I have lived in Thailand for 12 years and am now 74. I have only been back to the UK once in that time so I consider myself non-resident in the UK. I have been paying UK tax on a private pension since the age of 66 though I have not set foot in the UK in that time. Surely that makes me a non-resident, so why am I paying tax?
You are non-UK tax resident, and Thailand tax resident. This means you would only have a liability in the UK on certain UK sources of income, such as a government pension (e.g. a teacher’s pension, and not the state pension), rental income, and investment income in certain scenarios.
It is possible you have not told the private pension company of your change in residence status, and they have not been advised by the UK taxman, HMRC.
According to Jason Porter, director of expat financial advisers Blevins Franks, you should advise both immediately. “You might need to prove it with some documentary proof of your status, perhaps a Thai tax return, or other evidence,” says Porter. “I suspect they have been deducting 20% tax, and you are still able to recover this. You are also able to change the treatment in the future to a zero tax code on the payments.
“If the reason you overpaid tax was your fault – i.e. if you did not let HMRC know you were non-resident it is your fault, but if you told them and can prove it, it is likely to be their fault – then the deadline for claiming is four years after the end of the tax year you’re claiming for. However, if HMRC made a mistake, you might be able to claim further back than this.
“You will need to submit UK tax returns for the previous years, showing you are non-UK tax resident, and a tax resident of Thailand. This will include the gross UK pension in the year and the tax paid, plus any other UK sources of income. As the tax treaty gives Thailand the taxing rights on the pension, the UK tax paid can be recovered. You will need to declare the private pension on your Thai tax return.”
As the tax treaty gives Thailand the taxing rights on the pension, the UK tax paid can be recovered. You will need to declare the private pension
private pension
A private pension is a plan into which individuals contribute from their earnings, which then will pay them a private pension after retirement. It is an alternative to the state pension. Usually, individuals invest funds into saving schemes or mutual funds, run by insurance companies.
If you retire abroad but are still considered a UK resident for tax purposes, you may have to pay UK tax on your pension. If you are no longer a UK resident, you don't usually have to pay UK tax on your pension, although you may have to pay tax in the country you live in.
If you are not resident in the UK, the overseas pension will not be taxable in the UK. This is because non-residents are only taxable in the UK on income sourced from the UK. If you are resident but not domiciled (or deemed domiciled) in the UK, you should consider whether or not the remittance basis applies.
The double taxation convention entered into force on 20 November 1981. It is effective in Thailand from 1 January 1981 and in the UK from: 1 January 1981 for Petroleum Tax. 1 April 1981 for Corporation Tax and development tax.
Income received from foreign pensions or annuities may be fully or partly taxable, even if you do not receive a Form 1099 or other similar document reporting the amount of the income.
Only income earned inside Thailand shall be subjected to tax during retirement. Therefore, you will not be obliged to pay any taxes for any income you have earned from overseas. Also, personal income taxes are not required for retirees in Thailand. Note that you can't work in Thailand while on a retirement visa.
The Thai retirement visa for British citizens is issued to retirees or applicants who wish to visit and retire in the Kingdom of Thailand. Please note that you must first obtain a 90-day visa from the Thai Embassy in London or country of residence prior to your application for the Thai Retirement visa in Thailand.
Earn less than £10,000 from an overseas job. Earn less than £100 from other (non-employment) income. All of your foreign income is subject to foreign tax. Your combined foreign and UK income is within the band for basic rate Income Tax.
Normally, people who are not U.S. citizens may receive U.S. Social Security benefits while outside the U.S. only if they meet certain requirements. Under the agreement, however, you may receive benefits as long as you reside in the United Kingdom regardless of your nationality.
You can take up to 25% from your pension free of tax. This is limited to a maximum of 25% of the standard lifetime allowance. This allowance is currently £1,073,100. You may have to pay a tax charge on money you put into your pension after you withdraw cash.
Just like in the US, you will also pay social security taxes in Thailand if you earn income in the country – whether you're a resident or a non-resident.
Does Thailand Income Tax Apply to Foreign Income? Yes, Thailand's income tax does apply to foreign income. However, the rules differ for residents and non-residents. Residents of Thailand are subject to tax on their worldwide income, regardless of where it is earned.
The DTA provides relief from double taxation where income is subject to tax in both Contracting States. In the case of Thailand, Singapore tax payable in respect of income derived from Singapore shall be allowed as a credit against the Thailand tax payable in respect of income derived from Singapore.
How retiring abroad affects your 401(k) or IRA taxes. Distributions from your 401(k) and pensions are still taxed as income, albeit they're treated as unearned income—meaning you won't be able to claim them under the Foreign Earned Income Exclusion.
If you are planning to retire or live abroad, you may be concerned about whether you'll still be able to collect your Social Security retirement, disability, or survivor benefits. In most cases, the answer is yes.
If your pension is from a government job or a job worked in a foreign country, and you have not paid Social Security taxes for at least 30 years of Substantial Earnings, your benefit may be reduced. We refer to this reduction as the Windfall Elimination Provision, or WEP.
Only income earned inside Thailand is subject to tax during retirement. If you have personal income from pension, interest or other income-producing means from your country of origin it would not be subject to income tax in Thailand.
As the end of the year approaches, expats working in Thailand may wish to consider sheltering some of their income from Thai tax by contributing to Thailand's Retirement Mutual Funds (RMFs) or the new Super Saver Funds (SSFs).
Can I Collect Social Security if I Live Outside the U.S.? If you are a U.S. citizen and qualify for Social Security retirement, family, survivor or disability benefits, you can receive your payments while living in most other countries.
British passport holders arriving by air or land can enter Thailand for 30 days without a visa (a 'visa exemption'). If you wish to stay in Thailand for more than 30 days, or wish to work in Thailand, you need a valid visa, which you must obtain before you travel.
If you are planning to move to Thailand and work, you may need a visa. Read the Thai government's guidance on working in Thailand as a foreign national and how to get a visa. Be aware of job offers that appear overly extravagant or 'too good to be true'.
Most British Commonwealth countries are included in the frozen list; these include countries, such as Australia, Canada, South Africa, New Zealand, Thailand and India, as well as British overseas territories such as the Falkland Islands.
You can live abroad and still be a UK resident for tax, for example if you visit the UK for more than 183 days in a tax year. Pay tax on your income and profits from selling assets (such as shares) in the normal way. You usually have to pay tax on your income from outside the UK as well.
Use the 'foreign' section of the tax return to record your overseas income or gains. Include income that's already been taxed abroad to get Foreign Tax Credit Relief, if you're eligible. HM Revenue and Customs ( HMRC ) has guidance on how to report your foreign income or gains in your tax return in 'Foreign notes'.
US Social Security pensions are subject to UK tax. You will qualify for this pension if you meet both of these conditions. The period of US and UK social security contributions is for a period of 10 years or more.
In short, senior citizens are largely subject to the same tax requirements as other adults. There is no age at which you no longer have to submit a tax return and most senior citizens do need to file taxes every year. However if Social Security is your only form of income then it is not taxable.
You'll have to report your U.K. pension on your U.S. tax return, but it can get complicated because of the tax treaty benefits. Not only will you have to include distributions on your 1040, but you may also have to file Form 8833 along with other financial reports like FBAR and FATCA.
This can be exempt if certain conditions are satisfied under the promotion law or Revenue Code. Interest paid to non-resident companies is subject to a 15 percent withholding tax whereas it is only one percent for residents.
You are considered a Thai tax resident by the tax authorities in Thailand if you are present in the country for a total of at least 180 days in a given tax year. Your assessable income is Thai-sourced income, as in income derived from sources in Thailand.
0 – 150,000 Exempt 150,000 – 300,000 5% 300,000 – 500,000 10% 500,000 – 750,000 15% 750,000 – 1,000,000 20% 1,000,000 – 2,000,000 25% 2,000,000 – 4,000,000 30% Over 4,000,000 35% An individual is considered tax resident if he/she is in Thailand for 180 days or more in a calendar year.
There is a personal allowance of THB 60,000 each for the taxpayer and the taxpayer's spouse (provided that the taxpayer's spouse does not file one's own return). There is also an allowance of THB 30,000 for each child and an additional THB 30,000 for the second child onwards born in or after 2018.
Thailand, one of Washington's oldest treaty allies in Asia, is an outlier. When President Joe Biden entered the White House in January 2021, one of his most important foreign policy initiatives was a pledge to reinvigorate and modernise America's global alliances.
The principal bilateral arrangement is the 1966 Treaty of Amity and Economic Relations, which facilitates U.S. and Thai companies' economic access to one another's markets.
Like most countries on the list, Thailand also maintains a territorial tax system. There is no wealth tax, but there may be conditions when you may end up paying capital gains tax.
If you're retiring abroad, there's a good chance you'll be subject to taxation by the United States and your new home country. Double taxation can be avoided by taking advantage of tax treaties, Foreign Earned Income Exclusion and Foreign Tax Credits.
As long as you've paid enough National Insurance, you can claim your State Pension while living abroad. The main difference is that if the State Pension increases, you may not benefit from the extra amount if you're living in certain countries.
Only income earned inside Thailand shall be subjected to tax during retirement. Therefore, you will not be obliged to pay any taxes for any income you have earned from overseas. Also, personal income taxes are not required for retirees in Thailand. Note that you can't work in Thailand while on a retirement visa.
If you leave the U.S., we will stop your benefits the month after the sixth calendar month in a row that you are outside the country. You can make visits to the United States for specific periods of time, depending on how long you've been outside, to continue receiving your benefits.
To acquire the full amount, you need to maximize your working life and begin collecting your check until age 70. Another way to maximize your check is by asking for a raise every two or three years. Moving companies throughout your career is another way to prove your worth, and generate more money.
Income received from foreign pensions or annuities may be fully or partly taxable, even if you do not receive a Form 1099 or other similar document reporting the amount of the income.
If you move to one of the following countries, your Social security benefits will not be taxed by the US -- Canada, Germany, Egypt, Ireland, Israel, Italy (only if you are an Italian citizen), Romania, UK.
If you qualify for Social Security benefits from both the United States and the United Kingdom and did not need the agreement to qualify for either benefit, the amount of your U.S. benefit may be reduced.
Non-residents also pay income tax on any money they earn during their time in Thailand. Again, if you leave the country before the end of the tax year, you must file taxes on any income you generated during your visit. However, non-residents are exempt from paying taxes on foreign income.
Just like in the US, you will also pay social security taxes in Thailand if you earn income in the country – whether you're a resident or a non-resident.
To retire in Thailand comfortably with Western standards of living, we recommend budgeting THB50,000–100,000 per month. That's not to say it's impossible to live comfortably on much less.
Anyone wishing to retire in Thailand must obtain a retirement visa. It's pretty easy to get a retirement visa once you're aged 50 or older if you have either a Thai bank account with a minimum of THB ฿800,000 (around USD $24,000) or a monthly income of THB ฿65,000 (around USD $2,000) and up.
Foreigners who are legally working in Thailand must also register with the Social Security Office and are entitled to the same benefits as Thai employees.
If you move abroad, you don't have to transfer your UK pension pot. You can choose to leave it in the UK and then take an income from it in the UK: Currency risk and exchange commission can be managed by setting up a foreign exchange account and transferring money into your local currency, as needed.
You can leave (called 'opting out') if you want to. If you opt out within a month of your employer adding you to the scheme, you'll get back any money you've already paid in. You may not be able to get your payments refunded if you opt out later - they'll usually stay in your pension until you retire.
Introduction: My name is Jeremiah Abshire, I am a outstanding, kind, clever, hilarious, curious, hilarious, outstanding person who loves writing and wants to share my knowledge and understanding with you.
We notice you're using an ad blocker
Without advertising income, we can't keep making this site awesome for you.
