Most British expatriates are unaware that as of early 2006, changes in legislation have allowed many UK pensions to be transferred out of the country. Not all pensions are
transferable and sometimes (if the pension is extremely small) the costs involved mean it is a good idea to leave it where it is.

The most obvious benefits from transferring it abroad are those related to the tax treatment the pensions would receive in an offshore jurisdiction.

For Phuket residents, from my experiences, I have never met an expat who has been taxed by Thailand on bringing their pension money into the country. But while there are indeed enormous potential income and inheritance tax savings, these are not the biggest potential benefits.

By far the greatest advantage is this: you will not be forced into what is statistically a losing bet with an insurance company, thus forfeiting the entire value of your life’s pension savings upon your passing.

The UK pension system requires an annuity to be purchased when you reach age of 75, and from then on the pension holder receives a fixed stream of money for as long as they live. While this system is admirable in that it ensures people with smaller pensions continue to receive a retirement income, many people have larger sums of money in their pension, and should they pass on soon after being forced to take the annuity, then the insurance company keeps the whole lot.

On top of having much more freedom to choose when, where, and how to invest your pension once it is transferred abroad, avoiding an annuity often means there will be a sizable amount of money left over to give to whomever you nominate as your beneficiaries.

Even if you don’t like your children, spouse, or charities, leaving the money to your financial advisor is probably preferable to giving it to some big, lifeless corporation.
For Phuket residents, drawing an income from any pension scheme is extremely easy. As I mentioned above, I have never heard of Thailand taxing anyone on bringing money into the country. This may change in the future, but for now one can draw their income here through
many different channels.

One can simply leave the funds in a foreign bank account and draw money out of the ATMs for spending cash and make transfers to the sellers of any big ticket items such as cars and the like. One could also have their pensions withdrawals transferred directly from their scheme into their Thai bank account if they have one.

As long as they keep records of all inflows from abroad, they should be able to repatriate the funds abroad should they decide to leave the country at some point in the future.

No other country that I know of allows its expatriated citizens to move their pensions to an offshore jurisdiction (even current residents of the UK can transfer their pensions if
they have legitimate plans to retire abroad). Many of Phuket’s residents are unaware of this new legislation passed in 2006. If you have spent time working in the UK, it may be one of the easiest financial decisions you will ever make.

David Mayes MBA can be email at david.m@faramond.com.