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Phuket Finance: UK bill reassures QROPS retirees

Legacy Phuket Gazette

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PHUKET: With the recent release of the draft finance bill for 2013, the UK government has eased worries of the QROPS (Qualified Recognized Overseas Pension Schemes) industry that new legislation might close down the market.

Last year, offshore pension providers were quite shocked when HMRC (Her Majesty’s Revenue and Customs) removed overnight the ability of expat retirees to transfer their pensions to Guernsey, which had been at the forefront of the offshore pension transfer industry.

There have been some minor changes in this year’s bill – mainly dealing with reporting requirements in the event that a pension scheme should no longer be a QROPS in the future – but overall it is seen as a positive nod from the government that they aren’t going to close down the market.

Many retirees were worried that their right to transfer a pension to a jurisdiction other than the one they reside in, might be legislated away. Obviously, this would be a huge blow to anyone planning to retire in Thailand, as there is no qualifying scheme administered from this country.

If you have large potential tax liabilities when drawing your pension, transferring to an offshore pension scheme is a way to stretch the after tax value when drawing your pension down. In Gibraltar you will pay a flat 2.5% income tax regardless of the amount, which can almost double the spending power of your pension if you are in the upper tax bracket of the UK.

However, one needs to ensure that the benefits outweigh the costs, and many smaller pensions are simply not worth transferring. HMRC has been proactive in giving warning to advisors who do not provide accurate advice in this area, even going so far as threatening to seek hefty fines from companies that falsely claim to be specialists.

For instance, even with our firm’s FSA (Financial Services Authority of the UK) regulated branch, which has staff holding specialist qualifications for pensions and taxation, we have been advised by counsel to refrain from use of the word “specialist” despite the number of successful transfers we have completed.

That being said, I would make sure any company advising you on the transfer of your UK pension would be regulated within the UK and hold the required qualifications to give the proper exit advice. Keep in mind that as far as Thailand goes, regardless of what qualifications an advisor holds in other jurisdictions, their advice in this country is not regulated by those agencies.

While there is no guarantee the HMRC will not do a 180 degree turn next year, it is good to know that for now expats retiring to countries such as Thailand will be able to move their pensions to a safe jurisdiction and potentially save a fortune in taxes. The larger the pension is, generally speaking, the larger the potential tax bracket and thus the greater the potential benefits from moving the pension offshore.

David Mayes MBA lives in Phuket and provides wealth management services to expats around the globe, focusing on UK pension transfers. He also runs Humble Asset Management, a British Virgin Islands based alternative investment fund. He can be reached at david.m@faramond.com or 085-335-8573.

— David Mayes

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Archiving articles from the Phuket Gazette circa 1998 - 2017. View the Phuket Gazette online archive and Digital Gazette PDF Prints.

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Governments & old media versus social media – who will win? | VIDEO

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Governments & old media versus social media – who will win? | VIDEO | The Thaiger

We look at the recent changes made by the Australian and Indian governments to except control over the world’s biggest social media platforms. India has issued strict new rules for Facebook, Twitter and other social media platforms just weeks after the Indian government attempted to pressure Twitter to take down social media accounts it deemed, well, anti social. There is now an open battle between the rise of social media platforms and the governments and ‘old’ media that have been able to maintain a certain level of control over the ‘message’ for the last century. Who will win?

The rules require any social media company to create three roles within India… a “compliance officer” who ensures they follow local laws; a “grievance officer” who addresses complaints from Indian social media users; and a “contact person” who can actually be contacted by lawyers and other aggrieved Indian parties… 24/7.

The democratisation of the news model, with social media as its catalyst, will continue to baffle traditional media and governments who used to enjoy a level of control over what stories get told. The battles of Google and Facebook, with the governments of India and Australia will be followed in plenty of other countries as well.

At the root of all discussions will be the difference between what governments THINK social media is all about and the reality about how quickly the media landscape has changed. You’ll get to read about it first, on a social media platform… probably on the screen you’re watching this news story right now.

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The social media giants in battle with ‘old’ media and world governments | VIDEO

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The social media giants in battle with ‘old’ media and world governments | VIDEO | The Thaiger

“The rules signal greater willingness by countries around the world to rein in big tech firms such as Google, Facebook and Twitter that the governments fear have become too powerful with little accountability.”

India has issued strict new rules for Facebook, Twitter and other social media platforms just weeks after the Indian government attempted to pressure Twitter to take down social media accounts it deemed, well, anti social.

The rules require any social media company to create three roles within India… a “compliance officer” who ensures they follow local laws; a “grievance officer” who addresses complaints from Indian social media users; and a “contact person” who can actually be contacted by lawyers and other aggrieved Indian parties… 24/7.

The companies are also being made to publish a compliance report each month with details about how many complaints they’ve received and the action they took.

They’ll also be required to remove ‘some’ types of content including “full or partial nudity,” any “sexual act” or “impersonations including morphed images”

The democratisation of the news model, with social media as its catalyst, will continue to baffle traditional media and governments who used to enjoy a level of control over what stories get told.

The battles of Google and Facebook, with the governments of India and Australia will be followed in plenty of other countries as well.

At the root of all discussions will be the difference between what governments THINK social media is all about and the reality about how quickly the media landscape has changed. You’ll get to read about it first, on a social media platform… probably on the screen you’re watching this news story right now.

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Never miss out on future posts by following The Thaiger.

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Business

Turbulence ahead for Thailand’s aviation industry | VIDEO

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Turbulence ahead for Thailand’s aviation industry | VIDEO | The Thaiger

When the airlines, in particular, were asking the government to put their hands in their pockets for some relief funding in August last year, it was genuinely thought that international tourists would be coming back for the high season in December and January. At the very least local tourists and expats would head back to the skies over the traditional holiday break. And surely the Chinese would be back for Chinese New Year?

As we know now, none of that happened. A resurge in cases started just south of Bangkok on December 20 last year, just before Christmas, kicking off another round of restrictions, pretty much killing off any possibility of a high season ‘bump’ for the tourist industry. Airlines slashed flights from their schedule, and hotels, which had dusted off their reception desks for the surge of tourists, shut their doors again.

Domestically, the hotel business saw 6 million room nights in the government’s latest stimulus campaign fully redeemed. But the air ticket quota of 2 million seats still has over 1.3 million seats unused. Local tourists mostly skipped flights and opted for destinations within driving distance of their homes.

As for international tourism… well that still seems months or years away, even now.

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