Retirement Visa - Funds Question

[gregchambers]

Have another two years to go to get to 50, one thing I am slightly worried about is the income tax situation - although I will have a self invested UK pension that I can use this will be taxed by Blair and co at a flat twenty percent on withdrawal; however I will also have other income/savings that I can use effectively tax free except in regard to the Thai tax authorities... (UK and Thailand have a double taxation agreement so I won't be taxed on pernsion income twice)

or to put it another way, does this minimum yearly income of 800k attract any attention from the Thai tax authorities if you are here for more than six months in a tax year?

[lopburi3]

Have another two years to go to get to 50, one thing I am slightly worried about is the income tax situation - although I will have a self invested UK pension that I can use this will be taxed by Blair and co at a flat twenty percent on withdrawal; however I will also have other income/savings that I can use effectively tax free except in regard to the Thai tax authorities... (UK and Thailand have a double taxation agreement so I won't be taxed on pernsion income twice)

or to put it another way, does this minimum yearly income of 800k attract any attention from the Thai tax authorities if you are here for more than six months in a tax year?

<{POST_SNAPBACK}>

1. There has not been any drive to tax retiree income and most would be shielded by tax treaty in any case.

2. The policy on tax has been not to tax money coming into Thailand that was earned in a previous tax year. You you could bring in savings that you had earned earlier without tax implications.

[Guest endure]

Have another two years to go to get to 50, one thing I am slightly worried about is the income tax situation - although I will have a self invested UK pension that I can use this will be taxed by Blair and co at a flat twenty percent on withdrawal; however I will also have other income/savings that I can use effectively tax free except in regard to the Thai tax authorities... (UK and Thailand have a double taxation agreement so I won't be taxed on pernsion income twice)

<{POST_SNAPBACK}>

I was under the impression that income derived from a UK pension was taxed in the same way as a salary i.e that you get your personal allowance and then 10/22/40% depending on how big your pension is. Where does the 20% come into it? Isn't that the tax that's paid on savings rather than earnings?

[gregchambers]

Nope, private pensions are taxed at a flat rate of 20 percent (might be 22?) in the UK at source (ie they take the money from the pension co) BUT it will then be adjusted every year when you supply your tax return to the UK (you will pay more if higher rate tax payer). If non-resident you still pay twenty percent but if the country where you are resident decided to tax your pension income and had a double taxation agreement with the UK they would then take into account the 20 percent from the UK tax and if it was less in Thailand (which I think it would be) then you might even get a rebate.

State UK pension is approx same as UK personal allowance so that is paid in full but if the allowance was lower it would be taxed too.

However, my question still is do the Thais tax the 800k you bring into the country to satisfy the pension fund requirment?

[gregchambers]

Sorry, didn;t see lopburi's reply.

Okay then, the year after you bought in the initial 800k you would be okay but in the second year you would be bringing in a second tranche of money which would then be taxed in the prior year.

Agreed, it will be covered by double taxation as the UK government would have taken twenty percent if actual private pension money.

But a lot of people bring in the 800k as they are too young to get their hands on their pensions or want them to build up more and the may come from offshore sources where there is no taxation.

What I guess I am asking is if people doing the one year retirement visa have to deal with the tax authorities in Thailand or do they just get the visa and completely ignore the tax people - not talking about working here illegally or anything but money coming from outside the country. ie if you have a one year retrement visa and are here for more than six months in a tax year do you have to do a Thai tax form?

Suppose you can jus say you are living off saving which I know are not taxed in Thaland when bought in from abroad?

[Guest endure]

Nope, private pensions are taxed at a flat rate of 20 percent (might be 22?) in the UK at source (ie they take the money from the pension co) BUT it will then be adjusted every year when you supply your tax return to the UK (you will pay more if higher rate tax payer). If non-resident you still pay twenty percent but if the country where you are resident decided to tax your pension income and had a double taxation agreement with the UK they would then take into account the 20 percent from the UK tax and if it was less in Thailand (which I think it would be) then you might even get a rebate.

<{POST_SNAPBACK}>

I'm actually in receipt of an annuity (a private pension) at the moment. I also have a job. The annuity is treated as part of my salary and thus is treated in the same way regarding allowances and tax rates. In fact it is treated as my PRIMARY source of income. When I asked the Inland Revenue why this is so they told me that the annuity will continue to be paid after I stop working and it thus considered to be my major source of income. It will still be taxed as income (with all allowance and tax rate implications) when I retire.

[Guest endure]

I have a friend from the UK who's lived in Thailand for 15 years and he's never had to deal with the Thai taxman at all. He pays no tax on the money he brings into Thailand and in fact gets a tax rebate from the Bangkok Bank on his bank savings every year viz:

"On a FIXED deposit account (irrespective of amount in, large or small)

there's a 15% tax levied on interest earned, usually calculated every three

months. However, the tax that is paid can be officially reclaimed from the

government (or central bank?) during the months of January to March for the

previous year. Expect up to a four month wait for the money to arrive, but

it comes alright.

On an ordinary deposit account, there is no tax deducted, unless 10,000

baht (or is the figure 20,000 baht??) interest is earned annually (I'm not

sure whether it's 10 or 20). When that figure is reached, then 15% tax is

levied, but this I believe is not reclaimable."

[lopburi3]

At the interest rates currently in effect not many of us have to worry about it being 10 or 20k but it used to be a reason to keep accounts under 500k or so when we had double digit interest.

Believe my post para 1 says it - no move has been made to tax retiree income. At some point, like the weather, that could change but as the amount would likely be small money involved and complex to implement so do not believe it is about to happen.

[Steve2UK]

Thai immigration only asks for a statement from your embassy re your monthly income.  What you'd need to do is convince the British Embassy that you can document an income stream that would satisfactorily meet the annual requirement.

The statement from the US Embassy is worded, "receives an amount of US$XXX every month from the US Government and/or other sources."  The word "pension" doesn't even appear in the income declaration.

-redwood

<{POST_SNAPBACK}>

Thanks Lop (again!) and Redwood. Do any UK members have knowledge of how receptive the British Embassy is to authorising a declaration about non-pension income from the UK?

I don't expect my monthly income (from UK investment/savings & rental of UK property) to be enough to quite meet the 65,000 baht per month threshold - but it would be useful to reduce significantly the 800,000 balance otherwise required at the time of O-A renewal.

[gregchambers]

Lopburi, thanks for the clarification, good news except as you say some day... typical Thailand!

[Guest endure]

Are there any Brits on here who actually have experience of getting a letter from the British Embassy? How much did it cost? Does it need to be the Embassy or would the CM Consulate do?

[redwood13]

Here's a thread from 2003 where the 2nd poster indicates he received his income letter from the British Consulate in CM.

http://tinyurl.com/darcg

The poster states:

"I took out a retirement visa last july at CM immigration.

800,000 B in the bank or 65,000 B per month was requirement.

i have a pension fom Uk gov and obtained from brit consulate a statement to that effect. i was allowed to discount this from the 800,000 b bank holding."

-redwood

[Guest endure]

Cheers Redwood!

[Bang Pra]

Hi there,

I believe http://www.thaivisa.com/318.0.html answers all (well most of!) the questions.

Seems quite clear.

However I don't understand the reason for the "Letter from your embassy saying you wish to retire in Thailand". I am going the 800K deposit route so do not need any confirmation of pensions etc.

I have an Irish passport but have not lived in Ireland for over 20 years. There is no Irish embassy in Thailand only a consulate. Any advice?

[dr_Pat_Pong]

Remember in return for permission to stay long term you are expected to support the Thai ecomomy to the tune of 80000 however in practice what you do with the money is up to you. But transferring it back abroad is a definite no no.

<{POST_SNAPBACK}>

How would they know if say 3 months into your stay you take a trip back home and take 400,000 baht with you to deposit into your foreign account ready for retransfer back to Thailand 9 months down the track?

<{POST_SNAPBACK}>

Whyever would you want to do that Tiz ? The funds could be seized if you were caught coz you couldn't show that you had brought the cash in.

[Steve2UK]

Here's a thread from 2003 where the 2nd poster indicates he received his income letter from the British Consulate in CM.

http://tinyurl.com/darcg

The poster states:

"I took out a retirement visa last july at CM immigration.

800,000 B in the bank or 65,000 B per month was requirement.

i have a pension fom Uk gov and obtained from brit consulate a statement to that effect. i was allowed to discount this from the 800,000 b bank holding."

-redwood

<{POST_SNAPBACK}>

Redwood, my thanks and admiration for your diligent research! Good to know that the CM consulate can (or did) provide the service - I'll check in with them when I'm in CM November/December.

Until then, I'm still wondering if any Brits have experience of getting a consulate/embassy statement confirming non-pension income? Or is that just not relevant (as far as Immigration are concerned) to reduce the 800,000 baht balance you have to show for O-A renewal?

[briley]

Thanks Lop (again!) and Redwood. Do any UK members have knowledge of how receptive the British Embassy is to authorising a declaration about non-pension income from the UK?

I don't expect my monthly income (from UK investment/savings & rental of UK property) to be enough to quite meet the 65,000 baht per month threshold - but it would be useful to reduce significantly the 800,000 balance otherwise required at the time of O-A renewal.

<{POST_SNAPBACK}>

Not being rude but I often wonder why people don't phone the consulate/embassy. The lady in the Chiang Mai consulate is very helpful, very nice and speaks excellent English, better than mine!

British Embassy and consulates (at least Chiang Mai) issue the letter and do not require the income to be pension, nor do they check the documented proof that you present - only proviso AFAIK is that it must be income in the UK and be in GBP.

The letter they produce, like the US embassy according to a previous reply, states you have shown proof of income of X baht.

You get the letter the first time you apply for a retirement visa and you keep the original to use again next year.

Cost is about GBP25? - more than the cost of the retirement visa - and I had to go back next day to collect - but I live near the CM consulate so no problems .

[Guest endure]

Thanks Lop (again!) and Redwood. Do any UK members have knowledge of how receptive the British Embassy is to authorising a declaration about non-pension income from the UK?

I don't expect my monthly income (from UK investment/savings & rental of UK property) to be enough to quite meet the 65,000 baht per month threshold - but it would be useful to reduce significantly the 800,000 balance otherwise required at the time of O-A renewal.

<{POST_SNAPBACK}>

Not being rude but I often wonder why people don't phone the consulate/embassy. The lady in the Chiang Mai consulate is very helpful, very nice and speaks excellent English, better than mine!

British Embassy and consulates (at least Chiang Mai) issue the letter and do not require the income to be pension, nor do they check the documented proof that you present - only proviso AFAIK is that it must be income in the UK and be in GBP.

<{POST_SNAPBACK}>

Hi Briley. Thanks for the useful info. Can you explain what you mean when you say they don't check the documented info? Do they require you take any proof along? If so, what kind?

Thanks again!

[Guest endure]

Thanks Lop (again!) and Redwood. Do any UK members have knowledge of how receptive the British Embassy is to authorising a declaration about non-pension income from the UK?

I don't expect my monthly income (from UK investment/savings & rental of UK property) to be enough to quite meet the 65,000 baht per month threshold - but it would be useful to reduce significantly the 800,000 balance otherwise required at the time of O-A renewal.

<{POST_SNAPBACK}>

Not being rude but I often wonder why people don't phone the consulate/embassy. The lady in the Chiang Mai consulate is very helpful, very nice and speaks excellent English, better than mine!

<{POST_SNAPBACK}>

I suspect it's because many of us aren't actually in Chiang Mai at the moment but hoping to move there when we can

[Steve2UK]

Thanks Lop (again!) and Redwood. Do any UK members have knowledge of how receptive the British Embassy is to authorising a declaration about non-pension income from the UK?

I don't expect my monthly income (from UK investment/savings & rental of UK property) to be enough to quite meet the 65,000 baht per month threshold - but it would be useful to reduce significantly the 800,000 balance otherwise required at the time of O-A renewal.

<{POST_SNAPBACK}>

Not being rude but I often wonder why people don't phone the consulate/embassy. The lady in the Chiang Mai consulate is very helpful, very nice and speaks excellent English, better than mine!

British Embassy and consulates (at least Chiang Mai) issue the letter and do not require the income to be pension, nor do they check the documented proof that you present - only proviso AFAIK is that it must be income in the UK and be in GBP.

The letter they produce, like the US embassy according to a previous reply, states you have shown proof of income of X baht.

You get the letter the first time you apply for a retirement visa and you keep the original to use again next year.

Cost is about GBP25? - more than the cost of the retirement visa - and I had to go back next day to collect - but I live near the CM consulate so no problems .

<{POST_SNAPBACK}>

Briley, thanks for the detailed information - exactly what I needed to know and very good news. If it's not clear from my previous post on this thread, I should say that I'm not actually in Thailand right now (just as Endure says ); I will be in Chiang Mai in November and I will go the consulate then. Thanks again for taking the time & trouble to post the information.

Edited October 3, 2005 by Steve2UK

[ChrisP]

Tracking transfers from a USA Bank.. what if you don't want to do electronic transfers? (with their high cost - about US$20)

Is this way kosher for those at the Visa place that check your records..?

Use an ATM Card to withdraw your monthly cash from your USA Bank ( for everyday living, rent etc.) and then deposit it directly into your Thai bank.

Cost US$1.00 (at my bank)

Anyone see a problem with that?

Chris P.

[lopburi3]

Tracking transfers from a USA Bank..  what if you don't want to do electronic transfers? (with their high cost  - about US$20)

Is this way kosher for those at the Visa place that check your records..?

Use an ATM Card to withdraw your monthly cash from your USA Bank ( for everyday living, rent etc.)  and then deposit it directly into your Thai bank.

Cost US$1.00 (at my bank)

Anyone see a problem with that?

Chris P.

<{POST_SNAPBACK}>

Yes there is a problem with that. Immigration will not be likely to accept. If you do not work here with a work permit they want an easy way to see foreign currency deposits. They do not have time to look through ATM receipts and home bank accounts from overseas.

Make large deposits a couple of times a year and the fees will likely cost less than atm use with the lower exchange rate that usually entails.

[briley]

Hi Briley. Thanks for the useful info. Can you explain what you mean when you say they don't check the documented info? Do they require you take any proof along? If  so, what kind?

Thanks again!   

<{POST_SNAPBACK}>

I took the statement from my rental agent giving the rent paid - that seemed to be enough. Nobody phoned up the agent to check or anything else. I did supply 4 months of statements, all of which said exactly the same thing, £x of rent received for that month.

I would add that appearance probably helps. An obviously 50+ year old with neat shirt, trousers and hair will find it easier than some of the people who's dress - well don't get me started there!

Incidentally do accept the comment from those not in Thailand who cannot phone up - I do get anoyed with people who aks questions like "is Tesco cheaper than Carrefour for eggs" type question when it is quicker to ask the shop concerned.

Incidentally for those in the UK you can call Thailand for 4p per minute (plus 3p connection charge) using call18866 - that is the same price as an 0845 call and half the price of an 0870 call.

[TizMe]

How would they know if say 3 months into your stay you take a trip back home and take 400,000 baht with you to deposit into your foreign account ready for retransfer back to Thailand 9 months down the track?

Whyever would you want to do that Tiz ? The funds could be seized if you were caught coz you couldn't show that you had brought the cash in.

Don't quite follow you there Doc !!

Who would seize the funds?

After 3 months, go and buy travellers cheques to the value of US$10,000 in Thailand. Then go on vacation to Oz where I declare the funds to customs, then deposit the funds into my Oz Bankbook.

9 months later wire the funds back to Thailand to bring the account back to 800K.

[dr_Pat_Pong]

How would they know if say 3 months into your stay you take a trip back home and take 400,000 baht with you to deposit into your foreign account ready for retransfer back to Thailand 9 months down the track?

<{POST_SNAPBACK}>

Whyever would you want to do that Tiz ? The funds could be seized if you were caught coz you couldn't show that you had brought the cash in.

<{POST_SNAPBACK}>

Don't quite follow you there Doc !!

Who would seize the funds?

After 3 months, go and buy travellers cheques to the value of US$10,000 in Thailand. Then go on vacation to Oz where I declare the funds to customs, then deposit the funds into my Oz Bankbook.

9 months later wire the funds back to Thailand to bring the account back to 800K.

<{POST_SNAPBACK}>

OK mate. You seemed to indicate a cash transaction in the way you initially put it.

[Oswulf]

UK and Thailand have a double taxation agreement so I won't be taxed on pernsion income twice

<{POST_SNAPBACK}>

Technically this is incorrect. The current agreement between the UK and Thailand only covers government pensions. It doesn't cover state or personal persions.

Source: HM Revenue & Customs

Because the Thai government hasn't bothered double-taxing personal pensions to date doesn't mean that they won't in the future. (Remember, it's Thai Rak Thai - not Thai Rak Farang.) And for most people, to have two chunks of tax taken out of their pensions could be ... unfortunate.