Living in Thailand and UK Tax.

[andrewross]

Hello, Does anyone know how long you have to stay out of the UK not to pay UK tax on online income. Cheers.

[slightlychilled]

No set time, you need to apply for non-uk resident status which you can do by filling out forms at your local tax office.

If you live in Thailand permanently you do realise don't you that you are liable for tax to the Thai authorities for ALL WORLDWIDE income ?

With agreements in exchange of information etc etc, once in a system they've got you forever one way or another.

[andrewross]

Hello SC

Thanks for your reply. No I didn't realise you had to pay tax in Thailand on foreign oncome, but I do know a little of tax paid in other countries due to double tax agreements. I will live in Thailand some months of the year and less in the UK. I think there is something about being out of the UK more than 90 days. But no, i didn't realise about paying tax on worldwide income and being had wherever you go. What about being paid into an offshore account etc. I wonder.

[Rooo]

Moved to Home Country Forum.

[JAS21]

slightlychilled, on 02 Mar 2015 - 05:18, said:slightlychilled, on 02 Mar 2015 - 05:18, said:

No set time, you need to apply for non-uk resident status which you can do by filling out forms at your local tax office.

If you live in Thailand permanently you do realise don't you that you are liable for tax to the Thai authorities for ALL WORLDWIDE income ?

With agreements in exchange of information etc etc, once in a system they've got you forever one way or another.

I think that you will find the status you need is Non Resident and Not Ordinary Resident ... and maybe a Non Resident Landlord if you rent out property .... you still remain liable to pay UK tax on all UK generated income.

There is a Topic about possibility of loosing your Tax Free Allowance at sometime in the near future.

The UK has a Double Taxation Agreement with Thailand which means that you are not taxed twice. However you should not bring money to Thailand in the year that it is earned in the UK.

That is the basics. Every year I claim my Thailand savings withholding tax back ... plenty of topics on this also.

Edited March 2, 2015 by JAS21

[chiang mai]

No set time, you need to apply for non-uk resident status which you can do by filling out forms at your local tax office.

If you live in Thailand permanently you do realise don't you that you are liable for tax to the Thai authorities for ALL WORLDWIDE income ?

With agreements in exchange of information etc etc, once in a system they've got you forever one way or another.

I do not believe that is correct, income earned outside of Thailand is not taxable here unless it is remitted here during the year it was earned.

[Jip99]

I think that the OP is looking for ways to avoid paying income tax.

The fact remains that income generated anywhere is subject to tax somewhere. Just because that income is paid into an offshore does not avoid the legal requirement to declare it to the appropriate authorities.

I agree that routing it into an offshore accounts makes it harder, at least theoretically, for the tax authorities to pick it up. But then that would be tax avoidance - which is illegal, and outside forum rules to discuss.

[slightlychilled]

I think that you will find the status you need is Non Resident and Not Ordinary Resident ... and maybe a Non Resident Landlord if you rent out property .... you still remain liable to pay UK tax on all UK generated income.

I don't think it is on ALL UK generated income but it certainly is on any property you own and rent out. I live and work outside the UK - for over 20 years now, but I still have to pay tax on all rental income in the UK to the UK tax authorities.

[JimGant]

you still remain liable to pay UK tax on all UK generated income.

But, then, can anyone shed light on this quote, which I found at: http://www.wiseandco.co.uk/non_residence_income_tax.html

The benefits of non residence for income tax

Those who are non UK resident for tax purposes have no liability to tax on foreign sources of income and they also benefit from an upper limit on UK tax liability in respect of UK sources of income, this limit being framed in rather complex terms. The broad effect of the limitation is that, although no personal allowances will be given, the significant benefit applies that there can be no liability to UK tax on certain UK income sources. These sources are bank interest, dividends from UK companies and authorised unit trusts, the UK state pension, occupational pensions and annuities paid under an approved retirement annuity contract. Note that this list does not include pensions from personal pension schemes and SIPPs.

Once the above mentioned UK sources of income have been identified, they are also disregarded in calculating the UK tax liability on any other sources of UK income, for example rents. This will help to reduce the tax due on such other UK source income.

It should be noted that becoming non resident will not succeed in avoiding tax liability on the exercise of unapproved share options granted whilst resident in the UK.

If a person has UK rental income and is going abroad to live, he or she should register with HMRC for the non-resident landlord’s scheme.

"No Personal Allowances will be given" Has the UK gone ahead and disallowed the PA for non-residents? I thought this was still under discussion....

No UK tax on State Pension or private pensions generated in the UK for non residents....is that really true?

"...an upper limit on UK tax liability in respect of UK sources of income, this limit being framed in rather complex terms." Complex, indeed.

Curious.

[chiang mai]

you still remain liable to pay UK tax on all UK generated income.

But, then, can anyone shed light on this quote, which I found at: http://www.wiseandco.co.uk/non_residence_income_tax.html

The benefits of non residence for income tax

Those who are non UK resident for tax purposes have no liability to tax on foreign sources of income and they also benefit from an upper limit on UK tax liability in respect of UK sources of income, this limit being framed in rather complex terms. The broad effect of the limitation is that, although no personal allowances will be given, the significant benefit applies that there can be no liability to UK tax on certain UK income sources. These sources are bank interest, dividends from UK companies and authorised unit trusts, the UK state pension, occupational pensions and annuities paid under an approved retirement annuity contract. Note that this list does not include pensions from personal pension schemes and SIPPs.

Once the above mentioned UK sources of income have been identified, they are also disregarded in calculating the UK tax liability on any other sources of UK income, for example rents. This will help to reduce the tax due on such other UK source income.

It should be noted that becoming non resident will not succeed in avoiding tax liability on the exercise of unapproved share options granted whilst resident in the UK.

If a person has UK rental income and is going abroad to live, he or she should register with HMRC for the non-resident landlord’s scheme.

"No Personal Allowances will be given" Has the UK gone ahead and disallowed the PA for non-residents? I thought this was still under discussion....

No UK tax on State Pension or private pensions generated in the UK for non residents....is that really true?

"...an upper limit on UK tax liability in respect of UK sources of income, this limit being framed in rather complex terms." Complex, indeed.

Curious.

What is the source of your quotes because the second one is wrong, everyone gets a personal allowance, for the time being.

[rijit]

are there any advantages for landlords to register for the overseas land lord scheme ?

Sent from my GT-I9000 using Thaivisa Connect Thailand mobile app

[JimGant]

What is the source of your quotes because the second one is wrong, everyone gets a personal allowance, for the time being.

http://www.wiseandco.co.uk/non_residence_income_tax.html

Yeah, that's what I thought. The article, in fact, is several years old -- before the ongoing discussion on eliminating the PA had even hit stride... Not sure who these guys are -- or why they seem to have so much conflicting information.

So, then, is the following still pretty much correct: you still remain liable to pay UK tax on all UK generated income.

[chiang mai]

What is the source of your quotes because the second one is wrong, everyone gets a personal allowance, for the time being.

http://www.wiseandco.co.uk/non_residence_income_tax.html

Yeah, that's what I thought. The article, in fact, is several years old -- before the ongoing discussion on eliminating the PA had even hit stride... Not sure who these guys are -- or why they seem to have so much conflicting information.

So, then, is the following still pretty much correct: you still remain liable to pay UK tax on all UK generated income.

Yes, although the personal allowance provides a buffer on the first £10,500 of income.

[Jip99]

are there any advantages for landlords to register for the overseas land lord scheme ?

Sent from my GT-I9000 using Thaivisa Connect Thailand mobile app

Cash flow..... and an element of control.

Without a NRL1 tax must be deducted at source (and perhaps claimed back later).

With a NRL1 rent continues to be paid gross and you submit an annual tax return.

[KittenKong]

So, then, is the following still pretty much correct: you still remain liable to pay UK tax on all UK generated income.

No.

The quote given is absolutely correct IF you dont have any income that is not described in it:

" The broad effect of the limitation is that, although no personal allowances will be given, the significant benefit applies that there can be no liability to UK tax on certain UK income sources. These sources are bank interest, dividends from UK companies and authorised unit trusts, the UK state pension, occupational pensions and annuities paid under an approved retirement annuity contract."

I have a lot of UK dividend and UK gross interest income, none of which is liable to tax in the UK beyond any deducted at source. But I do lose the personal allowance (no big deal as I have no taxable UK income).

Anyone with other UK income that is not included in the above list should think carefully about what is best in their own situation, as they will be liable to tax on it and so may want to retain the personal allowance. It really all depends on how much the income is.

[JimGant]

But I do lose the personal allowance (no big deal as I have no taxable UK income).

Why do you lose the PA? And, you have no State Pension, thus no taxable UK income?

[KittenKong]

But I do lose the personal allowance (no big deal as I have no taxable UK income).

Why do you lose the PA?

Because that is a condition of the concession. Either you benefit from those income sources not being liable to tax or you keep your PA. Up to you.

And, you have no State Pension, thus no taxable UK income?

I'm retired but I'm a long way from the state pension claiming age.

You will note that the state pension was included in the list of acceptable revenue sources anyway.

[chiang mai]

Just to check: you are a UK citizen KK, correct?

[kickstart]

What is the source of your quotes because the second one is wrong, everyone gets a personal allowance, for the time being.

http://www.wiseandco.co.uk/non_residence_income_tax.html

Yeah, that's what I thought. The article, in fact, is several years old -- before the ongoing discussion on eliminating the PA had even hit stride... Not sure who these guys are -- or why they seem to have so much conflicting information.

So, then, is the following still pretty much correct: you still remain liable to pay UK tax on all UK generated income.

Yes, although the personal allowance provides a buffer on the first £10,500 of income.

I have been renting my uk flat for the past 10 years, I go back about every 2 years ,check it over stay 2 months,decorate the place, then come back to LOS ,I use to fill in a tax form every year,but by the time I took off what I could claim ect,the tax man said it did not reach my personal allowance, so I paid no tax,about 5 years ago they said "we will not send a tax return,but if my circumstances change let us know",I thought they are not making any money from me ,so they are not bothering with me.

But, I use an agency to over see the flat ,and they charge me commission,no issue, but I still have to pay VAT on the commission,I said why I do not pay income tax I am,classed as non resident ,so why pay VAT.all customs and excise said," you do" ,end of coversation.

[KittenKong]

Just to check: you are a UK citizen KK, correct?

Yes.

[Jip99]

What is the source of your quotes because the second one is wrong, everyone gets a personal allowance, for the time being.

http://www.wiseandco.co.uk/non_residence_income_tax.html

Yeah, that's what I thought. The article, in fact, is several years old -- before the ongoing discussion on eliminating the PA had even hit stride... Not sure who these guys are -- or why they seem to have so much conflicting information.

So, then, is the following still pretty much correct: you still remain liable to pay UK tax on all UK generated income.

Yes, although the personal allowance provides a buffer on the first £10,500 of income.

I have been renting my uk flat for the past 10 years, I go back about every 2 years ,check it over stay 2 months,decorate the place, then come back to LOS ,I use to fill in a tax form every year,but by the time I took off what I could claim ect,the tax man said it did not reach my personal allowance, so I paid no tax,about 5 years ago they said "we will not send a tax return,but if my circumstances change let us know",I thought they are not making any money from me ,so they are not bothering with me.

But, I use an agency to over see the flat ,and they charge me commission,no issue, but I still have to pay VAT on the commission,I said why I do not pay income tax I am,classed as non resident ,so why pay VAT.all customs and excise said," you do" ,end of coversation.

Correct - it is effectively a sales tax. You buy petrol in the UK it has VAT on it, you buy a hot sausage roll it has VAT on it, you buy....... you get my drift.

[JimGant]

Why do you lose the PA?

Because that is a condition of the concession. Either you benefit from those income sources not being liable to tax or you keep your PA. Up to you.

K Kong,

Who do you see and/or what forms do you fill out to trade your PA for tax exemption on certain UK income (including the State Pension)? (And, as you say, who needs the PA if there's no income to bang it up against....)

Another thread running has a UK citizen, who is aircrew flying out of Heathrow -- but who meets all the criteria, some of it new (no home or family in the UK), that classifies him as a non resident. As such, he pays no income tax on his airline pay, which I assume (maybe wrongly, as he didn't say) is paid by a UK airline. He says many aircrew do the same -- and he even files an annual tax return (which shows zero taxes owed).

Obviously, there is some (a lot?) of wiggle room in the UK tax code if you're a non resident. And one would be daft not to take advantage of it (especially for Thai expats, who aren't subject to Thai income tax on external earnings remitted in a later year).

[KittenKong]

Who do you see and/or what forms do you fill out to trade your PA for tax exemption on certain UK income (including the State Pension)? (And, as you say, who needs the PA if there's no income to bang it up against....)

I've never seen anyone.

I used to fill in a normal self-assessment form. You just complete the sections that are relevant to residency and they do the calculations. As I have no liability they dont even send me the form any more.

[partington]

Who do you see and/or what forms do you fill out to trade your PA for tax exemption on certain UK income (including the State Pension)? (And, as you say, who needs the PA if there's no income to bang it up against....)

I've never seen anyone.

I used to fill in a normal self-assessment form. You just complete the sections that are relevant to residency and they do the calculations. As I have no liability they dont even send me the form any more.

This is correct. I also looked at this carefully and there is a page on the HMRC website that deals with it

http://www.hmrc.gov.uk/manuals/salfmanual/salf706.htm

In effect it states that, for non-residents tax on most kinds of investment income generated in the UK (bank interest, stock dividends and so on, but not rent income) is limited to the tax (if any) already subtracted at source providing you do not claim your personal allowance.

It's a fairly easy calculation to determine whether it is more tax beneficial for you to not claim your personal allowance, pay any tax due on rental income, and consequently avoid paying any tax on investment income, or whether you end up paying less tax by claiming your personal allowance and having to pay tax due on all UK generated income, both rental and investment.

With a personal allowance of £10,000 at present still allowable, you would need to be making quite a lot of investment income to make not claiming the personal allowance beneficial.

I'm very interested as to what they will do about this concession if , as has been mooted, the personal allowance for non-residents is scrapped.

EDIT: note I have just noticed the above link is out of date ( I looked at this some years ago and bookmarked it). Checking now all the tax websites seem to have changed, so I can't guarantee the concession referred to is still current! I'll have to look again, so I'm glad this thread has motivated me to recheck!

Edited March 6, 2015 by partington

[JimGant]

Who do you see and/or what forms do you fill out to trade your PA for tax exemption on certain UK income (including the State Pension)? (And, as you say, who needs the PA if there's no income to bang it up against....)

I've never seen anyone.

I used to fill in a normal self-assessment form. You just complete the sections that are relevant to residency and they do the calculations. As I have no liability they dont even send me the form any more.

Thanx, KK.

You said:

I have a lot of UK dividend and UK gross interest income, none of which is liable to tax in the UK beyond any deducted at source.

Why would this even be subject to withholding at source, based on the wise and co link, above:

...there can be no liability to UK tax on certain UK income sources. These sources are bank interest, dividends...

Couldn't you have the payee of your dividends and interest stop withholding, based on whatever rules you're operating under? (Or file a tax return to have these over-withholdings reimbursed...?)

Whoops. I see partington already found the answer while I had been typing. Thanks, partington.

Edited March 6, 2015 by JimGant

[partington]

Who do you see and/or what forms do you fill out to trade your PA for tax exemption on certain UK income (including the State Pension)? (And, as you say, who needs the PA if there's no income to bang it up against....)

I've never seen anyone.

I used to fill in a normal self-assessment form. You just complete the sections that are relevant to residency and they do the calculations. As I have no liability they dont even send me the form any more.

Thanx, KK.

You said:

I have a lot of UK dividend and UK gross interest income, none of which is liable to tax in the UK beyond any deducted at source.

Why would this even be subject to withholding at source, based on the wise and co link, above:

...there can be no liability to UK tax on certain UK income sources. These sources are bank interest, dividends...

Couldn't you have the payee of your dividends and interest stop withholding, based on whatever rules you're operating under? (Or file a tax return to have these over-withholdings reimbursed...?)

Whoops. I see partington already found the answer while I had been typing. Thanks, partington.

No problem- just as a follow up I've found the current tax information from July 2014- seems the same concession applies as was detailed on my previous out of date link.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/323719/hs300.pdf

Edited March 6, 2015 by partington

[chiang mai]

I must confess that's the first time I've heard about the concession.

[KittenKong]

I'm very interested as to what they will do about this concession if , as has been mooted, the personal allowance for non-residents is scrapped.

I see no obvious reason why anything should change.

The concession is designed to encourage inward investment in the UK by non-residents. If they are taxed most of them would just move their investments elsewhere, which would only hurt the UK.

[Jip99]

I must confess that's the first time I've heard about the concession.

Me too......... and that bothers me slightly.

[KittenKong]

I've been using it for years, as have many other people. It's not hidden and in fact HMRC apply it themselves automatically if you qualify and if you fill the form in correctly.