Thai Tax On Pension Lump-Sum

[factseeker]

Hi,

Wife and I both Europeans are now ready for a retirement in Thailand- (if they'll have us ;o)).

After much research on Thai Visa we decided to go for the 800K Baht deposit in a Thai bank method.

I was figuring to use the tax free 25% lump sum from my UK private pension ( as yet untouched ) to cover for the two 800K deposits - wife and myself.

Pension company are prepared to transfer the necessary total sum direct to a Thai Account in my name - I will then pass 800K to 'child bride' for her lump sum.

But having read through many Thai Visa threads I am now concerned ref a 'hit' for Thai tax on the total amount.

Would the tax free 25% lump sum from my private pension be considered as being 'earned' in this year.

I am now 70 years of age and my pension has been sitting in a Pension Company bank account since I was 65 waiting for my Ok to pay out.

So it seems to me that it could not really be construed as being earnt this year - but of course the funds are not in my name as yet.

If any cause for doubt I will use other funds.

Rgds. FS.

[Lite Beer]

If need be you only need one deposit of 800,000 baht for the two of you.

[lopburi3]

There has not been any report of tax issues on retirement money that I am aware of so do not believe you would have any questions asked; and as mentioned only one deposit is required as spouse can then use dependent status for a matching one year extension of a non immigrant O visa entry.

[factseeker]

There has not been any report of tax issues on retirement money that I am aware of so do not believe you would have any questions asked; and as mentioned only one deposit is required as spouse can then use dependent status for a matching one year extension of a non immigrant O visa entry.

Thnxs Lite Beer / Lopburi3,

I somehow picked up it had to be 2 x 800k - seems pretty conclusive only 1 x.

News getting better all the time - we will start into this whole thing come New Years day - think it should all be OK.

Gotta get that Bank Account and rest should follow.

Best Rgds.

FS.

[Lite Beer]

From Police Order 777/2551

For You:

2.22 In the case of a retiree: Permission will be granted for a period of not more

than 1 year at a time.

(1) The alien has obtained a temporary visa (NON-IM);

(2) The applicant is 50 years of age or over;

(3) Proof of income of not less than Baht 65,000 per month; or

(4) Account deposit with a bank in Thailand of not less than

800,000 Baht as shown in the bank account for the past 3 months at the filing date of the application. For the first year, the applicant should have that amount in his bank account for not less than 60 days or

(5) Annual income plus bank account deposit totaling not less

than Baht 800,000 as of the filing date of application

For your Wife:

2.20 In the case of a family

member of an alien who has been permitted temporary

stay under clauses 2.1, 2.2, 2.3, 2.5, 2.6,2.7, 2.10, 2.12, 2.13,2.4, 2.15, 2.16, 2.17,

2.21, 2.22,2.26,6.29 of this Order (applicable only to parents, spouse, child, adopted child or child of

his/her spouse):

Permission will be

granted for a period of

not more than 1 year at a time.

(1) The alien has obtained a temporary visa (NON-IM);

(2) Proof of family relationship;

(3) In the case of a spouse, the marital relationship shall be de

jure (legitimate) and de facto;

[NancyL]

The OP can have his wife as a dependent on his visa and thus only have to deposit 1 x 800,000 baht. However, she will not have her own visa and if something happens to the marriage, like divorce or death of the OP, then she'll have to scramble to line up her own visa during a time when she will probably have many other problems to deal with. It's not a kind thing to do to your wife. Hubby insisted that I obtain my own visa, even though (in the case of the OP) it would mean having 2 x 800,000 baht in a Thai bank. (In our case, Hubby uses income method and I have bank account to support financial requirements of our visas)

[lopburi3]

In the case of divorce suspect there would be plenty of time to line up your visa. In the event of death it might mean a small overstay charge if you can not leave immediately but you could easily obtain a non immigrant O visa with an overnight trip to enter for 90 days and have time for the 60 days required for bank account extension for retirement. I do not believe it would be much of a factor for 99% of people and only a small item for the 1% that might be effected.

But then again I do understand some people do not mind paying insurance even for minor things and that it may be cheaper than Prozac for some of us older folks.

[JohnC]

A friend in Pattaya has been taxed on the interest earned on his lump sum in a Thai bank but he has also been able to claim it back from the tax office in Pattaya!

[SantiSuk]

A friend in Pattaya has been taxed on the interest earned on his lump sum in a Thai bank but he has also been able to claim it back from the tax office in Pattaya!

That's because it's income arising in Thailand, which is completely different from a pension lump sum generated from eanings of prior years outside Thailand. Not a relevant concern to the OP.

If the OP has no income arising in Thailand and no earnings from the current year remitted to Thailand and could, in the unlikely event it was challenged, justify that position, he has no need to register or to complete a tax return in Thailand and the Thai taxation authorities are very unlikely under current precedent to make any enquiries in any event.

If challenged simply explain how the lump sum arose and demonstrate that it is in reality no more than a return on savings made in previous years out of funds generated from previous years' earnings, all happening outside Thailand.

[factseeker]

The OP can have his wife as a dependent on his visa and thus only have to deposit 1 x 800,000 baht. However, she will not have her own visa and if something happens to the marriage, like divorce or death of the OP, then she'll have to scramble to line up her own visa during a time when she will probably have many other problems to deal with. It's not a kind thing to do to your wife. Hubby insisted that I obtain my own visa, even though (in the case of the OP) it would mean having 2 x 800,000 baht in a Thai bank. (In our case, Hubby uses income method and I have bank account to support financial requirements of our visas)

Hello Nancy,

Thought there was some reason - I remember now you made this point in a previous thread.

Guess I will be doing the honourable thing. ;o))

This Forum is great and I thank you all for the really good advice etc.

FS.

[NancyL]

The OP can have his wife as a dependent on his visa and thus only have to deposit 1 x 800,000 baht. However, she will not have her own visa and if something happens to the marriage, like divorce or death of the OP, then she'll have to scramble to line up her own visa during a time when she will probably have many other problems to deal with. It's not a kind thing to do to your wife. Hubby insisted that I obtain my own visa, even though (in the case of the OP) it would mean having 2 x 800,000 baht in a Thai bank. (In our case, Hubby uses income method and I have bank account to support financial requirements of our visas)

Hello Nancy,

Thought there was some reason - I remember now you made this point in a previous thread.

Guess I will be doing the honourable thing. ;o))

This Forum is great and I thank you all for the really good advice etc.

FS.

Factseeker -- you're very kind to call it "honourable" to set up the funds for your wife to have her own visa, but I wouldn't think of it in that light. It really depends upon how willing/able your wife would be to sort out everything upon your death. The procedure that Lopburi3 outlined is simple, but could be overwhelming for someone who has never handled the details of their visa. With Lopburi3's method, though, I'd question if your wife would have access to your 800,000 baht account in time to open an account in her name to "season" for 60 days prior to her first retirement extension of her new "O" visa. It wouldn't be a problem if you get a Thai Will that clearly spellings out that the 800,000 baht account is to pass to her. But, if your Will is a foreign Will it may take time for it to be probated in Thailand and delay her having access to your 800,000 baht account.

Remember that 800,000 baht account can't be a joint account. The need for a Thai Will has been discussed in my "home" TV forum -- the Chiang Mai forum. Some say you don't need a Will for the 800,000 baht account if that account has ATM access. The spouse can simply clean out the account with the ATM card, but that depends upon the grieving spouse being able to do that before the bank finds out about the death of the account holder. Remember, there are daily limits to how much can be withdrawn with an ATM card. Also, the ATM account earn less interest than the fixed accounts, which can't be accessed with an ATM card.

I know that if Hubby suddenly passed away here, I'd have many details to take care of and wouldn't have the time or clarity of thinking to start playing games with the bank to spirit funds from accounts solely in his name. (Besides, Hubby is in a service club with the bank manager, so his death would be hard to hide!)

[MrMuddle]

A friend in Pattaya has been taxed on the interest earned on his lump sum in a Thai bank but he has also been able to claim it back from the tax office in Pattaya!

Hi JohnC, I'd be grateful if you could find out which form is needed to reclaim tax, I've been paying tax on my 800K for several years now, it would be nice to get it back. Thank you.

[Naam]

Remember that 800,000 baht account can't be a joint account.

a fairy tale, no matter how often it is repeated. our 800k are since 7 years in a joint account and so are the 800k of at least four foreign couples i know.

the bank will however issue a "guarantee letter" covering one of the names only and we are asked each year what name should appear on that document.

the only reason i can think of why this fairy tale is spread is that (we all know) different immigration offices apply different rules according to their whims, perhaps the quality of their breakfast eggs or the ambient temperature.

thanks for not listening :jap:

[NancyL]

Remember that 800,000 baht account can't be a joint account.

a fairy tale, no matter how often it is repeated. our 800k are since 7 years in a joint account and so are the 800k of at least four foreign couples i know.

the bank will however issue a "guarantee letter" covering one of the names only and we are asked each year what name should appear on that document.

the only reason i can think of why this fairy tale is spread is that (we all know) different immigration offices apply different rules according to their whims, perhaps the quality of their breakfast eggs or the ambient temperature.

thanks for not listening :jap:

Naam -- which Immigration office do you deal with? I've been told in Chiang Mai that it must be a sole account.

Factseeker -- I do know some married couples who use the same 800,000 baht to support two visas by having their retirement extensions offset by 6 months. The money needs to be seasoned for just 90 days for a retirement extension, so it's possible for a couple to "share" the 800,000 baht by shifting it between two accounts, each solely in the name of one spouse. One moves it into the account of the other once their annual retirement extension is granted.

[Naam]

Naam -- which Immigration office do you deal with? I've been told in Chiang Mai that it must be a sole account.

we do it in Pattaya Nancy.

i'm not sure whether i remember correctly but i think i read in another thread that the sole account is mandatory when it concerns Farang husband / Thai wife.

[Artisi]

A friend in Pattaya has been taxed on the interest earned on his lump sum in a Thai bank but he has also been able to claim it back from the tax office in Pattaya!

That's because it's income arising in Thailand, which is completely different from a pension lump sum generated from eanings of prior years outside Thailand. Not a relevant concern to the OP.

If the OP has no income arising in Thailand and no earnings from the current year remitted to Thailand and could, in the unlikely event it was challenged, justify that position, he has no need to register or to complete a tax return in Thailand and the Thai taxation authorities are very unlikely under current precedent to make any enquiries in any event.

If challenged simply explain how the lump sum arose and demonstrate that it is in reality no more than a return on savings made in previous years out of funds generated from previous years' earnings, all happening outside Thailand.

Can anyone expand a little on this discussion.