any salary as long as the business fulfills the Thai employees legal stuff. No need to have this 50k per month but I would have to be on a B visa i think and thus would need a 20k trip (including all visa fees and taxis, hotels etc) to Penang or something.

[TerryLH]

"...work legally and potter about doing bits and pieces if you are so inclined. Remember your annual visa is being extended via your family income, not the (per se.) income you earn from your "muck around"’ job..."

I don't think WP's are going to be easy to get for 'mucking around doing bits and pieces.' You'd probably still end up working illegally.

It's often been posted here that imm 'encourages' people, who are qualified, to take the retirement extension instead of the support route.

As for investing, the 800k doesn't have to stay in the bank forever, just three months prior to extension. Any money that is earned in interest is net, not needed to offset added expenses required for the support visa.

[samran]

Thanks all.

one thing I noticed when doing these sums is that given that at a basic financial level, the choice between a marriage visa and retirement visa makes no financial difference for a retiree (ie the basics of what I just outlined - taking away any potential tax deductions and potential investment upside in Thailand). From that perspective, the rules 40K family income or the 800K retirment funds 'make sense' so far as to say, there is no inherent financial motive for taking one over the other, which is why immigration stuctured it this way so that people didn't take one visa over the other...but according to their cirumstance....but that is just a hypothesis (nb...rants on motives for the rules can be had elsewhere...I'm just looking to see how 'efficiencies' can be created under present rules!!).

But if you take a look at the potential upside: ie returns from Thailand based investments as a tax deduction, access to work permits, ablity to keep 320K offshore and growing at 5+%, and if you can wangle it, PR, then the 'marriage' extension approach starts to make a bit more sense....even though the gains are less explicitly quantifaible.

[torrenova]

You don't need to have 480k onshore all year though, just 40k per month. Your average offshore would therefore increase by 40*12/2 = 240k !

[samran]

You don't need to have 480k onshore all year though, just 40k per month. Your average offshore would therefore increase by 40*12/2 = 240k !

so another 'plus' for the marriage visa route then!?!

[samran]

"...work legally and potter about doing bits and pieces if you are so inclined. Remember your annual visa is being extended via your family income, not the (per se.) income you earn from your "muck around"’ job..."

I don't think WP's are going to be easy to get for 'mucking around doing bits and pieces.' You'd probably still end up working illegally.

It's often been posted here that imm 'encourages' people, who are qualified, to take the retirement extension instead of the support route.

As for investing, the 800k doesn't have to stay in the bank forever, just three months prior to extension. Any money that is earned in interest is net, not needed to offset added expenses required for the support visa.

based on my readings from Sunbelt, the hassel is not getting the WP per se, it is extending it beyond the date of your underlying visa - which is where most of the 'conditions' kick in. Given in this case, your underlying visa is being extended cause you are married to someone earning the requisite 40K, then the WP will be for the life of the O visa..ie 12 months at a time.

[Morty]

I think this could be the way to do it if you're under fifty and married. Given that you have the means to do an "early retirement" but don't have any income to secure an embassy letter against. i.e. have savings, but no income.

[torrenova]

I have some businesses which my wife ostensibly controls (owns ), she pays tax on 40k, I do nothing but piggyback on her income.

I still think that if I wanted a WP I would have to go get a B visa though. Right or wrong ?

[samran]

I have some businesses which my wife ostensibly controls (owns ), she pays tax on 40k, I do nothing but piggyback on her income.

I still think that if I wanted a WP I would have to go get a B visa though. Right or wrong ?

WP's can be done off O visas...

[lopburi3]

A non immigrant o visa/extension can also receive a work permit.

[Maestro]

I still think that if I wanted a WP I would have to go get a B visa though. Right or wrong ?

Wrong, fortunately. You can apply for a work permit when on a marriage extension. The beauty of this, compared to an extension for employment, is that

1. you are not asked to leave the country within seven days after termination of employment

2. your employer needs no Thai employees for your extension

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Maestro

[abdulrahman]

If you are retired and married to a Thai national, surely the spousal visa is the way to go?? What is to stop the following scenario? (and please feel free to check my sums and my logic! )

Anyway, what do people think? Maybe my logic is all off.....

Cheers

Samran

Though my situation is different,I am eligible for the retirement visa,by age and income,but I chose the family visa;my wife is already working,but short of the 40K Baht x month,the Embassy letter more than cover the rest,haven't had problem with renevals,yet! We have a small used books shop,a hobby for me,really,I,m losing money by it,but I can stay there for a nominal salary.About PR,not interested,thanks,not worth the effort and the money.

Thank you Samran for the tip about the investment in Long term Fund.

[samran]

If you are retired and married to a Thai national, surely the spousal visa is the way to go?? What is to stop the following scenario? (and please feel free to check my sums and my logic! )

Anyway, what do people think? Maybe my logic is all off.....

Cheers

Samran

Though my situation is different,I am eligible for the retirement visa,by age and income,but I chose the family visa;my wife is already working,but short of the 40K Baht x month,the Embassy letter more than cover the rest,haven't had problem with renevals,yet! We have a small used books shop,a hobby for me,really,I,m losing money by it,but I can stay there for a nominal salary.About PR,not interested,thanks,not worth the effort and the money.

Thank you Samran for the tip about the investment in Long term Fund.

no worries, make sure your wife is claiming the married persons allowance, those for your kids (if any). As well as the LTF, you can get deductions for pension fund contributions and life insurance (not sure about health insurance).

[TerryLH]

Deductions for Thai Social Security contributions, as well. (Soc Sec = health ins)

[astral]

Have you allowed for the fees for your own company, either in LOS or overseas??

Just to make the whole deal neat and tidy.

[samran]

Have you allowed for the fees for your own company, either in LOS or overseas??

Just to make the whole deal neat and tidy.

no I didn't as I am unfamiliar with them but they'd be minimal especialy for renwal?

As for owning a company, i wasn't thinking one would be needed. It would just be regular income for consulting purposes from anyone who pays you. You simply declare the income.

An interesting question would be to ask Sunbelt if the wife sets herself up as a sole trader and banks the 40K/month that way, would that still be counted as wifes salary or would the lesser amount be? By this i mean that as a sole trader, you can write of 70-80% of your 'revenues' against 'expenses' without the need for receipts, leaving the remaining 20 to 30% as taxable income in the traditional sense, making your declared taxable income lower......

[englishoak]

Good thoughts Samran,

This is a very interesting thread, I have been thinking there must be a way to simplify the visa process options for the under 50's.

It also opens an opportunity for WP in the future whilst contributing to the Thai economy.

[MyPenRye]

Not being a tax expert in any way, shape, or form, but, if you were to set up this fictional "consultant" job for your wife, could you not claim that as a business expense (I live in Canada half of the year and I have set up a company that could claim to be using these kinds of expenses) and/or any other expenses, such as flights, equipment to operate a business (computers,...).

As an aside, the OP did not factor in the gold ring and wedding expenses in his calculation (Hey! Everything counts, right?)! Considering all of the advantages, this is negligible, but do not tell that to the wife, of course!