QROPS Thailand. Pension Tax Relief for British Expats in Thailand
British expats living in Thailand or wishing to retire in Thailand can now transfer their pension into a QROPS Thailand to maximize pension tax relief. British expats living or working in Thailand can take advantage of their offshore status and transfer their UK pension offshore to somewhere secure like Gibraltar or New Zealand and will no longer have to pay UK taxes on their pension as long as they stay offshore.
Even Thais working in the UK or who have worked in thew UK in the past can transfer their pension offshore to avoid 55% tax upon death whilst drawing income that the UK imposes as well as avoiding UK income taxes.
Why live or retire in Thailand as a British expat?
More than 51,000 Brits live and work in Thailand with over 1,100 pensioners. Brits come to live in Thailand to enjoy ‘The Land of Smiles’. Warm weather, sandy beaches, clear waters, world-renowned Thai food, friendly locals and cheaper prices are just some of the reasons Brits come to Thailand to retire. Thailand is a relatively easy place for Brits to retire to as most the facilities, food and infrastructure that is set up in the West is available in Thailand.
Thailand is the world’s 50th largest country in terms of total area (slightly smaller than Yemen and slightly larger than Spain), with a surface area of approximately 513,000 km squared and the 21st most-populous country, with approximately 64 million people. The largest city is Bangkok, the capital, which is also the country’s centre of political, commercial, industrial and cultural activities. About 75% of the population is ethnically Thai, 14% is of Chinese origin, and 3% is ethnically Malay; the rest belong to minority groups including Mons, Khmers and various hill tribes, as well as a large number of expats. The country’s official language is Thai. The primary religion is Buddhism, which is practiced by around 95% of all Thais.
Despite the riots and political unrest in 2010, Thailand was one of the world’s fastest growing stock markets in 2010. It grew nearly 63% Nov ’09 – Nov’10. The new government in Thailand has pledged to increase the price of rice for farmers and to raise minimum wages from 200 to 300 baht per day.
For British expats living in Thailand, you can take advantage of your offshore address to reduce UK tax on your pension as well as protect your wife and children from high taxation should anything happen to you. One of the benefits of a QROPS Thailand is the availability to hold multiple currencies, so you could hold a portion of your pension in Pounds, Dollars, Euros or Rand or hold the entire pension in one currency.
The Benefits of Moving a UK Pension to a QROPS Thailand
What are the benefits of a QROPS Thailand Pension Transfer for British expats?
• Avoid UK income tax
• Avoid UK dividends tax
• Avoid UK capital gains tax (CGT)
• Avoid UK inheritance tax (IHT)
• Currency choice. You can choose to have your pension transferred to a QROPS denominated in USD, EUR or keep it in GBP
• Have the ability to make higher returns with freedom of investment
• Family Protection: Upon death, the entire pension pot gets passed on to your nearest and dearest
• Security: The pension is held in a secure jurisdiction such as Gibraltar which has its own strong financial regulations. Click here for more info on the Gibraltar financial services commission
What is the economy like in Thailand?
Thailand exports an increasing value of over $105 billion worth of goods and services annually. Major exports include Thai rice, textiles and footwear, fishery products, rubber, jewellery, cars, computers and electrical appliances. Thailand is the world’s no.1 exporter of rice, exporting more than 6.5 million tons of milled rice annually. Rice is the most important crop in the country. Thailand has the highest percentage of arable land, 27.25%, of any nation in the Greater Mekong Subregion. About 55% of the arable land area is used for rice production.
Substantial industries include electric appliances, components, computer parts and cars, while tourism in Thailand makes up about 6% of the economy. Prostitution in Thailand and sex tourism also form a de facto part of the economy. Cultural milieu combined with poverty and the lure of better earnings have caused prostitution and sex tourism in particular to flourish in Thailand. One estimate published in 2003 placed the trade at US$4.3 billion per year or about three percent of the Thai economy.
Thailand’s landslide victory by the Pheu Thai Party has led to investors entering back into the Thai market. The government will continue to run a budget deficit for the next two years; the shortfall will average 2.8% of GDP. The Bank of Thailand (BOT, the central bank) will tighten monetary policy.
Owing to the strong performance of the economy in the first two quarters of 2010, the Economist Intelligence Unit has revised up its GDP growth forecast for the year as a whole from 4.1% to 7%. Growth will moderate to 4% in 2011.
Brits in Thailand can now get their money offshore to a safe haven such as Gibraltar or New Zealand, whilst avoiding UK taxes on their pension.
What is a QROPS Thailand?
A Qualifying Recognized Overseas Pension Scheme (QROPS Thailand) allows your UK pension to be transferred offshore to reduce your tax burden. Effectively, you will no longer pay UK tax on your pension whilst you are offshore and after 10 years of living offshore, the reporting requirements to HMRC cease.
If you are living in Thailand at the moment, you can take advantage of your offshore address in order to move your UK pension into a QROPS Thailand to avoid further UK taxes down the line. You can transfer to a QROPS in New Zealand which would avoid all taxation, but the investment range is limited or you could transfer to a QROPS in Gibraltar which opens up your investment options although you would pay a small 2.5% flat rate of tax on any income you receive.
Can I Move My UK Pension to a QROPS in Thailand?
Do I need to move my pension to Thailand?
No. Thailand does not have any QROPS. Your pension can be transferred to a secure jurisdiction such as New Zealand or Gibraltar where it will be out of the UK tax system and your pension will be paid gross and grow tax free.
Do I need to live and retire in Thailand?
No, you can live anywhere offshore. As long as you are outside the UK, your QROPS will grow free of UK tax. If you ever return to live permanently in the UK, your pension will follow UK Self Invested Pension Plan (SIPP) rules. The advantage is that you could take the increased benefits whilst offshore, thus reducing your tax burden when you go back to the UK. The part of your pension which is drawn offshore would not be taxed in the UK.
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Pension tax relief for British expats, QROPS Thailand article written by QROPS Specialists.