Law

6th September 2010 Pension Foreign Exchange Report QROPS & QNUPS

Submitted by qrops on Mon, 06/Sep/2010

We continue our daily look at factors affecting currencies allowing some insight into market conditions affecting exchange rates. Cash and income timing for UK Pensions and QROPS should be considered to maximise the Pension, QROPS and investment income and benefits taken.

Investment market volatility and currency exchange remains a challenge. Things are still very volatile and we are in unique global influencing territory. In conjunction with investment returns, currency exchange continues to concern many expats with UK Pensions, QROPS and now QNUPS.

Friday saw yet more weak UK data after the British service sector reported its slowest growth since April 2009; the actual figure came in at 51.3 against expectations of 52.8 and lower then the last reported figure of 53.1.

Although the figure is still above 50 which shows growth overall, it does highlight concern the UK economy may slip back into recession and that the Bank of England may need to resort to further quantitative easing which has affected sterling negatively in the past. The survey also reported a fall in hiring new employees as companies seemed concerned how the public spending cuts and slowdown to the global recovery would affect business.

Sterling started the day making gains across the board against majority of its trading pairs but after the release sterling turned on its back foot as it raised continued concerns over the economic growth for the remainder of the year. These losses seemed fairly limited as the pound seemed to keep recovering before again retracing its forward steps.

Sterling hit an early session high of €1.2048 before retracing to hit the low of €1.1983 against the dollar sterling hit a day’s high of $1.5457 against the earlier low of $1.5391.

There was further bad news for the UK on Friday, with figures showing new construction orders tumbled 14% in the second quarter and dropped 9% on the year, their first decline in more than a year.

Retail sales were released in the euro zone which showed their month on month figure slightly down at 0.1% against the previous release of 0.2%, the year on year figure came in at 1.1% down from the previous release of 1.2% but certainly better than the expected figure of 0.6%.

In the US employment data was released with Nonfarm payrolls coming in better than expected for July at a revised figure of -54k against the previous figure of -131k. This is the third month in a row that jobs have been lost in the US. However the private sector created 67k jobs which exceeded expectations. The rate of unemployment now stands at 9.6% against the last release of 9.5% but many analysts feel that the high level of unemployment is undermining the US economic recovery. This was followed by non manufacturing index which fell to 51.5 down from 54.3 but yet still showing growth. Recent economic data has raised concerns about the strength of the US economy’s recovery and thus shining the spotlight of the global recovery.

Elsewhere the euro hit a two week high against the dollar reaching a day’s high of €1.2888 against the earlier low of €1.2809.

Gerard Associates Ltd advises expats and people considering living abroad on the technical and currency options available for Pensions, QROPS, QNUPS and investments in a clear format allowing all customers to make an informed choice. Our service encompasses Pensions, investments, currency exchange and guidance on taxation in most popular ‘sunnier’ climates. This with the re-assurance and security of UK authorised and regulated advice – essential tools for your security.

20th August 2010 Pension Foreign Exchange Report QROPS & QNUPS

Submitted by qrops on Fri, 20/Aug/2010

We continue our daily look at factors affecting currencies allowing some insight into market conditions affecting exchange rates. Cash and income timing for UK Pensions and QROPS should be considered to maximise the Pension, QROPS and investment income and benefits taken.  

Investment market volatility and currency exchange remains a challenge. Things are still very volatile and we are in unique global influencing territory.  In conjunction with investment returns, currency exchange continues to concern many expats with UK Pensions, QROPS and now QNUPS.

Sterling reversed early losses to jump more than a cent against the dollar and half a cent versus the euro yesterday after unexpected strong UK retail sales data, which has now raised hopes and fuelled sentiment that the British economy can maintain its momentum in the third quarter.

"The retail sales data were way stronger than expected and genuinely good numbers. There weren't any 'funny' factors which boosted the reading," said a currency strategist.

The Office for National Statistics said retail sales had risen by 1.1% on the month, the strongest growth since February and had by far exceeded analyst forecasts of a 0.4% rise.

On the year, retail sales rose 1.3% in volume terms, again above forecasts of a 0.6% rise.

These better than expected figures were also supported by a rise in factory orders to a two year high which now bodes well for the recovery after exceptionally strong second-quarter growth and alleviated concerns that the economy would eventually lose steam.

Despite this uplifting data, the majority of economists still believe the UK economy will continue to deteriorate in 2011, and the Bank of England reported a further decline in business and mortgage lending as well as the weakest annual broad money growth in 27 years.

Other data released yesterday in the UK by the Bank of England, showed money supply grew at the slowest pace since at least 1983 and bank lending contracted for a ninth month, suggesting a credit squeeze may be becoming more entrenched.

M4, the broadest measure of money supply, expanded 2.3% in July from a year earlier. That’s the lowest rate since monthly date started. The number of mortgage loans granted by a six bank lending panel fell to 47,000 from 48,000 in June, a 14-month low. Loans to small and medium sized businesses contracted 2% on the year.

Figures from the National Statistics showed Public Sector Net Borrowing also fell in July as corporation tax receipts bounced back sharply from last year.

Public Sector Net Borrowing came in at £3.1bn in July, down from £5.5bn in the same month and below the expected figure of £4 billion. The data suggest public sector deficits have peaked and are slowly moving in a downward trend.

Important figures in the US yesterday showed the number of Americans filing initial claims for jobless benefits increased by 12,000 last week, pushing the total number above the half million mark. It's the first time since November that initial claims have been above the

500,000 mark. It was also the fourth increase in five weeks and shocked analysts, who had anticipated a reasonable drop.

Initial jobless claims have declined steadily for the past year from a peak of 651,000 in March

2009 as employers reduced the number of redundancies and began hiring. Economists were looking for the number to fall below 425,000 and stay there before assuming that the economy was actively creating new jobs. 

Gerard Associates Ltd advises expats and people considering living abroad on the technical and currency options available for Pensions, QROPS, QNUPS and investments in a clear format allowing all customers to make an informed choice. Our service encompasses QROPS Pensions, investments, currency exchange and guidance on taxation in most popular ‘sunnier’ climates.   This with the re-assurance and security of UK authorised and regulated advice – essential tools for your security.

Tax Facts - Thailand

Personal Income Tax or PIT is a direct tax which is levied on the taxable income of a ‘person’. A ‘person’ can mean; an individual, a non-juristic body of persons, an undivided estate, a deceased person or an ordinary partnership.

In general terms, a person liable to Personal Income Tax must compute their tax liability, file tax returns and pay tax (if any is owed) on a calendar year basis. There are two types of taxpayer, these being ‘resident’ and ‘non-resident’. You would be classed as a ‘resident’ in Thailand if you were to reside there for 180 or more days in any tax (calendar) year. A resident of Thailand is liable to pay tax on income from sources in Thailand on a cash basis, regardless of where the money is paid, as well as on the portion of income from foreign sources that is brought into Thailand in the same year that the foreign income is derived. A non-resident, however, is only liable for Personal Income Tax on income from sources in Thailand.

Income chargeable to Personal Income Tax is classed as ‘assessable income’. This term covers income both in cash and in kind. This means that any benefits provided by an employer or other persons, such as rent free housing or the amount of tax paid by the employer on behalf of the employee, are also treated as assessable income on the employee for the purposes of Personal Income Tax.

Assessable income is split into eight categories. Certain allowances and deductions can be offset against assessable income in order to calculate taxable income. Taxpayers will make any deductions from assessable income before the allowances are granted.

The following table details deductions permitted for the calculation of Personal Income Tax in Thailand:

 

Type of income

Deductions
  1. Income from employment.

40% but not exceeding Baht 60,000

  1. Income from hire work.

40% but not exceeding Baht 60,000
  1. Income received from copyright.

40% but not exceeding Baht 60,000
  1. Income in the nature of interest, dividend or capital gain.

-
  1. Income from letting out of property on hire:

-

5.1.  Building and Wharves.

30%

5.2.  Agricultural land.

20%

5.3.  All other types of land.

15%

5.4.  Vehicles.

30%

5.5.  Any other type of property.

10%
  1. Income from professional services.

30% except for the medical profession where 60% is allowed.
  1. Income derived by contract work or whereby the contractor provides essential materials besides tools.

Actual expense or 70%
  1. Income derived from business, commerce, agriculture, industry, transport, or any other activities not specified earlier.

Actual expense or 40% to 85% depending on the types of income

 

 

The following table details allowances permitted for the calculation of Personal Income Tax:

 

 

Type of allowances

Amount

Personal allowance for a single tax-payer.

Baht 30,000 for the taxpayer.

Personal allowance for non-juristic partnership or body of persons.

Baht 30,000 for each partner but not exceeding Baht 60,000 in total.

Spouse allowance (legally married).

Baht 30,000.

Child allowance (child under 25 years of age and studying at educational institution, or a minor, or an adjusted incompetent or quasi-incompetent person).

Baht 15,000 each (limited to 3 children).

Education (additional allowance for child studying in educational institution in Thailand).

Baht 2,000 each child (limited to 3 children).

Life insurance premium paid by taxpayer or spouse.

Amount actually paid but not exceeding Baht 100,000 each.

Approved provident fund contributions and retired mutual fund.

Maximum allowance (exemption) of  Baht 500,000 but not exceeding 15% of income.

Long term equity fund.

Maximum allowance (exemption) of Baht 500,000 but not exceeding 15% of income.

Home mortgage interest.

Amount actually paid but not exceeding Baht 100,000.

Social security contributions.

Amount actually paid.

Parent allowance (parents of either taxpayer and/or legal spouse over 60 years of age with income less than 30,000 Baht)

Baht 30,000 each parent

Undivided estate.

Baht 30,000

Disability allowance (cost of caring for disabled persons).

Baht 60,000

Charitable contributions.

Amount actually donated but not exceeding 10% of income after standard deductions and allowances.

 

 

The tax rates fir resident and non-resident individuals (2008 and subsequent yeaqrs) are as follows:

 

Taxable income (Baht)

Tax rate %

Tax amount

Accumulated tax

0 – 150,000

Exempt

-           

-           

150001 – 500,000

10

35,000

35,000

500,001 – 1,000,000

20

100,000

135,000

1,000,001 – 4,000,000

30

900,000

1,035,000

4,000,001 and over

37

-           

-           

 

Persons over age 65 get an exemption on the first Baht 190,000 of taxable income instead of the normal Baht 150,000 threshold.

Pension Foreign Exchange Report QROPS & QNUPS

Submitted by qrops on Tue, 08/Jun/2010

For the Eurozone expat the €uro spot rates hitting €1.20+ to the £1 brings a welcome boost to currency exchange. Investment market volatility and currency exchange remains a challenge. Things are still very volatile and we are in unique global influencing territory.  In conjunction with investment returns, currency exchange continues to concern many expats with UK Pensions, QROPS and now QNUPS.  

Continuing our daily look at factors affecting currencies allows some insight into market conditions affecting exchange rates. Cash and income timing for UK Pensions and QROPS should be considered to maximise the Pension, QROPS and investment income and benefits taken.

The pound hit an 18 month high against the euro on Monday after reports were released about a restructuring of German bund and gilts, worrying investors and intensifying the concerns over the Eurozone and its single currency.

As well as suffering against the pound, the euro fell to a 4 year low against the US dollar after a Hungarian official said in a loose lipped statement that Hungary had only a slim chance of avoiding a Greek-style debt crisis. However, much criticism came about the highly negative way in which he spoke about Greece and the Eurozone economies as if no-one was listening.

Weaker than expected US employment data on Friday forced investors to sell off their risky assets, combined with a new European Union member facing problems, euros were sold in favour of the dollar.

At 11.15 am in London, the euro made back some ground against the dollar and traded at $1.1980, however it struggled to maintain this level and spent most of yesterday in the early $1.19’s.

At 3.30pm the pound reached a session high of €1.2179 against the euro, we have not seen levels this high since early November 2008, from when the pound had maintained levels around the €1.25 for most of the year before collapsing and heading down towards parity in late 2008.

Technical traders have suggested that the next significant level to watch is around the €1.2200 to €1.2240 mark, representing the October 2008 high and the 50 percent retracement of the 2007- 2008 downtrend.

Against the dollar the pound remained within limits seen over the last few weeks, making around 0.6% moving to $1.4555 after having slipped to a low of $1.4388 early in the session as a result of investors favouring less risky assets after Friday’s data and the Hungarian comments.

Traders said market speculation that Prudential would have to buy back sterling following the collapse of its bid for AIG's Asian arm was helping the pound to bounce on the day. Prudential were said to have put in a series of currency hedges, selling sterling to buy dollars, in anticipation of the deal going through.

British PM David Cameron said in press conference that the UK economy was in a much worse state than was first expected and “painful times lie ahead for the country”

On a brighter note, whilst the new government are not trying to paint a pretty picture, investors appear to be at ease with their measures and their commitment to tackling the debt problems.

For the time being this might be supportive for the pound whilst the recovery continues.

There was some positive news for the UK economy as British manufacturing output and orders grew at their fastest pace in 15 years in the second quarter. However, the Engineering Employers Federation said worries about fiscal tightening and the Eurozone economy have clouded expectations.

Looking ahead, trade data for April is published today, while the Bank of England's Monetary Policy Committee is widely expected to keep interest rates at 0.5% and continue the pause in its Asset Purchase Programme.

Gerard Associates Ltd advises expats and people considering living abroad on the technical and currency options available for Pensions, QROPS, QNUPS and investments in a clear format allowing all customers to make an informed choice. Our service encompasses Pensions, investments, currency exchange and guidance on taxation in most popular ‘sunnier’ climates.   This with the re-assurance and security of UK authorised and regulated advice – essential tools to avoid the offshore casino.

 

Foreign Exchange Report QROPS

Submitted by qrops on Fri, 21/May/2010

Things are still volatile and we are in unique territory.  In conjunction with investment returns, currency exchange continues to concern many expats with UK Pensions and QROPS.  

Continuing our daily look at factors affecting currencies allows some insight into market conditions affecting exchange rates. Cash and income timing for UK Pensions and QROPS should be considered to maximise the Pension, QROPS and investment income and benefits taken.

Sterling dropped by one percent against the euro and traded around a 14 month low against the dollar on Thursday due to investors being nervous about how policy makers will respond to the Euro zone debt crisis. Investors also continued to be nervous regarding news on potential spending cuts and are waiting to see of the emergency budget from George Osbourse will help to strengthen the pound or add further pressure.

 

The pound lost all the gains made on Wednesday against the dollar and extended fresh lows 14 month lows at 1.4225 after the release of weaker US leading indicators.

 

UK retail sales were released at 9.30am yesterday and the pound did little to react to the modest increase. Sales grew by 0.3% in April which was a slight improvement on what was expected. The office for National Statistics said clothing and shoe stores had seen strong growth; food sales were unchanged from the previous month.

 

"Although these figures were marginally better than expected, they confirm the broad picture of a fragile recovery that is still facing many obstacles," said David Kern, chief economist at the British Chambers of Commerce. It’s worth noting that April’s sales were up by 1.8% compared with April last year, this was also the case for March.

 

According to Howard Archer, chief UK economist at HIS Global Insight households still face “very challenging” times ahead with the possibility of tax rise and high unemployment as the new government seeks to improve public finances.

 

Elsewhere across the pond the stock market continued to fall sharply due to the problems in Euro land and disappointing U.S employment news. The number of Americans claiming for unemployment benefits rose unexpectedly last week, the largest amount in three months with an increase of 25,000 new applications, increasing the total number to 471,000. 

 

This was the first increase in five weeks and the biggest jump since February as many economists predicted a drop of around 4,000. On a brighter note employers are starting to hire again as payrolls rose last month by 290,000, unfortunately this is not the level to make a dent in the unemployment figures.

 

Gerard Associates Ltd advises expats and people considering living abroad on the options available for Pensions, QROPS and investments in a clear format allowing all customers to make an informed choice. Our service encompasses Pensions, investments, currency exchange and guidance on taxation in most popular ‘sunnier’ climates.   This with the re-assurance and security of UK authorised and regulated advice.

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