retiring abroad - non tax resident ?

markcal8888

Hi All,

I will be retiring at 55 and plan on living abroad in the next few years, probably Malaysia or Thailand. The reason I will be going to the Far East is you would have to be a billionaire to retire in this country!!!!!!!!!

My financial situation is as follows.

pension 1 about 6k per annum
pension 2 about 6.5k per annum
2 X flats - 80k each
50 k cash
OAP at a later date

If i live abroad and do not come back to the UK do I still have to pay tax. I hope not as I will not be accruing anything back from the state.

If I rent the flats out will I pay tax?

Will I be able to get tax free interest from my savings.

If I sell the flats what is best plan for the 160k + 50k savings

EdInvestor

markcal8888 wrote: »

Hi All,

I will be retiring at 55 and plan on living abroad in the next few years, probably Malaysia or Thailand. The reason I will be going to the Far East is you would have to be a billionaire to retire in this country!!!!!!!!!
If i live abroad and do not come back to the UK do I still have to pay tax.

Fraid so. Pensions, letting income and cash interest arising in the UK are all taxable,you can set your personal allowance against the income whilch will help a bit.

You may be able to get your pension paid without deduction of tax (assuming it's not a Govt pension) in Malaysia or Thailand, so it is subject to local tax, which may be beneficial.Your state pension, when due, won't be uprated for inflation in Malaysia or Thailand.

If I sell the flats what is best plan for the 160k + 50k savings

What do you plan to live in overseas?Will you rent or buy? IIRC retirees in some Asian countries are required to either buy property or deposit a large cash sum in a loical bank to secure their visa.May be worth checking that.

Are you sure you have enough income/assets (hoiw much rental income do you get?)to stop work? Investing the cash from the properties (or one of them) in a portfolio of high yield shares might be a way to grow the capital while taking a (tax free) income.Same pronciple as rental property but much more liquid as well as better on tax.

If you think you might be back to the UK later (and costs after pension age decline dramatically here, as do taxes, not to mention free health care) then I would keep a bolthole in the UK housing market, otherwise it's very easy to get priced out.

gfplux

If you properly retire overseas, ie get a residents permit, register for tax etc you will be able to get your pensions paid gross and then declare that and other income in your country of residence.
If your "retirement" is just an extended holiday then you will remain resident in the UK and liable to pay tax.

gfplux

Sorry,
should have added that with residential property in the UK you may not be able to persuade the UK Tax people to let you become non resident for Tax purposes.

gfplux

also have a look at this
http://boards.fool.co.uk/Message.asp?mid=10933844
and here
http://www.hmrc.gov.uk/pdfs/ir20.pdf

Cook_County

IR20 is already out of date and about to be withhdrawn, so should not be relied on.

gfplux is correct that you will need to settle somewhere specific to become non-UK resident, and you may of course have tax and social security costs in that other place.

davey9998

if you sold the flats it would be easier to be treated as resident in the country you move to .

assuming you use the 50k in the bank to buy a property over there and don't have CGT to pay on the 2 flats then you could free up another £160k from the flats which could give a nice income of about £8k per year poss more.

if you are no longer uk resident you could get this and your pension incomes paid gross giving you about £20,500 income in total plus you would then get your state pension - loads to live on over there!