Family Money: Are you evading UK tax?
By Leslie
Wright,
Managing director of Westminster Portfolio Services (Thailand) Ltd.
Some British expatriates think they’re being smart by
“neglecting” to inform the UK Inland Revenue Department that they’ve
left the UK. They reason that they can continue to receive their State
Pension with indexed increases every year, and don’t have to bother
making changes to their mortgage or rental arrangements.
At the same time, they imagine that they can move
substantial amounts of onshore capital into tax-free offshore investments,
and draw down an income from those investments in the country where they
are actually resident, without incurring any liability in UK. They want -
and expect to achieve - the best of both worlds.
Well, sooner or later their plans will come unstuck -
even if only when they die and their heirs try to unravel the estate
through probate and the UK taxman appears over the horizon wanting his
share. A worse scenario is running the risk of prosecution for
deliberately defrauding the IRD. Avoiding tax is one thing; evading it is
quite another.
In fact, the very first step you should take towards
becoming an expat should be to the UK’s Inland Revenue to sort out your
tax liabilities. The IRD should be informed in advance of your departure
by completing form P85 to declare that you are going. (A range of guidance
leaflets and forms may be downloaded from the IRD website,www. inlandr
evenue.gov.uk).
To avoid tax on your foreign earnings and income, you
must be non-resident in the UK for a period of one complete UK tax year
(6th April to 5th April), as discussed in the IRD’s guidance leaflet
IR20. Otherwise, if you are away for less than a full tax year you will
remain liable to UK tax.
You also have to be careful how long you stay in UK
during subsequent visits. Some barroom tax experts quote the 180-day rule
whereby you’re permitted to return to UK for not more than 180 days in
each tax year without attracting income tax liability. But there’s also
a less well-known rule whereby temporary visits to UK must not exceed 90
days per annum aggregated over four years.
Also, the local tax authorities in the new host country
must be informed of your imminent arrival - although in practice in
Thailand, this will only apply if you take up legal employment here and
apply for a work permit.
Those who think they’re smarter than the local
immigration and tax man by doing a visa run every 90 days may eventually
come unstuck also, despite the fact that expats have been getting away
with this practice for years, largely because the bureaucracy was not up
to keeping tabs on everyone.
This is changing with the gradual introduction of
inter-departmental computerisation, and there are indications that the
government is going to clamp down on expatriate tax evaders, despite
protesting letters to the newspapers that because expats are spending all
their money in Thailand, they should be welcomed instead of being
harassed. (How these same correspondents would feel about Asian and
African immigrants to UK getting around immigration rules and evading the
taxman is never mentioned, of course.)
Existing onshore investments
Expats who leave the UK with pre-existing individual
savings accounts (ISAs) are allowed to continue to hold these during their
time living and working overseas, but are not allowed to make further
investments into them while non-resident.
Similar exclusions apply to onshore pension
contributions. This is the most widely misunderstood and abused area: the
expat thinks that if he doesn’t tell the pension provider that he’s
now resident offshore, he can continue to make contributions and
eventually draw down the pension to his onshore (or even offshore!) bank
account. If the onshore provider or the IRD find out that he is not
actually resident in the UK, he’ll be in a spot of trouble, for
technically committing tax fraud. Pleading ignorance is no excuse. The
pension is frozen and all contributions made during the time he was
overseas must be returned.
Given that the pension must be frozen until the
plan’s maturity date or the contributor’s return to UK residency, it
is essential that expats seek professional advice to plan ways in which to
make up for any retirement income shortfall.
Some ‘clever’ expats imagine that they can transfer
the frozen pension offshore to gain tax advantages. In practice, IRD
approval has to be granted to move a tax-efficient onshore pension
offshore - and then only to a pension provider approved by the IRD, which
means one offering a plan comparable to the onshore one. And the providers
generally thought of as being offshore - insurance companies in the Isle
of Man or Guernsey for instance - do not offer “approved” pension
schemes.
Onshore corporate pensions can be transferred to
onshore personal pension schemes, over which you may have greater control,
and access to 20% of the ‘pot’ upon reaching the age of 50 - but it is
generally not worth attempting to transfer a ‘frozen’ onshore personal
pension scheme offshore. The hassle typically outweighs the small
advantage. Better to wait for the plan to reach maturity and take the
benefits then.
However, UK expats should consider continuing Class III
contributions to the State Pension whilst resident abroad to ensure full
benefit upon reaching retirement age - but should also bear in mind that
overseas State Pension entitlements do not increase on an indexed basis,
so this potential shortfall has to be considered in their financial
planning also.
Personal Directions: Our most valuable asset? Our brain
By Christina Dodd,
founder and managing director of Incorp Trining Associates
So much of our time these days is directed towards staying
fit – exercising – joining the local gym and the local team in just about
whatever sport you want. There are numerous ways to get trim and lose weight
to stay healthy … and to finally fit into those rather tight jeans you
bought five years ago! Everywhere you go people are promoting healthy
activities, healthy foods and drinks, healthy pastimes, a healthy environment
and so on. Just in the area near my house huge slabs of concrete were recently
poured and I thought, what are they building now? To my surprise a few weeks
later, these concrete areas have become outdoor exercise parks where the
locals gather to do aerobics together, or Tai Chi or other forms of exercise.
Driving past one morning I thought – it’s refreshing to see people getting
involved like this!
The one thing, however, that sticks out like a sore thumb
when we look at all this physical activity going on (of which I am 100 percent
in favour) is that we always jump to exercise our body much more quickly than
we jump to exercise our brain. The poor old brain doesn’t seem to get a look
in at all. We think that it can take care of itself and nourish itself without
any outside assistance. After all, it’s a brain and it sits in our head.
That’s where it is and it can look after itself. That’s where our
knowledge is – and our knowledge of course comes automatically – it’s
like turning on a tap to get running water.
So many of us don’t realize that just as we have to
exercise our bodies to improve health and fitness and overall physical
ability, so too do we need to exercise our brains or our minds in order to
improve our thought processes, our mental and intellectual capabilities.
Indeed physical activity plays a role, and an important one at that, in
contributing to a good state of well-being and mental health. But we need to
go one step further and exercise our mental capabilities in order that we can
improve upon the one most valuable asset we all possess but under utilize –
our brain!
When was the last time you did a cryptic crossword or
challenged yourself with a difficult puzzle to solve? How much time of your
day do you spend as the receiver of information as opposed to the sender or
initiator? How often do you read a thought provoking book or write down your
ideas on a subject that interests you?
If you sit and think about these questions, you’ll no
doubt realize that for most of the time we behave passively. At night we will
watch a movie or whatever we can find on the TV. We will read the paper – or
skim through the paper. We want others to provide the stimulation because at
the end of the day we’re tired. At work most of us will be repeating the
previous day’s routine.
The majority of people do not have an original thought in
their day because of the way their life is and therefore there is no value
added to their intellectual or mental capability. Imagine if we didn’t have
television for a day or a week! People would riot in the streets. But it’s a
remarkable thing how much has been taken from us by television. There are
pluses and minuses here, but overall we have really suffered intellectually as
a result of television.
I remember, as some of you also can, when growing up there
was no TV. And because of this we found ways of entertaining ourselves as kids
through inventing games with our friends for example, or through reading and
making things with our hands. The world was a different place then and we
really had to use our head to get ahead.
The less we have to think, the less we will think. We
will forget how to tap the tremendous resources that exist in our brains. The
longing for learning will no longer be and we will live in a world of
non-thinkers. What a dessert, what a wasteland with little hope for survival!
A colleague of mine is very passionate about getting the
message across to people and young people, in particular, to use their
“brain power” to get ahead in this world. Instead of sitting and waiting
for others to provide them with the means to a successful and meaningful
existence, they should be honing their mental capabilities and working it out
for themselves. They have to be self-starters, proactive, planners,
ideas-people, thinking original thoughts and then finding ways to proceed –
not copiers of others, but self-made individuals.
The means to do this is at our fingertips and it takes
application and the desire to learn. It takes the desire to push aside, if you
can, all the clutter of what is fed into our lives every day. A monumental
task to say the least, but a necessary one and one filled with a certain
amount of urgency. The last time I sat in a room filled with seventy students
who were in their third year at university I thought to myself, where are the
thinkers? Where are the ones with original thoughts?
We all carry around with us one of the most valuable assets
of our lives – our brain. The full power and force of the brain is
still not understood regardless of the extensive research and study over the
many decades. It is that intricate and that complex. So shouldn’t we be
paying a little more attention to it? We only have one so instead of thinking
of fitness only in terms of our bodies, let’s think fitness in terms of our
mental and intellectual capacity. Be proactive as opposed to reactive and take
on tasks that challenge the mind – and exercise it - rather than put it to
sleep!
For more information I can be contacted at cmedodd @chmai.loxinfo.co.th
and until next time, have a great, proactive week!
The Doctor's Consultation by Dr. Iain Corness: Eat and grow thin
Here we are, almost at the end of the first month of the
New Year, 2003 and already many of you are having problems with sticking to
your new year’s resolutions, aren’t you? For most, it was a case of losing
some extra kilo’s that were probably stacked on over the Xmas-New Year
break, and to make it a little easier for you, here are some of the no-no’s
and what you can substitute for them in your diet. You do realise that your
weight is dependent upon what passes over your gums, and nothing to do with
what you breathe or bath in, don’t you!
Let’s look at fatty foods first, and the first shock and
disappointment for the health conscious salad freaks is that ordinary
mayonnaise is very high in fat. There is nothing to be gained by eating rabbit
food if you douse it with mayo, oily dressings, cream sauces or sour cream.
Now don’t give up on the lettuce - you can use low fat mayonnaise, vinegar
and lemon juice instead.
You probably do know that cheese should not be on your
menu, but you can have reasonable (small) quantities of ricotta and cottage
cheese and low fat cream cheese. But be honest with yourself. OK?
So you want to eat meat? That can be done, but you will
have to avoid the fat on the outside of meat and duck and chicken skin. You
must also give sausages, bacon and salami a bit of a wide berth too, but you
can have lean cuts of meat such as ham, beef and turkey and chicken breast. It
is also best to trim the fat off the meat before cooking.
I often advocate an Asian diet for people who are watching
their weight, but that does not include such Asian favourites as fried Dim Sum
items, spring rolls (except Vietnamese ones) or prawn crackers. Steamed Asian
Dim Sum items are fine.
Others in the no-no category are deep fried or battered
foods, pies and pasties, crisps and hot chips (french-fries). These should be
replaced by foods that are cooked without fat or with a minimal amount of poly
or mono-unsaturated vegetable oil, so look at substituting grilled fish and
meats, rotisserie chicken (but take the skin off) and dry-fry meats. You can
have oven baked chips, if you must have chips with your steak.
In cooking and spreads you should try and get away from
large amounts of margarine, butter, oil, cream, peanut butter, dripping and
lard for all the UK folk, and coconut cream (so that rules out the southern
Thai curries). The recommendation is to limit oil or margarine to one
tablespoon a day, and it should also be poly or mono-unsaturated.
Fortunately, fruit and vegetables, particularly raw or
steamed, or even roasted using an oil spray only, are fine to include in your
daily diet. But remember that too much of too sweet fruits is not all that
good for you either! It really is the ‘all things in moderation’ thing
again.
By the way, all these dietary restrictions are also good
for anyone who is trying to lower their cholesterol levels, or even
triglycerides (the other blood fat). Of course, if you do not know what your
levels are, and you are over 40 years of age, come and get your levels done.
Today!
Agony Column
Dear Hillary,
I know you like chocolates, but last year we took some
chocolate candy and some of those strange jellied candies in little cups
(and some real food) out to the orphanage. None of the children wanted the
chocolates and all quickly devoured the jellied candy. Do Thais -
especially the ladies - not have taste for chocolate? I thought all women
loved chocolates. And if they do, where is a good place to buy quality
boxed chocolates?
A stranger in a strange place
Dear Stranger,
How could you possibly be a stranger here? Thailand
is the most welcoming country in the world, just remember to bring your
wallet, Petal (and champagne and chocolates for Ms. Hillary). Actually,
whether Thais like chocolate depends upon where they come from. The Esarn
peoples tend not to like sugary sweet things and chocolate is amongst
that. By comparison, the southern Thais have a much sweeter tooth.
Hillary? Well now, where do you get nice chocolates? It’s easy, you just
pop down to the big supermarkets like a good boy and you will find quality
boxed chocolates there. Wrap them securely, with a label addressed to
Hillary, c/o this newspaper and I will get them. Thank you in advance, and
also a big thank you for remembering the children less fortunate than
ourselves.
Dear Hillary,
This year I went on holidays for a few days in Jomtien,
instead of Chiang Mai. The beach road has certainly changed since I was
there last, but the vendors were just the same, pestering us with fairy
floss, wooden planes, sunglasses, hammocks, som tum, tod mun pla and ice
creams. But there was something different there too, as we noticed that
the police were coming along the beach and the vendors would go scurrying
off like sandcrabs and disappear. However, about ten minutes after the
police swoop, the vendors were all back again. Where do they go to
Hillary, when the police come? They just disappeared like magic! Is it
illegal for them to be on the beach?
Sandgroper
Dear Sandgroper,
Beach vendors are a curse and spoil my little forays
to the land of deck chairs and banana boats. Hillary would imagine that
they should have some sort of a permit, just the same as the beach
concessionaires have - which costs money, by the way. The vendors all rush
across the road and up the side sois to elude the police. I commend the
police for helping clear the beaches, but I am just a little worried that
I will next be woken up by a policeman asking if I would like to buy some
peace and quiet. But that would never happen, would it! Not in Thailand,
now that complete transparency is here.
Dear Hillary,
I read much about the problems people seem to have with
the songtaews and even though I only come here once a year I felt moved to
write to you, following my experience with one the other day. Wishing to
only go a short way to the market and then return, I hailed a bus and
explained what I wanted. A fare was agreed upon and the trip was carried
out successfully, with him waiting for me at the market. I was a little
longer than I expected, but he took it all with good graces. When I
returned home I gave him more than the agreed fare, because of the extra
waiting time, but he refused to take the extra! Unfortunately I did not
get his number, but I just wanted to let others know not to judge them all
by one.
Nancy
Dear Nancy,
I am delighted to hear this, as undoubtedly the
drivers do get painted in a bad light, but I must also add that some of
their vehicles look as if they have been painted in a bad light too! For a
tourist venue, the drabness of our public transport, as frequent as the
songtaews may be, is appalling. Hillary would like to see the city fathers
suggesting some bright florals, rather than the dull rusting monochromes
we have right now. Thank you Nancy for taking the time to tell us of this
ambassador for our city.
Dear Hillary,
I just can’t believe that the letters you get are
real. Nobody is that silly, or are they? Every week you publish all these
letters from people with problems. I don’t believe the number of people
or the number of problems. Could you confirm or deny this? By the way you
will be helping me win a bet.
Anders
Dear Anders,
First of all, your point about “silly” letters -
you wrote in! Is your letter “silly” too? You should not be too
surprised that this column publishes letters from people with problems, as
that is what ‘Agony Aunts’ are all about, Petal - solving problems for
people with problems of the heart. Secondly, could I confirm or deny what?
That people have problems? That people write in? Anders, my mailbox is
full every week. Finally, and most importantly, betting is not legal in
this country, so I cannot make myself party to such illegal goings-on.
Please report to your closest police station and turn yourself in,
that’s the lad!
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Camera Class: Inspiration and Larry Dale Gordon
by Snapshot
Have you a favourite photographer? No? Well, you should!
Everyone should have a photographer whose work stimulates you to greater
heights. For me, I have many whose work I enjoy - Norman Parkinson, Helmut
Newton and Jeff Dunas all rate high, but one photographer who inspires me not
only with his images, but also with his words, is Larry Dale Gordon.
Now when I say that your favourite photographer’s work
should inspire you, that does not mean that you should rush out and slavishly
copy their work. Don’t laugh, I have seen it done so many times in camera club
level photographers who have been most upset when I mark them down for copying,
rather than being creative.
When I say “inspire” I mean that you look at the work and
say to yourself, “How did he/she do that?” You should look at the end result
and work out how you can use that technique to produce your own shot. Half the
fun in photography is working out “how to” with the other half being the
enjoyment of looking at the final image.
So why does Larry Dale Gordon inspire me? There are many
reasons. First off, he is a self trained photographer, who believes that the way
to learn is to do it. Let me quote you from one of his books, “I learned
photography through experience; by putting film through the camera, peering
through the lenses, trial and error, and pondering every facet of light. It’s
the only way. If you think there is another way, or a faster way, write a book
telling how and you will make considerably more money than by being a
photographer.” These are very wise words. Cut them out and stick them on your
bathroom mirror and read them every day! In fact, a renowned Thai photographer,
Tom Chuawiwat, used to tell me that professional photography was the only job
where the client paid you to learn!
I’ve tried to see just what it is about Larry Dale
Gordon’s pictures that appeal so much to me and I’ve come up with two basic
concepts. Simplicity and Colour.
Look at the photograph I have used to illustrate this
week’s article. A classic. The couple on the pontoon, looking at each other,
silhouetted against the water in the background. Unfortunately, this newspaper
is a black and white medium, so just imagine, if you will, what that shot looks
like with the water a golden orange with the black shadows and silhouette. It is
a simple, uncluttered shot with only one colour in it. But that one shot Larry
Dale Gordon has sold many times over through his stock agency. Why? Because it
is classic and timeless and there is absolutely nothing to detract (or distract)
from the couple in the photograph.
Now before you rip out with two friends at sunset and try and
duplicate this shot, read the second paragraph again! Let’s not make slavish
copies! But instead, let’s look at how we can accomplish the effect of a
monochromatic picture and silhouette. This can actually be done any time of day,
but to make it easier for you, pick your favourite beach or riverside at a time
when the sun can be behind your subject - be that people or things.
Now you need a tricky filter, called a “tobacco” filter.
On that bright sunny day, with the light behind your subject(s) hold this
brown/orange filter over the lens and pop the shutter. Stick it on Auto if you
will, the camera will do the rest. Even experiment with different colours to get
strangely wonderful or weirdly dreadful results.
The only point to really remember is to get the light behind the subject. You
will be able to get this “pseudo sunset” look any time after 3 in the
afternoon. Try it and amaze your friends with a classic silhouette - and if you
don’t tell them about Larry Dale Gordon, I won’t!
Recipes from Rattana: Korean BBQ
The Do-It-Yourself BBQ on the table is becoming very popular
these days, with commercial outlets dealing in nothing else available in the
major shopping centres. The concept is actually no different from any BBQ,
where you allow the moisture and fats to run off. With the traditional Korean
BBQ you let this run off into a soup stock receptacle which is heated by the
same source as the BBQ plate, BBQ dome or griddle. This recipe calls for 30
minutes of marinade, which is the secret of giving it the oriental flavour.
Ingredients Serves3-4
Beef, pork or chicken 500 gm
Dark soy sauce 2 tbspns
Light soy sauce 2 tbspns
Spring onion finely chopped 1
Garlic crushed 2 cloves
Ginger root grated 1 tspn
Sesame oil 1 tspn
Sunflower oil 2 tspn
Ground black pepper 1 pinch
Coriander leaf chopped 1 pinch
Cooking Method
Cut the meat into thin bite-sized pieces. In a shallow bowl
mix the soy sauces, spring onion, garlic, ginger root, pepper and sesame oil.
Stir the meat into the marinade and ensure it is all coated, sprinkle with
coriander and let stand in the fridge for 30 minutes.
Brush the BBQ griddle with sunflower oil, heat and quickly
BBQ the meat for about one minute on each side.
Serve with boiled rice and bean sprouts.
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