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1 hour ago, LivinLOS said:
No it is not.. I am unsure why people repeat and believe this, the information is easy to check online.
https://www.gov.uk/state-pension-if-you-retire-abroad/tax-on-your-state-pension
https://www.gov.uk/tax-uk-income-live-abroadWhen tax is not due or is already deducted
Non-residents do not usually pay UK tax on:
- the State Pension
- interest from UK government securities (‘gilts’)
If you live abroad and are employed in the UK, your tax is calculated automatically on the days you work in the UK.
Income Tax is no longer automatically taken from interest on savings and investments.
Yup - I read the info on the website for your included text "When tax is not due.... Non residents do not usually pay UK tax on state pensions" - I got a different interpretation of what it was saying and the way I read this Is: if normally a non resident does not pay tax on state pensions (because it is below the personal allowance) then no tax is payable. However your interpretation is - If you are non resident then you do not need to pay tax on the state pension.
I can see that it might be interpreted in two ways and I am now not totally convinced which might be the absolute correct interpretation. However the same HMRC website you provided the link for also says.
You usually have to pay tax on your UK income even if you’re not a UK resident. Income includes things like:
- pension
Also what would be more decisive is what is in the Thailand DTA. While it is a little bit inconclusive, this seems to identify taxation by the UK of Gov pensions, but it is not totally clear if this is referring to state pensions or government employment pensions or possibly both - ARTICLE 19.—(1) (a) Remuneration, other than a pension, paid by a Contracting State or a political subdivision or a local authority thereof to any individual in respect of services of a governmental nature rendered to that State or subdivision or local authority thereof shall be taxable only in that State
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8 minutes ago, LivinLOS said:
That will depend on if you 'should' pay tax in your homne country..
If you filed a P85 when you became non resident of the uk, you shouldnt be paying taxes there.With the proviso - UK government state pension remain liable to tax in the UK no matter where you are resident.
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1 hour ago, JimGant said:
.... from current or past years; any and all monies from a financial account established pre 2024, where the balance on 31 Dec 2023 exceeds any and all monies remitted
Mnnn - Good info.
So for example with £175,000 inside a savings account on 31 Dec 2023 - Then remitting 65k Thb / month (Approx. £17,500 / yr) to a Thai Bank for Visa ext. This essentially provides 10yrs of remittance that is free from taxation - Am I understanding you correctly?
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For UK pensioners currently who have not disclosed their stay in Thailand in order to retain indexation increases annually, but want to claim the dual taxation relief, presumably they will have then effectively disclosed their Thai residency and have then prevented any future pension increase (subject to the automatic UK / overseas tests).
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16 minutes ago, Mike Lister said:
It's not complicated. A self employed Thai can take a standard deduction and deduct 60% of their cost of sales which means only 40% is assessible to tax. By the time Exemptions and allowances are applied, there's little left to tax. If anyone has heard this before, look away now.....but my wife runs a business this way and makes 50k a month tax free....it';s far too easy and far too generous.
Just identifying the percentages for taxation allowance is missing my point, calculating numbers in a spreadsheet is not complicated. I was referring to when a Tax is being considered for a formal case investigation. Inspectors are aware of collecting evidence and building a case can be complicated. If the suspect is considered as not truthful and for example its believed they are selling more than stated, where spoils/wastage are less than claimed etc. Investigations can be grey area considerations and this requires more work in determining what is truthful. It would be far more beneficial to optimise efforts for any Tax investigation when none of these grey areas exist. With an expat the consideration are more black and white and hence become quicker, easier and more productive to investigate.
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1 hour ago, Mike Lister said:
A person registered as self employed, can make a lot of money without having to pay tax.
Mnnnnn - Its a good point about the Tax allowances for working Thai's. These working allowance will be mostly unavailable to expats on a retirement Visa. This will make it more beneficial to optimise efforts for a Tax investigation on expats since they will likely not pose this same complication.
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4 hours ago, atpeace said:
The concern is that almost 50% Americans, myself included, pay little to no tax on their federal tax. Most to many Americans through legal tax deductions/credits pay little to nothing for the first 50K dollars each year. In Thailand that number is reduced to around $4kand theoretically retirees would have to pay taxes on the amount above 4k that was never taxed if brought into Thailand. All this is a guessing came but interesting nonetheless.
Very little concern on my end and doing things to reduce the risk. For example, drawing down my 800k retire visa amount so I don't bring much money into the country this year seems wise? We will have a better idea in the coming year but why take risks that can be avoided with little effort. This is why this thread is interesting - easy to plan for something with more info.
Can you just clarify a little more on what you have identified - "Most to many Americans through legal tax deductions/credits pay little to nothing for the first 50K dollars each year. In Thailand that number is reduced to around $4kand theoretically retirees would have to pay taxes on the amount above 4k that was never taxed if brought into Thailand."
I am unfamiliar with US Federal Taxation and am not sure if the "legal tax deductions/credits" that you identify if they are simply Tax allowances or they belong to some other method. For example in the UK there are available personal allowance on earnings £12,570, savings interest allowance (approx.) £6,000, Dividends allowance £500 (April 2024), capital Gains allowance £3,000 (April 2024). Hence it would be theoretically possible up to £22,070 is taxed at 0%. This means that all the £22,070 has been taxed and would be allowable for DTA (if all allowances are observed by Thailand).
Referring back to your post - If the first $50k is the equivalent to the UK £22,070 (taxed at 0%) isn't then in your example, the tax free amount available to bring into Thailand without being taxed, $50K rather than $4k.
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11 minutes ago, Mike Lister said:
I have some sympathies with these posts but the reality is quite different from what you think. If anything, I am the one who should be fed up with the repetition because I'm the one who has to moderate all the issues and answer the questions.
The fact is that repeat threads such as this introduce new questions and issues that haven't been identified thus far and that require further research and an answer. This morning alone, I added four new unknows/unclear points to the end of the simple tax guide, issues that need answers. That is excellent, it means we are finding gaps and plugging them.
We've also seen in this thread that several people have asked questions for the first time and have started to think about their own personal circumstances, that was the objective in all of this at the outset. There are still lots of people out there who haven't even looked at the tax issue or who haven't made a decision about what they need to do.
So whilst you, and I, may be tired of the repetition, please understand that you are not typical of everyone out there, you know and understand, many don't. Threads like this are really useful in helping those people to become aware and understand what's involved.
Excellent balanced positional response.
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5 hours ago, UKresonant said:
Some thinking out loud...
I expect no DTA effect at all. I would prioritise your tax residency status, of when the funds were placed into the ISA.
I think I would try not to remit ISA proceeds to Thailand. and have now associated an ISA to a totally different bank, to which my pre-taxed pensions are paid to in the UK. I would expect the state pension to go where my ISA goes to if / when I eventually get it as not taxed at source.
I think the only way to be reasonably safe, is to avoid any input to that ISA after 31st December of the year before you to become / became tax resident in Thailand, if an event does not decided your timing in lieu of any plan. Then at least that valuation point the capital value is excluded from Thai Tax, as created when not Thai Tax Resident.
You still have an opportunity you start another ISA the April before the year you move to Thailand and can still deposit to that one in the UK tax year of the move. There may be multiple resident non- resident swings!
(If it is a Stocks and Shares ISA it could be a churning of the funds whilst still UK Tax resident to give more recent base value points could be a goer, if you think you may later have to withdraw and remit to Thailand)
A corporate action could initiate a disposal scenario within the tax free wrapper, and an associated gain.
I would ignore events within the tax Free Wrapper in the UK, but dividends being paid out perhaps can't excepting they will be all trailed to UK expenditure, so not a remit to Thailand issue, unless a force Majeure arises.
Unfortunately I understand the ISA wrapper will have zero recognition in Thailand.
All phrased from my Non-Thai Tax resident current status view point! The UK is my centre of vital interest (DTA speak), having only one very special interest present in Thailand currently.
Will wait and see for further info......
You make some very good points here and on the whole I agree with your logic. Obviously much is current speculation, but speculation that is well thought out like this educates - understanding all the issues that might happen, allows the reader to better comprehend the actual situation when it does happen - Context in complexity is what drives better decisions.
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1 hour ago, JimGant said:
Not sure where on all these threads to jump in on -- but maybe here's ok.
Early in this drill we saw where Thai RD said, "have a DTA and show a tax return from home country -- and you're home free from Thai taxation." I think their original thinking is still in place.
Why? Because of the simplicity, and thus no new hires and expenses to deal with tax credits against Thai taxation, whatever. So, if you can show a tax return from your home country -- which has a DTA with Thailand (or maybe even not, as it really doesn't factor in) -- that's it. Show it to Immigration for your annual extension. They don't need to go through the numbers -- that would be nonsensical -- they just need to see a home country tax return, even it it doesn't indicate any taxes being paid (because standard deduction exceeds gross income, etc). Not that they would even notice, nor need to.
But, what if you have no home country tax return, because you're one of those lucky ones who haven't had to pay any taxes, to anyone, since retiring here in Thailand? Well, now, without a home country tax return to show, you now have to show a Thai tax return. And this tax return, if you've been honest, may just show taxes owed and paid. Or maybe not -- Immigration won't care -- they're just interested in the fact that you can produce a Thai tax return, in the absence of a home country tax return. Just another requirement, on top of a bank statement, TM30, whatever. No real additional cost to Immigration's overhead -- just the need to produce either a home country tax return, or a Thai tax return -- one more block for Immigration to check.
Anyway, seems logical to me. For those of us paying home country taxes, I guess (as a Yank), I'll just need to flash my 1040 return to Immigration. No home country tax return? -- well, best learn how to file a Thai tax return -- and welcome to the world of having to pay someone taxes. Fair is fair.
Good info and this makes sense - "they just need to see a home country tax return, even it it doesn't indicate any taxes being paid (because standard deduction exceeds gross income, etc)"
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1 hour ago, Mike Lister said:
The basic principle is that everyone pays tax somewhere so as long as you've done that and you try to import funds into Thailand where tax has already been paid in the home country, Thailand is unlikely to make any further tax demand on you. That said, there will almost certainly be examples where the difference in the tax rates between the two countries, COULD lead to additional tax being due here but for the most part, those will be anomalies.
The target for this tax rule is people who invest offshore and repatriate their earnings without paying tax anywhere. Another group is those who work here online and because they are remote workers, get paid in Thailand but are untaxed....and similar. Everyday people with savings and a home and a few investments, are not the target and are not going to be of interest to the RD.
Excellent response for clarification - Thank you.
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2 hours ago, atpeace said:
If this ends up being how taxes on pre 2024 income is treated then I would think many retirees have nothing to worry about at least for the next 5-10 years. For example if you have 400k US dollars in savings prior to 2024 and transfer 25k each year, disregarding inflation, you are cool for 16 years.
I'm a US citizen and FACTA is a mutual agreement that requires foreign banks to provide account balances as well as other info. Here is KrungThai's FACTA link - https://krungthai.com/en/content/about-ktb/corporate-governance/fatca#:~:text=FATCA requires foreign financial institutions,and US-Owned Foreign Entity. .
I've read many of your posts on this subject and appreciate all the personal effort you have put into providing factual info. I'm still uncomfortable a little with what will be implemented because I sense even you are only guessing on the outcome. If pre 2024 earned income can be brought to Thailand without having to mess with current investment earning, I'm as happy as a clam.
Excellent post identifying a valuable consideration - Saving prior to 2024 can (might) be used as a buffer against possible tax on remitted funds.
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1 hour ago, Mike Lister said:
Sure, we've had to make some assumptions along the way which I think is only reasonable but there's also a large helping of fact that underpins that and it is growing every week. Reading the following link, may help, if you haven't already done so, That Q&A made life a lot easier. https://sherrings.com/foreign-source-income-personal-tax-thailand.html
This helps a lot - Your response to atpeaceb with a very good question - for previous years taxed income, but now in savings - It is unlikely to be taxed when remitted to Thailand after 31st Dec 2023.
Therefore any such saving pot that has been held by a retiree outside the country can be regarded as a potential buffer against tax.
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16 minutes ago, UKresonant said:
Yes it may /will affect some Thai retirement strategies. In a similar way to the UK, reducing the capital gains allowance from£12k to £3k this year, of finding my Tax free in UK ISA investments likely to be treated as normal dividends and gains under Thai Tax . Now their tax free overseas investment retirement supplement will potentially be clobered for Tax 25-30%, on total return.
RD do seem to take a reasoned view with pensions , in that they are saying, that if taxed overseas, then not an issue apparently.
(Differs from UK HMRC, for example who are still pursuing UK pensioners who have been scammed out of their pension, for a 55% tax charge on the money they no longer have. As it was an unauthorised transfer or withdrawal! Members of parliament are trying to get them reeled back in, but they have been attacking their own nationals like this for years, (similar thing with a company trainingg scheme recently.)
I would expect them to have an undeclared internal threashold, on which they will preferentially pursue initially, to have resource Vs Tax yeild initially, on those aggressively using the previous rule and those avoiding OECD should be taxed somewhere theme.
Thais may end up with more static overseas portfolios ( hope that plane manufacturer can get it's act together...)
Mnnn - Actually you bring up a good point about ISA's - That is, if tax protected vehicles in the UK will be respected.
Most of the funds deposited into an ISA would be from earnings and would have been subject to Tax prior to deposit and If rather than used for making an ISA deposit the funds had been sent into Thailand, normally this would be DTA protected, hence unlikely to be Taxed in Thailand. However if in the tax year when funds are taken out of the ISA they are then remitted as resident in Thailand - Will the Tax free vehicle change the taxable status of the initial deposits which have already been taxed.
For example, for taxed income deposits of £100K in an ISA with an increase of say £5K tax free inside the ISA, then £20k is withdrawn, transferred out when resident in Thailand - Will this be treated as mixture of taxed/untaxed or will all withdrawn funds be considered as not taxed since its coming out from a tax free vehicle in the same year as it arrives in Thailand.
I suspect no one knows right now, but worth watching as further details emerge.
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1 hour ago, Mike Lister said:
If you are over age 65 for example, your TEDA is circa 350k baht which can effectively be added to the 150k zero rated tax band giving you around 500k baht tax free in Thailand every year. Add to that the fact that any income that is remitted where tax has already been paid in the home country, will not be taxed again and that tax will be credited against any Thai tax that is due. ASSUMING, that the Thai RD allows the UK PA, for example, to remain, and that pensions are taxed in the UK, that means that almost no Thai tax will be due on a pension of an average size and where tax is due, the TEDA relieves most of the tax stress.
If the example is a single person under age 65, the picture changes but still the fact that the money coming from the UK is taxed there, should mean virtually no tax is payable in Thailand because UK tax tables are higher than the Thai tax tables.
Ahhh - Good Clarification Response - You have highlighted that it is very important to consider - "If you are over age 65 for example, your TEDA is circa 350k baht which can effectively be added to the 150k zero rated tax band giving you around 500k baht tax free"
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7 hours ago, Mike Lister said:
Articles such as these help raise awareness and help educate many, we've seen ample evidence of that, that's why they are posted. If people panic it's probably because they are not informed, reading these threads helps change that.
Mike Lister is correct having Knowledge is strength. Rather than, 'War is peace. Freedom is slavery. Ignorance is strength.' George Orwell 1984.
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14 hours ago, UKresonant said:
For a slight overrun most likely, but with some doubt, unless they implement the Tax Clearance Certificate for individuals again, like they had in the early 90's(?) But probably very unlikely. could you imagine someone on an METV thats had one extension getting blocked at exit, unlikely hopefully.
Good information about the Tax clearance certificate - Also I think you are right METV tourists would be a big issue and rather confusing expecting Tax to be considered on Exit. There are around 2.6 million foreigners long term resident in Thailand and if eliminating the people from Lao, Myanmar and Cambodia (1.8 million), then about 800k other long term foreigners is a healthy number to start new Tax investigation activities. However probably initially the more important priority will be actual Thailand nationals, sufficiently wealthy who have been repatriating overseas funds at zero tax.
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13 hours ago, Mike Lister said:
Well spotted, you're one of those rare posters who have actually done their homework and read something, I like that. 🙂
One thing you may have not spotted is that there is an equivalent of the Personal Allowance on the Thai side. TEDA (Tax Exemptions Deductions and Allowances) for an over age 65 year old is roughly equivalent to the Personal Allowance. In a worst case scenario, the Thai RD disallows the UK PA, in which case the Thai TEDA compensates. In a best case scenario, the Thai RD allows the UK PA AND you get the Thai TEDA also.
Thanks for that - I appreciate the feedback.
I have factored this into the Tax calculation (But just for TEDA - Single personal allowance) arriving at £475 Tax to pay.
Also thanks to pauku1 the numbers in the spreadsheet look reasonable and are very useful in order to start some outline Tax planning.
As you rightly point out there are other allowances (Credit Mike Lister) - Taken from one of your previous posts
TEDA = Tax Allowance, Deductions & Exemptions
PA1 = 60,000 (personal Allowance for the tax filer)
PA2 = 60,000 (deductions for spouse)
OAE - 190,000 (over age 65 years exemptions)
PD - 50% of pension received, max 100,000 (deductions for pension income received)
ZR - zero rated for tax - 150,000 (the zero rated tax band in the tax tables)
The big surprise is possibly for anyone new to Thailand and who requires 800,000 Baht (Retirement) to satisfy the Visa requirement and gets charged (estimated using only single person 60K personal allowance) £800 in tax just to satisfying this requirement.
There is going to be a lot of armchair accountants that will try and figure out ways to eliminate this tax - One way would be to ensure the transferring of any funds are in the Tax year prior to arriving. Possibly also for anyone who is already long stay, leave the country for greater than 180 days (in the same Tax year) and buffer their account with a large lump sum for the non tax year. Obviously a lot of effort and a lot of funding.
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49 minutes ago, UKresonant said:
From 2024 on, if your over 179days in the calendar year and become Thai Tax resident, then the starting position is your under the Thai tax.
when ever you then bring gain into Thailand, which will be on Thai PIT rates. ( then of course all other considerations, DTA', it has been subject to tax etc)
(I made sure when doing sizable transactions in 2018, that I was not Thai tax resident that year, to eliminate the doubt.)
If you bring cash in and change it at the exchange booth, what do they do with the photcopy of your passport they take under a requirement of Bank of Thailand regulations?
It might be a good plan if you have the lifestyle option to move funds into Thailand in the tax year that you are not resident just to stay under the radar. but if its just about the odd time visiting and being over the 180 days by a few days or even a few weeks these type of infrequent occurrences is probably not going to be worth the effort for the Tax to capture. The more likely first targets will probably be low hanging fruit, such as long term recurring tax paying expats on NON-IMMIGRANT VISA "O" who must provide full details where they live and a financial statement annually.
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2 hours ago, pauku1 said:
Nice Work - Thanks for doing the upload - All sensible and considered information while working as a group benefits everyone when something new like this needs better understanding.
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While some tax might be saved through Dual Taxation relief, in the case of a UK pensioner this might not be as clear cut as identified in the article, which says…
"John’s pension, while now subject to tax in Thailand, might find some relief through a double taxation agreement between the UK and Thailand."
The double taxation treaty means that any pension income, should it be private pensions or state pension, is taxed locally in the UK, but can not be double taxed by Thailand.
In the agreement between Thailand and UK, within the section that relates to UK personal allowances, how they will be treated in Thailand in set out below.
4) Nothing contained in this Article shall be construed as obliging either Contracting State to grant to individuals not resident in that State any of the personal allowances, reliefs and reductions for tax purposes which are granted to individuals so resident.
Rewriting this in more straightforward simple words, Thailand is not required to give tax benefits, like personal allowances, to British passport holders who are living in Thailand and receiving income from the UK.
The UK tax free Personal Allowance for the tax year 2024-2025 is set at £12,570. If the personal allowance is not made available in Thailand then the basic state pension, which would be normally below this personal allowance when paid in UK would not be subject to UK Tax, but when when paid in Thailand (if personal allowance is not given consideration) Tax could be payable on all income not taxed by HMRC, which could be the total pension amount.
Quickly looking at the Thailand Tax rates - Personal income tax (PIT)
150,001 to 300,000 = 5% (£3,300 - £6,700)
300,001 to 500,000 = 10% (£6,700 - £11,100)
Then pay 15% (PIT) rate (between £11,100 - £16,700)
A rough and dirty calculation - If all of Pension coming in from UK was say a total value of 500,000 Baht (about same as New state Pension) and if no personal tax allowance is given consideration, while including the statutory 60,000 exemptions, but not including child or spouse or health exemptions, Taxed on 440,000 Income - The Tax payable would be 21,500 (£475).
Obviously this is 'Only' if the personal allowance (Single person) is not made available for UK pension payments sent to Thailand.
This is not Tax advice since I have no idea better than the next, what the Thai Revenue will decide - This is only meant to identify what might be possible and is not meant to be anything other than a personal contribution to understand some of the potential issues for many UK pensioners living in Thailand.
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22 hours ago, Sigma6 said:
Goto the URL
opera://settings/siteData, typeyoutube.comin the quick-find field and choose "remove all shown". Do the same forgoogle.com. Then, log back into Youtube and see if things are working again. If not, I'd disable your extensions one by one to see if any are causing the problem. I'd also temporarily disable Opera's adblocker and tracking protection to see if that's the cause.How did you insert the box around
opera://settings/siteData -
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Foreigners and their overseas income: what next?
in Thailand News
Posted · Edited by spambot
Reason for edit: Spelling mistake corrected
Good Response. it would also require good management of UK account(s) since any spent funds out of an account(s) and not remitted to Thailand or addition into the account(s) would no longer be available as tax free and after many years of similar transaction contaminations could become a complex argument to sustain with RD.