The recent changes in the interpretation of the Thailand Revenue Code have significant implications for the many UK nationals residing in Thailand. As of 1 January 2024, Thailand will tax assessable foreign-sourced income remitted into the country. This guide provides British expats in Thailand with crucial tax information to help them understand and manage their tax responsibilities.
We recommend that British expats or those considering moving to Thailand watch our video: Thailand-UK DTA: Tax Planning for British Expats in Thailand. It contains a wealth of information and answers many questions from live viewers.
Tax Residency for British Expats in Thailand
If you stay in Thailand for 180 days or more in a calendar year, you are considered a Thai tax resident, regardless of your visa status. As a Thai tax resident, you must file a Thai tax return if you remit assessable income of THB 120,000 a year as an individual or THB 220,000 as a married couple.
Only Taxed on Remittances
Thailand taxes expatriates’ foreign-sourced income on a remittance-only basis. This means British expats potentially only pay tax on the income they bring into Thailand. Income left in the UK or elsewhere is not usually subject to Thai taxes. Categories of assessable foreign-sourced income include pensions, investments, rental income, and property sales.
UK Tax Obligations for British Expats in Thailand
Even if you become a Thai resident, you might still need to lodge a UK tax return. For UK tax purposes, non-residents pay tax on UK-sourced income such as interest, dividends, and rental income. Funds transferred from the UK to Thailand may be considered assessable income in Thailand. Check the Thailand-UK Double Taxation Agreement (DTA) for potential tax relief.
Thailand-UK Double Tax Agreement (DTA)
The Thailand-United Kingdom Double Tax Agreement is essential in preventing double taxation and provides tax relief to residents of both countries. This agreement ensures that you are not taxed twice on the same income, offering significant protection for British expats in Thailand.
Key points to consider include:
- What is taxable?: Not all assets are taxable when transferred to Thailand. It is crucial to determine what is considered assessable income in Thailand and what funds can be transferred into Thailand without incurring a tax liability.
- Tax Credits: If you have already paid tax in the UK funds that you then transfer into Thailand, you may be able to claim a tax credit to offset your tax liability.
- Professional advice: Applying the rules of Double Tax Agreements can be complex, and we advise seeking professional advice. Our Assisted Tax Filing Service is designed to help expats navigate a DTA in Thailand and stay compliant when filing a tax return.
Watch our webinar on the Thailand-UK DTA to learn more about how it affects you.
UK Income Assessable for Tax in Thailand
We advise all British expats to acquaint themselves with the Thailand Revenue Department’s rules on assessable income in Thailand. This is covered under Section 40 (1) of the Revenue Code and is explained in more detail here.
The most common queries we have about income sources for British expats in Thailand are:
UK Pensions
For more detailed information, read our comprehensive guide to Thailand tax on UK pensions here
Most UK pensions are considered assessable income in Thailand. This includes the UK State Pension, SIPPS private and company pensions. HMRC recognised overseas pensions such as QROPS and QNUPS are also considered taxable income if remitted into Thailand. Government, Civil Service and military pensions are exempt from tax in Thailand under the DTA.
Anyone with a British pension, who is a resident of Thailand for tax should also be aware that money drawn as a Pension Commencement Lump Sum, while tax-free in the UK, it is classed as assessable income if remitted to Thailand.
If you plan to remit significant sums into Thailand from a UK pension, you are advised to seek professional tax advice.
Capital Gains and Dividends
Thailand classifies capital gains and investment dividends as taxable income, and you may claim tax relief under the DTA for any taxes paid in the UK.
UK Property Rental Income
Thailand deems revenue from property rentals, including those in the UK, as assessable and taxable income. You can claim tax credits for taxes paid in the UK.
UK Property Sale Gains
Profits from selling an overseas property are taxable in Thailand. If you are a Thai tax resident or planning to move to Thailand and looking to sell an UK property, we strongly recommend seeking professional advice before taking action.
Commonly asked tax questions received from British expats
Tax Filing Requirements for British Expats
In Thailand, taxes must be filed by the end of March for the previous year. You can complete this process online or by submitting a paper return. Navigating Thai bureaucracy can be challenging, so if you need help, consider our filing services. We provide tailored packages to suit all expat tax scenarios, whether straightforward or complex. Our Essential Expat Tax Filing and Assisted Expat Tax Filing services are designed to streamline the filing process and ensure you comply with Thai tax regulations.You can find our more about our tax filing services here.
Practical Tax Tips and Advice for UK Expats
- Record Keeping: Maintain detailed records of all remittances into Thailand and keep separate accounts for different income sources.
- Filing Requirements: Understand and comply with tax filing obligations in both the UK and Thailand.
- Plan Ahead: Seek advice before remitting large sums, such as pension lump sums or property sale proceeds, to avoid unexpected tax liabilities.
- Seek Professional Advice: Essential for complex scenarios involving multiple jurisdictions. If you are looking for a comprehensive analysis of your tax position and clear, actionable advice book a one hour paid consultation. (THB 10,000)
Final Thoughts
Understanding your tax obligations as a British expat in Thailand can be challenging, but with the right knowledge and planning, you can manage your taxes effectively. Use our resources to stay informed about your tax responsibilities. If you have questions or need assistance with your taxes, please book a free consultation with our support team. We’re here to help.
