Pensions - escaping UK taxation

Old Jan 3rd 2018, 10:30 pm
  #76  
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Default Re: Pensions - escaping UK taxation

Originally Posted by stepen
If you receive dividends etc from overseas without working in the local country then you generally don't have to pay tax on this (depends on the country).
So it's quite possible to not be tax resident anywhere, and also not be subject to tax if you stay less than 183 days.
It was a light hearted comment from me, hence the sneaky smilie. My understanding is that I am Malaysia tax resident (currently) and HMRC are well aware of that. My only address (currently) is here in Penang also and that is my "base" for travelling - quite a lot of travels (different countries) during 2017 and will be the same for 2018. This may or may not change in the future.

As you say above, depends on the country. I have some savings parked in Australia and though Malaysia will not wish to know about it, the Australian authorities certainly do!! As a non-resident visitor based in Malaysia, it gets taxed (withholding tax) at 10 percent by Australia. Actually not bad as the interest rates are favourable.

Last edited by bakedbean; Jan 3rd 2018 at 10:31 pm. Reason: clarification
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Old Dec 4th 2019, 10:26 am
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Default Re: Pensions - escaping UK taxation

Hi everyone,

New to the forum, and came here via discovering this thread, which I'm finding incredibly useful, so thank you!

Has anyone been through this process *recently*? I ask because I see from the LHDN web site that there's now an online form for applying for the residence certificate (I'm not allowed to post URLs, it seems, but if you go to eresidence dot hasil dot gov dot my, it's then the left-hand link, 'akses pemohon'). From what I can tell, you fill in and submit the form and then collect your certficate from your local office a few days later (or maybe they send it, not sure), but I'm not clear whether/when/where you still need to provide copies of your passport and list of movements in/out of Malaysia (maybe they know all that from their immigration systems?) Does anyone have any recent experience?

For context: I'm currently tax resident in the UK. I moved to Malaysia in mid-April this year (via MM2H) and have now done more than the required 182 days here, so I'm looking at making myself tax resident here. Financially I'm not sure it makes much difference for the current year, but it might next year - my income has to date all been from the UK, a combination of rental from my old home, and dividends from my UK company, both of which I understand will be subject to UK tax regardless. But I may do the odd bit of work here and there in third countries in future, most likely as a sole trader / individual (I'll probably close down my UK company), so I'm thinking that being tax resident here in Malaysia and having third-country income remitted directly here would be more efficient.

Am I right to assume that getting a certificate of residence here doesn't then oblige you to claim *tax* residency? (I assume they're different things?) My thinking is that, as we're approaching the end of Malaysia's tax year, I should go ahead and get the certificate anyway, but it's as yet a bit of an open question whether it's worth claiming back-dated tax-residency (with HMRC, i.e. P85 and DT-Individual forms) to April 2019, or whether I should just start it going forward, from January.

Many thanks for any advice or info!
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Old Jan 31st 2020, 1:21 pm
  #78  
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Default Re: Pensions - escaping UK taxation

Originally Posted by FromUKtoKL
Hi everyone,

New to the forum, and came here via discovering this thread, which I'm finding incredibly useful, so thank you!

Has anyone been through this process *recently*?
Last week actully. Note you have to register for a tax number first so do that if you have not done so.
Originally Posted by FromUKtoKL
Does anyone have any recent experience?
I did not do online, I went in person, had to make three trips so you can save yourself one. Go through your passport find the first entry you want considered, note the page number, work your way through all your in/out stamps noting page numbers and reason for exit. A spread sheet will help, can then calculate your days in Malaysia and your periods of absence. Photocopy all the appropriate pages, your page with your personal details and your long-term visa in my case LTSVP but for you MM2H. I took all this and the UK dual taxation form from HMRC and my passport.

Go to the tax office tell them what you want, take a number and wait. The officer will go through your dates if you've met the criteria then leave the information and your passport with them. Go back in around a week to collect the residence certificate and DT form stamped.

Originally Posted by FromUKtoKL
rental from my old home, and dividends from my UK company, both of which I understand will be subject to UK tax regardless
I am doing it so I do not have to tell HMRC about savings here and can also have my pension remitted free of UK tax, earnings in the UK such as house rental are defo subject to tax there cannot be avoided.

Originally Posted by FromUKtoKL
Am I right to assume that getting a certificate of residence here doesn't then oblige you to claim *tax* residency?s
My understanding and I am not a tax accountant is that here you're not obliged to declare investment income or interest on savings (according to my bank), you do have to declare earnings in the country and capital gains from property transactions. As far as the UK is concerned you're tax resident and should declare even overseas savings etc unless you jump through the hoops to be non resident, even then they are liable to ask you to prove it again and again so proabley need to get a residence certificate every year and make a separate DT claim for each source of income.


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Old Feb 1st 2020, 12:19 am
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Default Re: Pensions - escaping UK taxation

Originally Posted by IanBlakeley
Last week actully. Note you have to register for a tax number first so do that if you have not done so.
What was involved in getting a tax number (TIN) - would you mind elaborating? And if you get one, do you have to fill out a Malaysia tax return every year even if you have no local income at all (apart from FD interest)?
I ask because banks these days usually ask for a CRS form to be completed with a valid TIN.
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Old Feb 1st 2020, 1:04 am
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Default Re: Pensions - escaping UK taxation

Originally Posted by Epicurious
What was involved in getting a tax number (TIN) - would you mind elaborating? And if you get one, do you have to fill out a Malaysia tax return every year even if you have no local income at all (apart from FD interest)?
I ask because banks these days usually ask for a CRS form to be completed with a valid TIN.
I just went to the tax office and asked, need passport for ID, can't recall which forms, it wasn't onerous I did it by myself one morning a couple of years back when my wife was away and yes then you need to do an online return annually again that is relatively simple, far more so than the HMRC version. Mine's so far been a NIL return because I have no Malaysian income. My wife got hers the day I went to first try and sort my certificate of residence, she was finished before I'd even seen the officer.
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Old Feb 1st 2020, 7:49 am
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Default Re: Pensions - escaping UK taxation

I went to the Penang tax office (HLDN) in early January as I needed a tax residency statement for the tax office in my home country (Europe, not UK). I did not previously apply for a Malaysian tax number, as I was told that this is not required if you live here on MM2H and don't have income from local sources (e.g. salary, rental income). I was called about one week later to pick up the desired tax residence statement. Attached to this was a form showing my new tax identification number. So both items were processed at the same time.
Some do's and dont's:
(*) Do make a copy of *all* pages of your passport. And bring your passport so that this copy can be verified. I was scolded for only making copies of the pages which contain visa stamps. You also have to copy the empty visa pages. Plus all other pages in your passport. Basically they need a copy of the entire booklet. In my case I was lucky: the lady was very friendly and she made copies of the missing pages using her copy machine. She did not send me away to do this myself.
(*) Do make a spreadsheet of the dates you entered into Malaysia and exited Malaysia, and use this to calculate the number of days you were in Malaysia. I wasn't sure how far back I needed to go, so I made an overview of the last three calendar years. Checking HLDN's website today I see that they have created a new form for this. This form even requires you to mention the passport page number where the entry/exit stamp is located. This was not included in my spreadsheet and nothing was said about this.
(*) Do *not* use American date notation, as my spreadsheet program did by default. I was scolded for having e.g. 12/25/2018 in the above mentioned overview where 25-12-2018 (or 25 Dec 2018) was intended.

At the tax office I was asked to fill out a request form indicating what kind of tax residence form I wanted, for which calendar year, for the tax office of which country and for what purpose. For example: in case of using this to receive a pension from a foreign pension fund they want to know the amount of money you're going to receive.

I don't know yet whether I will have to fill out a Malaysian tax form in the coming years. We will see. However, from what I know, are these forms much easier than what I was used to in my home country. I'm not worried about this.

Last edited by SushiFan; Feb 1st 2020 at 7:51 am.
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Old Feb 2nd 2020, 2:42 am
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Default Re: Pensions - escaping UK taxation

Originally Posted by SushiFan
I don't know yet whether I will have to fill out a Malaysian tax form in the coming years. We will see. However, from what I know, are these forms much easier than what I was used to in my home country. I'm not worried about this.
My understanding once you have the number you need to make a return. It is pretty simple, for sure my home government's online service could learn from the Malaysian ones clarity. I'll do mine when probably end of March.
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Old Feb 2nd 2020, 7:05 am
  #83  
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Default Re: Pensions - escaping UK taxation

Originally Posted by IanBlakeley
I just went to the tax office and asked, need passport for ID, can't recall which forms, it wasn't onerous I did it by myself one morning a couple of years back when my wife was away and yes then you need to do an online return annually again that is relatively simple, far more so than the HMRC version. Mine's so far been a NIL return because I have no Malaysian income. My wife got hers the day I went to first try and sort my certificate of residence, she was finished before I'd even seen the officer.
*note - I use the word “you” but I am not referring to any specific individual”

Exactly this, note that if you are here in Malaysia under mm2h then you are not allowed to work in Malaysia, so you must submit a nil return each year. Unless of course you have rental income from property in Malaysia.

Tax residency for Malaysia then becomes irrelevant for Malaysia. It’s only important when you are legally working / earning as non residents pay full 28% income tax on all income in Malaysia and residents pay a smaller sliding scale.

if you receive a UK income eg from pension, then check if it is taxable in the UK. Rental income in the UK is taxable in the UK but not in Malaysia as Malaysia only taxes income earned in Malaysia. Pension income varies - eg govt pensions are taxable, private pensions, particularly if paid to a third party location such a jersey are not taxable in the UK. You really need a UK tax advisor to sort this one out for you.

UK has some quite stringent residency rules that can be as short as I think 10 days - you need to check the habitual residency rules.
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Old Feb 2nd 2020, 7:51 am
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Default Re: Pensions - escaping UK taxation

Originally Posted by IanBlakeley
My understanding once you have the number you need to make a return. It is pretty simple, for sure my home government's online service could learn from the Malaysian ones clarity. I'll do mine when probably end of March.
Do you receive a message or reminder from LHDN that you have to make a return? Or is this something you need to remember yourself?
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Old Feb 2nd 2020, 11:20 am
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Default Re: Pensions - escaping UK taxation

Originally Posted by SushiFan
Do you receive a message or reminder from LHDN that you have to make a return? Or is this something you need to remember yourself?
Sorry I can't recall, I think it Jan to Jan tax year.
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Old Feb 3rd 2020, 11:18 am
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Default Re: Pensions - escaping UK taxation

Originally Posted by SushiFan
Do you receive a message or reminder from LHDN that you have to make a return? Or is this something you need to remember yourself?
nope it’s all on you and needs to be done before end April
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Old Feb 4th 2020, 11:46 am
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Default Re: Pensions - escaping UK taxation

Originally Posted by OriginalSunshine
nope it’s all on you and needs to be done before end April
Thank you; very helpful.
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Old Feb 28th 2020, 6:36 am
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Default Re: Pensions - escaping UK taxation

Sorry for coming back to this so late, but thank you all (and Ian in particular!) for the info following my question - all very helpful!

To add - I’ve been talking with my accountant back in the UK, and his view is that I can make myself non-tax resident in the UK, but as far as the UK tax authorities are concerned, there is no (immediate) need to be tax resident anywhere else. I could be travelling, or working on a cruise ship, for example. I dare say there will come a time (certainly if/when I buy a property in Malaysia, but perhaps sooner) when I will need to make myself Malaysia-tax-resident, but it seems there’s no requirement to do that in order to not be tax-resident in the UK. I assume that holding off as long as possible would at least avoid the need to file a nil tax return every year. I imagine some complexity might arise should I ever have any income from a third country, but I’ll cross that bridge if/when I come to it!
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