1. Retiring in Thailand: How to Make Your Pension Last
UK pension transfers - If you have retired or intend to retire in Thailand, you can now move your
pension to a Qualifying Recognized Overseas Pension Scheme (QROPS) to avoid UK taxation and
enhance your pension pot. 1 in 10 Brits have now moved offshore. Many have moved to Thailand and
why not? What is it about the Land of Smiles with its scenic coastlines, deep blue, welcoming seas,
healthy food, cascading waterfalls, picturesque mountains and alluring dive spots that attracts so many
British retirees? Irrespective of whether it's the environment, the weather, the culture, the delicacies,
the sports, the nightlife, a healthier lifestyle or the cheaper prices there is something about Thailand
that British expats like. But, when you move there, how can you make your pension last? How can you
manage your money in retirement in Thailand and make it last? Now that you are residing in Thailand, it
makes sense to minimize your taxes and maximize your investments, so that your pension lasts longer.
An enhanced pension, warm climate, white beaches and an avoidance of UK taxes, what more could you
want? What about the ability to pass on 100% of your pension pot to your loved ones after you die, so
your grandchildren get the best start in life? You could even pass on your monies to charity or any
named beneficiaries you like rather than into the hands of the Inland Revenue?
Quite a few British expats are unaware that there's a way to avoid paying taxes to HMRC when you are
living in Thailand. How would you like to stop paying taxes on your pension? Well, it's now attainable
due to new pension rules which were launched on April 6th, 2006 and those rules were strengthened
recently to ensure pension transfers are more secure and trustees abide by the Inland Revenues’
intentions. Here’s an example of a QROPS pension transfer. Envision you have a £200,000 in your
pension pot and you have just moved to Thailand. Should you leave it in the UK you have the ability to
take 25% or £50,000 as a lump sum and the rest must pay you an pension income for life. For
argument’s sake, let’s assume it pays 5% in drawdown, which would pay you a pension income of £7,500
per yr. Under a QROPS, you should get a heightened 30% as a lump sum that's £60,000. The remainder
has to pay you an income for life. But, some QROPS jurisdictions will pay you approximately 120% of
GAD rates (the rates used within the UK to calculate your pension). So, in the event you took the same
lump sum as in the UK, your pension under a QROPS would be enhanced to £9,000 per year, 20% more
than you would get in the UK. A QROPS transfer avoids inheritance tax, the 55% tax upon death that the
UK charges, avoids UK income tax of up to 50% and pays you an increased pension income of up to 20%
more. Furthermore, you can choose the currency of your pension and invest in a much wider range of
investments which could further enhance your pension.
Inheritance tax