Are There Any Tax Benefits ?

[tonika]

I've recently taken early retirement from my job in the UK, to settle here in Thailand with my Thai wife. I thought that my tax would now alter significantly on the 2 Local Government Pensions I receive. But it would appear there's not any difference. Also, I rented out my UK house, as I couldn't sell it due to the economic climate at present in the UK. But it seems this is also taxed at the same rate that I'd pay in the UK. And I'Il still have to fill in a HMRC tax form every year.

My question is, are there any tax benefits/concessions for moving here to Thailand ?. I just wondered, as you hear so much about Tax Exiles, Film Stars etc. moving abroad, to avoid the high taxes they pay in the UK.

[endure]

Any income that arises in the UK is taxed in the UK. You still get your personal allowance of course.

[Soutpeel]

sorry to say your pretty much stuffed..all income in the UK, taxed in the UK

[wordchild]

There are very very considerable tax benefits to being UK non res, but it does depend on your situation and, importantly, where/what your income comes from. The main benefit for many "tax exiles" is that any offshore (ie non UK and non Thai) income need not be subject to tax depending on how or if the money is then remitted into Thailand.

Also (contrary to what is oft repeated on this forum) it is just not true that all UK originating income is subject to the full UK tax rates for non residents; eg income from UK shares or (corporate) bonds (however large) is not subject to any additional taxation, other than the notional tax credit in the case of shares. If the income from these sources is greater than your personal allowance (and above the basic rate of tax in the case of shares ) then you can, as a non resident, opt to forego your allowance and have this income excluded completely from your UK tax liability.

Sadly, for many in Thailand, income from UK property for non residents is still subject to full UK tax. Also, in the case of pensions, the Thailand/UK double taxation agreement excludes pension payments so unlike expats in many other countries it is not possible for Thai resident expats to have their UK pension paid gross of UK tax..

Edited August 9, 2012 by wordchild

[Gone]

If you had worked in Thailand and have a Thai tax card then you could do what I did. When I went back to work on shut-downs in Canada I declared "tax exempt" as you are only allowed to pay taxes in 1 country. When we do shut-downs in Canada we make a shed load of money in a short period of time so the taxes can be greater then 50%. When I declare that money here instead, I would pay only around 22 - 30%.

I had to get a letter from Thai Immigration here stating that I am a resident same as when you buy a vehicle here etc then showed it to my company in Canada along with my Thai tax card.

[Soutpeel]

If you had worked in Thailand and have a Thai tax card then you could do what I did. When I went back to work on shut-downs in Canada I declared "tax exempt" as you are only allowed to pay taxes in 1 country. When we do shut-downs in Canada we make a shed load of money in a short period of time so the taxes can be greater then 50%. When I declare that money here instead, I would pay only around 22 - 30%.

I had to get a letter from Thai Immigration here stating that I am a resident same as when you buy a vehicle here etc then showed it to my company in Canada along with my Thai tax card.

Even if the OP did work in Thailand and had Thai tax card it still wouldnt help the OP...his pension is UK source therefore is taxable in the UK, as is the income on his property.....you are talking about something completely different, he could also get non-resident status as well, but it will not help him with these two aspects

[Gone]

If you had worked in Thailand and have a Thai tax card then you could do what I did. When I went back to work on shut-downs in Canada I declared "tax exempt" as you are only allowed to pay taxes in 1 country. When we do shut-downs in Canada we make a shed load of money in a short period of time so the taxes can be greater then 50%. When I declare that money here instead, I would pay only around 22 - 30%.

I had to get a letter from Thai Immigration here stating that I am a resident same as when you buy a vehicle here etc then showed it to my company in Canada along with my Thai tax card.

Even if the OP did work in Thailand and had Thai tax card it still wouldnt help the OP...his pension is UK source therefore is taxable in the UK, as is the income on his property.....you are talking about something completely different, he could also get non-resident status as well, but it will not help him with these two aspects

Yes I understand and agree Soutpeel. I was just mentioning some bennefits of tax here due to the post but yes you are 110% right.

[tonika]

Looks like I'm stuffed, and in a ' no win ' situation, regarding uk tax. Anyway, thanks to all that responded.

[davejones]

Any income that arises in the UK is taxed in the UK. You still get your personal allowance of course.

Once/if you become non-resident for tax purposes you don't get a personal allowance at all. So you could be worse off than you are now.

Benefits of being non-resident are that you don't have to pay CGT and you don't have to pay tax on earnings paid to you in the UK. The exceptions are things like tax on rent from UK properties.

If you sell your UK property in future years it could save you a fortune in CGT if you are non-res. But depends on value of property, how much it's risen in price, etc.

If you become non-resident then you can't pop back to the UK for free NHS treatment because you won't be eligible. Any pension you get won't be uprated with inflation each year, so will slowly but surely lose its value.

Edited August 10, 2012 by davejones

[Soutpeel]

If you become non-resident then you can't pop back to the UK for free NHS treatment because you won't be eligible. Any pension you get won't be uprated with inflation each year, so will slowly but surely lose its value.

Even if you are out the country for a certain period of time, even is not declared Non-resident for tax purposes, you still loose NHS treatment, and if are living out side the UK in Thailand you are not entitled to pension increases anyway, and if the OP is living in Thailand full time but maintaining an address in the UK to receive pension increases, he would actually be committing fraud, I know the rulesin place are wrong, but thats the way it is.

[endure]

Any income that arises in the UK is taxed in the UK. You still get your personal allowance of course.

Once/if you become non-resident for tax purposes you don't get a personal allowance at all. So you could be worse off than you are now.

This is incorrect. I know someone who's lived in Thailand for 20 years and has been non-resident for most of that time. He gets private and governent pensions and gets his full personal allowance set off against them.

[wordchild]

As a non resident ( living in Thailand) you can still retain your personal allowance and make use of it, however , under uk tax law,(and subject to the relevant double taxation treaty)you may also opt to forego your allowance if it would be of benefit to have certain parts of your income eg from share dividends treated as excluded income. In a nutshell if your income comes from a uk based pension and a uk based property (which cannot be treated as excluded income)and not much else , then you would be better to make use of your personal allowance to mitigate uk tax. if you have significant income from other financial assets eg shares (which are covered under double taxation) then you maybe better off opting to have this income excluded from your uk tax calculation so you would pay no tax on it though you would then not be able to use your personal allowance.

Edited August 10, 2012 by wordchild

[davejones]

Any income that arises in the UK is taxed in the UK. You still get your personal allowance of course.

Once/if you become non-resident for tax purposes you don't get a personal allowance at all. So you could be worse off than you are now.

This is incorrect. I know someone who's lived in Thailand for 20 years and has been non-resident for most of that time. He gets private and governent pensions and gets his full personal allowance set off against them.

Thanks for mentioning this. I use TaxCalc for submitting my tax return and when I select the non-resident option it sets the personal allowance to zero. This isn't the first time I've found a major flaw in this software. I may switch to something else next year.

[davejones]

Just checked and there was a box I needed to tick to get the allowance to show. So now by tax bill is reduced significantly.

[Pseudolus]

Tax exiles don't come to Thailand.

[davejones]

Tax exiles don't come to Thailand.

Probably not, but you can still save yourself a small fortune in tax by living here instead of the UK. I didn't move here to save tax, but the saving is a very welcome bonus.

[wordchild]

Tax exiles don't come to Thailand.

beg to disagree on that one; they most certainly do!