Tax residency in Thailand and taxing overseas income

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dundrillin
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Tax residency in Thailand and taxing overseas income

Post by dundrillin »

I am intending to rent out my property in the U.K. And move to Thailand on a permanent basis. What are the implications of a tax residency here in Thailand. My only income is U.K. Pensions and share dividends. Any advice would be greatly appreciated.
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Re: Tax residency in Thailand

Post by Dannie Boy »

dundrillin wrote:I am intending to rent out my property in the U.K. And move to Thailand on a permanent basis. What are the implications of a tax residency here in Thailand. My only income is U.K. Pensions and share dividends. Any advice would be greatly appreciated.
Although I can’t claim to be an expert on tax, my understanding is that you would only be liable to Thai taxation on income earned here. As I’m sure you know, income from UK rental is subject to UK tax along with your pension, although you are allowed your personal allowance to offset the first (approx £11k).


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PeteC
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Re: Tax residency in Thailand

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Yes, my understanding is earned here or remitted here. Remitted meaning you're living here legally and payment for a commercial service you performed anywhere in the world is remitted directly into your Thai bank account, or remitted to you here in draft form and you deposit it into your Thai bank account. So, if you're renting out your UK property have them remit the rent to your UK bank account then you move it elsewhere. What I've just said dates back several years but I don't think it has changed, at least I haven't read that it has changed. Pete :cheers:
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Re: Tax residency in Thailand

Post by StevePIraq »

There is another thread on this, can't remember the name, anyway I went to the Hua Hin Revenue Office on Soi 88 and enquired directly, I was told I only pay tax on income I earn in Thailand, any income overseas is not considered.
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Re: Tax residency in Thailand

Post by PET »

You will also not be eligible for capital Gains tax once you have declared the residency in Thailand. I am not sure how long this takes but I seem to remember it was quite quick.
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Re: Tax residency in Thailand

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PET wrote: Fri Jul 06, 2018 7:55 pm You will also not be eligible for capital Gains tax once you have declared the residency in Thailand. I am not sure how long this takes but I seem to remember it was quite quick.
Are you sure about that? It seems an untypically generous concession.
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Re: Tax residency in Thailand

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dundrillin wrote: Fri Jul 06, 2018 11:49 pm
PET wrote: Fri Jul 06, 2018 7:55 pm You will also not be eligible for capital Gains tax once you have declared the residency in Thailand. I am not sure how long this takes but I seem to remember it was quite quick.
Are you sure about that? It seems an untypically generous concession.
Some of the rules covering CGT changed in 2015 - this may not cover every issue but it makes reference to a lot of scenarios
https://www.expertsforexpats.com/expat- ... sh-expats/
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Re: Tax residency in Thailand

Post by lomuamart »

I remember that law coming into effect and contacted my agents in London who told me that lots of their overseas clients were having their properties valued to hopefully lessen the chance of there being any disagreement with HMRC over the 2015 value if and when the time came to sell.
It's what I did but haven't tried to negotiate with the Revenue yet.
The OP was asking about rental income which as others have said is taxable in the UK as income earned from the country. Personal allowance is 11,800 GBP now, I believe.
Another useful exercise if renting is to get yourself registered as a Non Resident Landlord Living Abroad. I did it years ago and it was an easy process. Once registered, there's a host of deductables you can set off against any tax liability such as agent's fees, maintenance and 10% wear and tear. It's worth looking into.
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Re: Tax residency in Thailand

Post by dundrillin »

Dannie Boy wrote: Sat Jul 07, 2018 8:45 am
dundrillin wrote: Fri Jul 06, 2018 11:49 pm
PET wrote: Fri Jul 06, 2018 7:55 pm You will also not be eligible for capital Gains tax once you have declared the residency in Thailand. I am not sure how long this takes but I seem to remember it was quite quick.
Are you sure about that? It seems an untypically generous concession.
Some of the rules covering CGT changed in 2015 - this may not cover every issue but it makes reference to a lot of scenarios
https://www.expertsforexpats.com/expat- ... sh-expats/
:cheers:
Thanks for that link. It was very interesting indeed.
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Re: Tax residency in Thailand

Post by dundrillin »

lomuamart wrote: Sat Jul 07, 2018 9:00 am I remember that law coming into effect and contacted my agents in London who told me that lots of their overseas clients were having their properties valued to hopefully lessen the chance of there being any disagreement with HMRC over the 2015 value if and when the time came to sell.
It's what I did but haven't tried to negotiate with the Revenue yet.
The OP was asking about rental income which as others have said is taxable in the UK as income earned from the country. Personal allowance is 11,800 GBP now, I believe.
Another useful exercise if renting is to get yourself registered as a Non Resident Landlord Living Abroad. I did it years ago and it was an easy process. Once registered, there's a host of deductables you can set off against any tax liability such as agent's fees, maintenance and 10% wear and tear. It's worth looking into.
Most of these deductibles are available for UK residents. However the 10% wear and tear allowance is no longer available.

My understanding is irrespective of your tax residence all your income and capital gains will be taxed the same as if you were a U.K. Resident ie interest in offshore banks etc. Only by becoming a non domicile will you escape the clutches of the UK tax man. This is actually difficult to achieve.

As regards capital gains on your Thai house would this not exempt as it is your primary residence?
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Re: Tax residency in Thailand

Post by moater »

There's also a hard to enforce stipulation on dividends. They must not be remitted to Thailand in the calendar year they were received. Otherwise they are subject to taxation. I've never heard of this enforced, but I know some extra careful people who keep dividends in a separate account until they have so-called ripened.
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Re: Tax residency in Thailand

Post by dundrillin »

moater wrote: Sat Jul 07, 2018 3:14 pm There's also a hard to enforce stipulation on dividends. They must not be remitted to Thailand in the calendar year they were received. Otherwise they are subject to taxation. I've never heard of this enforced, but I know some extra careful people who keep dividends in a separate account until they have so-called ripened.
Thanks for that, I did not realise that.

I usually re-invest the dividends. However once you become non resident you can't reinvest any dividends you have in an ISA. Or make further contributions to it.
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Re: Tax residency in Thailand

Post by hhinner »

One for all you rich folks, bringing tons of money in every month, to keep an eye on.

Thai government to tax all income from abroad for tax residents starting 2024
Thailand’s revenue departments has released new guidelines which will see all income from abroad taxed as personal income tax regardless of whether it was earned income or savings.

A senior official at the Ministry of Finance confirmed a document released by the revenue department over the weekend was accurate.

According to the document, “…those that have earnings from occupation or business abroad or wealth that is located abroad…and has brought these assets into Thailand…must factor this into their personal income tax for the year.”

The program will begin January 1, 2024 and apply only to tax residents in Thailand meaning tourists and short term workers will be exempt.

It is unclear at this point how this will apply to foreigners living in Thailand on a retirement visa.

https://www.thaienquirer.com/50744/thai ... ting-2024/
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Re: Tax residency in Thailand

Post by Dannie Boy »

Although technically, I’m sure that most of us living here on long term retirement visas are classified as being tax residents, I don’t know of anyone who isn’t working here who has been asked to register as a tax resident. If they intend to tax those sending money here on a monthly basis (that presumably has already been taxed at source), it will create an almighty problem!!
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Re: Tax residency in Thailand

Post by Benroon »

This is a very complex issue - if you ask a dozen tax accountants who specialise in this stuff you will get a dozen different answers. I know that because I've tried. You are also going to get dozens of posts with completely different answers so mine is based on personal experience of looking into this.

From HMRC - Essentially if you have declared yourself a non resident in the UK with HMRC (and even if you haven't you're a non resident by default if you spend more than 181 days outside the UK) then you are not liable for tax in the UK but you ARE in Thailand under the dual tax agreement treaty which the UK has with many countries incl Thailand. Obviously if it has been taxed already in the UK thats the end of it. (Having said that there are countries where you have to pay it twice but i don't think Thailand is one of them). But if it's coming from savings, or investments or private pensions (SIPPS) for example then the onus is, according to the law, on you to pay tax on it in Thailand. That came from HMRC so I'm summising must be accurate. Having said that I am not aware of anyone who pays it. Indeed when I enquired at my local thai tax office the impression I got is their isn't even a mechanism to collect it.

But yes it would be a seismic event to thousands if this actually happens, but I believe this has actually been in place for decades, but just never acted upon.

But would be interesting to know just how the collection of these taxes would work? Perhaps immigration would ask for a bank balance along with your 90 day report or something along those lines but I think could be easily swerved by paying into someone elses account or bring wads of cash over? Interesting and potentially disastrous times ahead if there is any substance in this.
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