I can confirm that any pension paid from the uk will be taxed. I tried through my accountant for two years to try to get tax exemption but there is no reciprocol tax agreement between the uk and thailand.
I had been assured before retiring ,by my accountant, that my occupational pension would be tax free . Unfortunately this was found to be erronous info. Further another of his clients had to pay back nearly two years tax after they received this ruling from the tax department.
Taxation on my UK Pension
I find this absolutly APPALLING tbhmachersjohn wrote:I can confirm that any pension paid from the uk will be taxed. I tried through my accountant for two years to try to get tax exemption but there is no reciprocol tax agreement between the uk and thailand.
I had been assured before retiring ,by my accountant, that my occupational pension would be tax free . Unfortunately this was found to be erronous info. Further another of his clients had to pay back nearly two years tax after they received this ruling from the tax department.
You get NO benefit from the tax system so why the HELL should you pay into it?
Pookie
The views expressed here are my own.......and bloody good they are too !!!! :)
This statement is not correct. I informed the Tax Office that I was overseas, and therefore I am now exempt from income tax on my earnings from UK Property Rental (cannot remeber the name/number of the form, but was specifically for non-resident Landlords).PJG wrote:Big Boy,
All income earned in UK regardless of whether you are non-resident for Tax purposes is Taxible. This includes pensions,salaries,rents, dividends paid into Uk Bank accounts. .......
Also, if you simply inform your bank that you are non-resident, they also pay you gross interest (without deducting tax).
I do not know about the Pension, but its interesting to follow to see if a definitive answer exists.
Winkie
Winkie wrote:This statement is not correct. I informed the Tax Office that I was overseas, and therefore I am now exempt from income tax on my earnings from UK Property Rental (cannot remeber the name/number of the form, but was specifically for non-resident Landlords).PJG wrote:Big Boy,
All income earned in UK regardless of whether you are non-resident for Tax purposes is Taxible. This includes pensions,salaries,rents, dividends paid into Uk Bank accounts. .......
Also, if you simply inform your bank that you are non-resident, they also pay you gross interest (without deducting tax).
I do not know about the Pension, but its interesting to follow to see if a definitive answer exists.
Are you sure about that?
I've been living here for 8 years and have rented my property out all the time. I'm registered as a Non-Resident Landlord living abroad (indeed my agents insisted that I apply for that status).
Nevertheless, the income from the property is still taxable. The Non-resident status, however, does allow me to offset a huge amount against tax - ie interest on my mortgage, agent's fees, any flights back home (it was to check my house, therefore a legitimate business expense, honest, guv), and maintenence costs etc etc. So much so, that I rarely have a tax bill of more than 250 pounds a year.
I had an accountant (big city firm) do it for me in the first two years and I don't think they would have made a mistake about the tax liability, initially. The law may have changed, but I'm not aware of it having done so.
Must admit, I havn't nothered since and the IR havn't caught up with me yet. But I'm sure they will and I'll be fined @100 pounds a year for each of them that I havn't filed a tax return, plus interest on any liability calculated.
Also, interest (whatever meagre amount it is) earned at my bank is also taxable. Indeed, a certificate is needed each year from the bank showing that tax has been deducted by them.
The other advantage of the Non-resident status is that you're allowed back into the UK for 90 days in any tax year. Theoretically, if you've been there for 91, you lose that status and all the tax benefits that go with it.
I'm not saying your wrong. Indeed, I hope you're right. Can you elaborate, as I'm off back home for a month in a couple of days and it would put my mind at rest if the taxman isn't going to come looking for me in the future.
Winkie
Hi Lomu. I've just had a look at http://www.hmrc.gov.uk/cnr/nr_landlords.htm#2.
It seems that generally speaking you are correct. However, have a look in detail at the section 'Conditions for applying to the Centre for Non-Residents for approval to receive rental income with no tax deducted'
For me I've stopped renting and am now allowing a family member to stay there for a smaller 'voluntary' donation to running costs and upkeep.
It'd be inteesting to knowe if I've done anything wrong! When I left the UK this time, just 2 1/2 years ago, I quickly arranged for an agent to rent my house out, they got me to sign an NRL document and informed me that I'd pay no tax, and they sent me statements each month and it showed that I paid no tax. Howver, my wife (not British, but a joint owner of the house) had to pay income tax on 50% of the rental price, my 50% no tax was paid.
Perhaps this was becasue my 50% was below the income bracket.
Anyway, I was convinced all was above board when I left, and now I don't care!
With regard to the bank, I did this when I first lived in Thailand in 92, but then went back to UK in 2000. Maybe the law has changed, This time when I left, I didn't bother to register as being non-resident so I'm not sure my info is up to date - perhaps best to ask your bank.
Don't know if that helps
Winkie
It seems that generally speaking you are correct. However, have a look in detail at the section 'Conditions for applying to the Centre for Non-Residents for approval to receive rental income with no tax deducted'
For me I've stopped renting and am now allowing a family member to stay there for a smaller 'voluntary' donation to running costs and upkeep.
It'd be inteesting to knowe if I've done anything wrong! When I left the UK this time, just 2 1/2 years ago, I quickly arranged for an agent to rent my house out, they got me to sign an NRL document and informed me that I'd pay no tax, and they sent me statements each month and it showed that I paid no tax. Howver, my wife (not British, but a joint owner of the house) had to pay income tax on 50% of the rental price, my 50% no tax was paid.
Perhaps this was becasue my 50% was below the income bracket.
Anyway, I was convinced all was above board when I left, and now I don't care!
With regard to the bank, I did this when I first lived in Thailand in 92, but then went back to UK in 2000. Maybe the law has changed, This time when I left, I didn't bother to register as being non-resident so I'm not sure my info is up to date - perhaps best to ask your bank.
Don't know if that helps
Winkie
Sorry Winkie, have to disagree. If you do not complete the form you mention (NRL1), then your agent has to deduct income tax before paying to you. Once your application is approved, they pay you gross but you are legally obliged to declare this income in your tax return. You can offset against normal personal allowances, normal expenses and if rented furnished, 10% of the gross rental by way of 'wear and tear'. If you only have one house, doubtful if you will have a big tax liability, if any. You are quite correct about the bank interest.Winkie wrote:This statement is not correct. I informed the Tax Office that I was overseas, and therefore I am now exempt from income tax on my earnings from UK Property Rental (cannot remeber the name/number of the form, but was specifically for non-resident Landlords).PJG wrote:Big Boy,
All income earned in UK regardless of whether you are non-resident for Tax purposes is Taxible. This includes pensions,salaries,rents, dividends paid into Uk Bank accounts. .......
Also, if you simply inform your bank that you are non-resident, they also pay you gross interest (without deducting tax).
I do not know about the Pension, but its interesting to follow to see if a definitive answer exists.
Winkie
PJG statement above is 10% correct.
Pensions are taxable also. This is the UK we are talking about!!
Ken
Maybe that's the case then. I surely didn't pay any tax whilst I was renting through this agent.
I paid 0 tax for 50% of the income (after agents fees etc...) and my wife paid tax on her half (this was explained because she was not a UK National, but was a joint owner fothe property).
The agent was lousy and screwed up many other things so probably misinformed me on this. I've certainly had no time to look into it, and also don't really care now. I'ts in the past.
Thanks for correcting me
Winkie
Maybe that's the case then. I surely didn't pay any tax whilst I was renting through this agent.
I paid 0 tax for 50% of the income (after agents fees etc...) and my wife paid tax on her half (this was explained because she was not a UK National, but was a joint owner fothe property).
The agent was lousy and screwed up many other things so probably misinformed me on this. I've certainly had no time to look into it, and also don't really care now. I'ts in the past.
Thanks for correcting me
Winkie
It should be pointed out the UK has a tax agreement policy with Thailand to avoid paying tax twice.
Advice from inland revenue:
If you are not resident in the UK, we will generally tax you on any UK pensions or on earnings from employment the duties of which are carried on in this country. Where your duties are carried on partly in the UK and partly abroad, an allocation, based on days worked in the UK and days worked abroad, will normally be made to ascertain the earnings for duties carried on in this country which are liable for UK tax. We will not tax you on earnings from an employment which is carried on wholly abroad (see paragraph 5.5). See paragraph 5.4 for the position if you become resident in the UK part way through a tax year and 5.9 regarding overseas earnings taxable on the remittance basis. In some cases you may make a claim under a double taxation agreement for exemption from UK tax on your UK pension, or on earnings arising in this country (see Chapter 9 and in particular paragraphs 9.3, 9.4 and 9.6).
9 Double taxation relief
9.1 If you have income or gains from a source in one country and are resident in another, you may be liable to pay tax in both countries under their tax laws. To avoid 'double taxation' in this situation, the UK has negotiated double taxation agreements with a large number of countries. A list of these is given at paragraph 9.16.
Non-residents, and residents of more than one country
9.2 If you are a resident of a country with which the UK has a double taxation agreement, you may be able to claim exemption or partial relief from UK tax on certain types of income from UK sources. You may also be able to claim exemption from capital gains tax on the disposal of assets. The precise conditions of exemption or relief can be found in the relevant agreement. It is not possible to give full details here as they vary from agreement to agreement. If you are resident both in the UK and a country with which the UK has a double taxation agreement, there may be special provisions in the agreement for treating you as a resident of only one of the countries for the purposes of the agreement.
9.3 Normally, you will receive some relief from UK tax on the following sources of income under an agreement
* pensions and some annuities (other than UK Government pensions)
* royalties
* dividends (paid before 6 April 1999)
* interest
Some agreements state that you must be subject to tax in the other country on the income in question before you get relief from UK tax.
9.4 If you receive a pension paid by the UK for service to the UK Government or to a local authority in the UK, you will usually be taxed only by the UK.
9.5 If you are carrying on a trade or running a business through a permanent establishment in the UK, you may not qualify for any relief from UK tax on royalties, interest or dividends connected with the permanent establishment. A Ôpermanent establishment' includes, for example, a place of management, a branch or an office.
Earnings from employment and professional services
9.6 Under many double taxation agreements you may be able to claim exemption from UK tax on
* earnings from an employment, and
* profits or earnings for independent, personal or professional services
carried on in the UK, if you are a resident of the overseas country for the purposes of the agreement (see paragraph 9.2). The usual conditions to be met are
* in the case of employments
- you must not be in the UK for more than 183 days in the period (often, twelve months) specified in the agreement, and
- your remuneration must be paid by (or on behalf of) an employer who is not resident in the UK, and it must not be borne by a UK branch of your employer
* in the case of independent, personal or professional services, you must not operate from a fixed base in the UK (or, in the case of some agreements, spend more than a specified number of days in the UK).
Advice from inland revenue:
If you are not resident in the UK, we will generally tax you on any UK pensions or on earnings from employment the duties of which are carried on in this country. Where your duties are carried on partly in the UK and partly abroad, an allocation, based on days worked in the UK and days worked abroad, will normally be made to ascertain the earnings for duties carried on in this country which are liable for UK tax. We will not tax you on earnings from an employment which is carried on wholly abroad (see paragraph 5.5). See paragraph 5.4 for the position if you become resident in the UK part way through a tax year and 5.9 regarding overseas earnings taxable on the remittance basis. In some cases you may make a claim under a double taxation agreement for exemption from UK tax on your UK pension, or on earnings arising in this country (see Chapter 9 and in particular paragraphs 9.3, 9.4 and 9.6).
9 Double taxation relief
9.1 If you have income or gains from a source in one country and are resident in another, you may be liable to pay tax in both countries under their tax laws. To avoid 'double taxation' in this situation, the UK has negotiated double taxation agreements with a large number of countries. A list of these is given at paragraph 9.16.
Non-residents, and residents of more than one country
9.2 If you are a resident of a country with which the UK has a double taxation agreement, you may be able to claim exemption or partial relief from UK tax on certain types of income from UK sources. You may also be able to claim exemption from capital gains tax on the disposal of assets. The precise conditions of exemption or relief can be found in the relevant agreement. It is not possible to give full details here as they vary from agreement to agreement. If you are resident both in the UK and a country with which the UK has a double taxation agreement, there may be special provisions in the agreement for treating you as a resident of only one of the countries for the purposes of the agreement.
9.3 Normally, you will receive some relief from UK tax on the following sources of income under an agreement
* pensions and some annuities (other than UK Government pensions)
* royalties
* dividends (paid before 6 April 1999)
* interest
Some agreements state that you must be subject to tax in the other country on the income in question before you get relief from UK tax.
9.4 If you receive a pension paid by the UK for service to the UK Government or to a local authority in the UK, you will usually be taxed only by the UK.
9.5 If you are carrying on a trade or running a business through a permanent establishment in the UK, you may not qualify for any relief from UK tax on royalties, interest or dividends connected with the permanent establishment. A Ôpermanent establishment' includes, for example, a place of management, a branch or an office.
Earnings from employment and professional services
9.6 Under many double taxation agreements you may be able to claim exemption from UK tax on
* earnings from an employment, and
* profits or earnings for independent, personal or professional services
carried on in the UK, if you are a resident of the overseas country for the purposes of the agreement (see paragraph 9.2). The usual conditions to be met are
* in the case of employments
- you must not be in the UK for more than 183 days in the period (often, twelve months) specified in the agreement, and
- your remuneration must be paid by (or on behalf of) an employer who is not resident in the UK, and it must not be borne by a UK branch of your employer
* in the case of independent, personal or professional services, you must not operate from a fixed base in the UK (or, in the case of some agreements, spend more than a specified number of days in the UK).
[quote="lomuamart"][.
Must admit, I havn't nothered since and the IR havn't caught up with me yet. But I'm sure they will and I'll be fined @100 pounds a year for each of them that I havn't filed a tax return, plus interest on any liability calculated.
Lomu,cannot believe that you have returned to Uk and not had a brief chat with an accountant over your tax liability just to set your mind at rest.You have not really grasped this fine system of 100 pounds. To explain as best I can in plain simple language for the tax year just closed on April 5th 2006.If you have not filled out a tax return on income earned in UK as it is very possible that you fall into the category that should have done,you will pick up a £100 fine on Jan 31st 2007 followed by another £100 fine on July 31st, 2007.You will not be contacted as you are now out of the tax loop as you or your agent has not submitted an NRLY by July 5th 2006.This is the only way the revenue could keep track of you,its a simple form where your gross earnings for yearly rental and tax deducted by agent are declared.Next tax year 2006 to 2007 you will be fined £100 on Jan 2008 and another £100 on July 31st 2008 for failing to submit a tax return for that fiscal year but you will also be fined another £100 on the respective days for failing to submit the return that should have been submitted on for previous year plus 7.5% interest as well.
You have opted out of the loop and the revenue will not contact you but the fines and interest will continue to accumulate.The reason I have entered this post is really to do with an article in sunday times money section, wwwtimesonline.co.uk/money which states that it is expected that the chancellor will unveil new measures to combat tax avoidance in his prebudget speech in early december.These include raising £100 fine to £250
Will they catch you.if you stay abroad unlikely even if you sell your house and move the money offshore, but one day you may enter the system again.Perhaps you are still paying NI contributions and plan to claim a meagre pension at 65.Who knows but dont bank on the 6 year rule if you do as it seems to be used only when it suits the revenue.Need to tread very carefully with IR.It can turn out to be a monster with 7 heads.
Must admit, I havn't nothered since and the IR havn't caught up with me yet. But I'm sure they will and I'll be fined @100 pounds a year for each of them that I havn't filed a tax return, plus interest on any liability calculated.
Lomu,cannot believe that you have returned to Uk and not had a brief chat with an accountant over your tax liability just to set your mind at rest.You have not really grasped this fine system of 100 pounds. To explain as best I can in plain simple language for the tax year just closed on April 5th 2006.If you have not filled out a tax return on income earned in UK as it is very possible that you fall into the category that should have done,you will pick up a £100 fine on Jan 31st 2007 followed by another £100 fine on July 31st, 2007.You will not be contacted as you are now out of the tax loop as you or your agent has not submitted an NRLY by July 5th 2006.This is the only way the revenue could keep track of you,its a simple form where your gross earnings for yearly rental and tax deducted by agent are declared.Next tax year 2006 to 2007 you will be fined £100 on Jan 2008 and another £100 on July 31st 2008 for failing to submit a tax return for that fiscal year but you will also be fined another £100 on the respective days for failing to submit the return that should have been submitted on for previous year plus 7.5% interest as well.
You have opted out of the loop and the revenue will not contact you but the fines and interest will continue to accumulate.The reason I have entered this post is really to do with an article in sunday times money section, wwwtimesonline.co.uk/money which states that it is expected that the chancellor will unveil new measures to combat tax avoidance in his prebudget speech in early december.These include raising £100 fine to £250
Will they catch you.if you stay abroad unlikely even if you sell your house and move the money offshore, but one day you may enter the system again.Perhaps you are still paying NI contributions and plan to claim a meagre pension at 65.Who knows but dont bank on the 6 year rule if you do as it seems to be used only when it suits the revenue.Need to tread very carefully with IR.It can turn out to be a monster with 7 heads.
Sorry if i've not read all the replies but, I'll give you my 2 baht's worth.
I'm allowed to earn up to 360 pounds per month in the Uk without paying tax. After my charges to the rental company I fall below this bracket and as such I receive all my monies free of tax. I could fill in the IR form from the bank which I receive interest in the UK but this would take me above the threshold.
On another note. If you are from the UK, over 65 and receiving a goverment pension, you are eligible for up to 60% of the payment for your Thai spouse as she is a dependant.
I also have a friend who is registered in a country that has a reciprocal tax agreement with the UK, he has his occupational pension paid into a bank in that country and pays his ( lower) taxes to that country.
Onlyme.
PS. Hope this causes some confusion
I'm allowed to earn up to 360 pounds per month in the Uk without paying tax. After my charges to the rental company I fall below this bracket and as such I receive all my monies free of tax. I could fill in the IR form from the bank which I receive interest in the UK but this would take me above the threshold.
On another note. If you are from the UK, over 65 and receiving a goverment pension, you are eligible for up to 60% of the payment for your Thai spouse as she is a dependant.
I also have a friend who is registered in a country that has a reciprocal tax agreement with the UK, he has his occupational pension paid into a bank in that country and pays his ( lower) taxes to that country.
Onlyme.
PS. Hope this causes some confusion
¼Ã
I've gone back and read the posts.
Hope this is helpfull, especially if you're from the UK.
So, basically what you need to do is....Move to a country with aforesaid agreement, buy some property and register yourself, get a PO box in that country, sell up and find a friend who will hand in your tax forms etc....Sounds complicated but, well worth the effort as you will get increases on your government pension when it kicks in!
Onlyme.
Hope this is helpfull, especially if you're from the UK.
As for the above quote. I pointed out on the previous post that if you were to live in a country with a reciprocal tax agreement with the UK, you would receive the monies tax free and have to pay the taxes at the country where you are residing ( reciprocal country.) Sadly, Thailand nor Australia is one of them. You'd be amazed at the countries with the reciprocal tax agreement! Do a google search.I (respectfully) do not think the above statement is true. I believe your pension is not liable to tax if you declare you are not resident in the UK, however I may be wrong! I've been writing to the tax office for two years now to clarify this and all I've ever received back from them is template letters saying my case has been referred to a different office for further analysis! Two years I kid you not!
So, basically what you need to do is....Move to a country with aforesaid agreement, buy some property and register yourself, get a PO box in that country, sell up and find a friend who will hand in your tax forms etc....Sounds complicated but, well worth the effort as you will get increases on your government pension when it kicks in!
Onlyme.
¼Ã
Just before you all rush to get to a recriprocal country 
There's always big brother in the sidelines waiting to catch you out.
Maybe you can get away with it for a few years but, the b******s will eventually catch you up.
Hold your hand up if you are in receipt of cold weather payments whilst residing in Thailand!
There's always big brother in the sidelines waiting to catch you out.
Maybe you can get away with it for a few years but, the b******s will eventually catch you up.
Hold your hand up if you are in receipt of cold weather payments whilst residing in Thailand!
¼Ã