Expat Investments

TCA

chiang_mai wrote: »

This is a UK based portfolio which will utilise the UK personal exemption limit.

Assuming you're talking about the UK personal allowance, there has been talk of scrapping the entitlement of non-resident British citizens. It wouldn't surprise me in the slightest, so perhaps something to consider if that matters to you.

bostonerimus

TCA wrote: »

Assuming you're talking about the UK personal allowance, there has been talk of scrapping the entitlement of non-resident British citizens. It wouldn't surprise me in the slightest, so perhaps something to consider if that matters to you.

This is true. Right now you have to file a R43 to claim the income allowance and the OP should do that so they can get their HMRC taxes right. Also it's worth knowing how Thailand will tax any remitted funds. Of course there is the 5 year CGT rule for UK non-residents.

If the OP want's to have a lower UK equity exposure it's easy to do with a globally weighted equity fund and they could also add in some extra SE Asia if they want to be a little locally over weighted.

chiang_mai

Yes we're aware of that potential move and have been watching carefully, our Plan B, if that happens, is to switch to Luxemborg, but in the meantime.......!

chiang_mai

The tax rules here are odd, to say the least! I have a personal allowance I can use which is quite generous, plus income is taxed on a sliding scale that starts quite low. The big problem the tax people have is trying to prove that money bought into the country at any point in time was savings or earned income and PWC Thailand tells us we're pretty safe on that front since it's almost impossible to distinguish between the two. That fact notwithstanding I would likely keep any profit outside of Thailand since I manage my local and foreign currencies in their country of origin.

And the 5 year CGT rule doesn't worry me since I've already been outside the UK for 15 years and am unlikely to return on a permanent basis.

The way Transact operates is my draw-down pension is set up to be paid without Uk being tax and my tax coding is on their system - the new investment portfolio would simply be an extension of my pension portfolio and would use the same tax details,

bostonerimus

chiang_mai wrote: »

The big problem the tax people have is trying to prove that money bought into the country at any point in time was savings or earned income and PWC Thailand tells us we're pretty safe on that front since it's almost impossible to distinguish between the two.

Wow, I'm amazed at that advice. I'd expect someone like PWC to tell you to fully and correctly disclose the type and origin of all income so that it can be correctly taxed. Surely it's the tax payers obligation to correctly file their taxes and any knowing mischaracterization of income or gains would be tax fraud.

mapk

bostonerimus wrote: »

Of course there is the 5 year CGT rule for UK non-residents.

I wonder if you could explain this rule - or perhaps provide a link for further info..

TCA

http://www.litrg.org.uk/tax-guides/armed-forces-and-tax/other-tax-issues/capital-gains-tax-armed-services/capital-gains-ta-0

chiang_mai

Thailand is not the UK, here, less than 2% of the population file tax returns and as a non-Thai I am not required to file a return unless I wish to recalim tax already paid. But since I am retired and my long stay visa forbids me to work here, the only Thai based income I can possibly have is from in-country investments, the tax on which is fully recorded by the banks and is paid at source. Overseas earnings such as pension and investment income is of no interest, no pun intended, to the Thai tax authoriities and PWC knows this hence the advice is appropriate.

There is a process that can be used for account management involving FIFO/FILO etc. This assumes for accounting purposes that funds entering an account first must be the first to be withdrawn, ergo, where investment income is mixed with savings this rule can be applied to determine whether it is investment income or savings that iare being remitted overseas.

If the UK does emove the personal tax allowance from people such as myself, one answer may be to buy only accumulation units since as a non-resident I am not liable to capital gains. Ditto in Thailand, I am CG exempt hence there is no income to be taxed,

chiang_mai

Let me just say thank you for the replies I've received to my OP, I find it really helpful to understand the persepctive of other investors, especially those that are onshore UK.

From what you've written your concerns are:

The large number of funds;
A perception of higher than desired risk and poor balance with bonds;
Potentially overweight UK, given Brexit concerns;
uncertainty regarding the tax position in UK and Thailand;
Potentially underweight US.

I hope I've managed to explain my rationale in response to those points but thank you once again for identyfing them. My concerns are a lack of suitable safe bond type alternatives in order to balance against the equity holdings, good options are far and few between currently. A second concern is finding funds that hold a good percentage of investments in China but also have decent alternate country holdings, it seems it's all or very little with the China related funds.

grey_gym_sock

chiang_mai wrote: »

If the UK does emove the personal tax allowance from people such as myself, one answer may be to buy only accumulation units since as a non-resident I am not liable to capital gains.

that doesn't get you out of UK income tax. the income on accumulation units is taxable even though it isn't paid out (and the basis cost for capital gains tax is increased by the amount of the income, so it isn't also taxed as a capital gain).

so, assuming that any income from income units is subject to UK tax in your situation (which i don't know, but you seem to imply), then switching to accumulation units won't change that.