Thailand recently finalised its new inheritance tax law, and if you're lucky enough to have amassed a fortune of over 100 million Baht (approx $3M), in the Kingdom, then your estate will be unlucky enough to be caught in Thailand's inheritance tax threshold.
But what if your wife goes first? Do you benefit from her estate? And what of single guys and girls who hold assets such as condos and cars in Thailand, who gets their greedy paws on those when you buy your farm in the sky?
Yup, not many people know where they stand on such matters. So in this post I'll explore not just the new inheritance tax law, but also what happens to your assets if you die in Thailand, and where you stand to inherit if your wife or partner goes before you do.
Image credit: Newsish.com
Who Pays Inheritance Tax in Thailand?
Unless you're sitting on $3m of money earned in Thailand, then your assets won't be subject to IHT. If you are, your heirs will pay 5 or 10 percent, depending on their relationship to you, on anything over that amount
The law states:
The inheritance tax is 5 per cent for ascendants or descendants and 10 per cent for others. It is levied on assets worth above Bt100 million.
IHT is levied on heirs who are either individuals or Thai juristic persons. It is also applied to non-Thai nationals who are resident in Thailand according to the immigration law, and non-Thais inheriting assets located in Thailand.
This means that your Thai wife, or full or half Thai child, will pay IHT on your estate if it meets the threshold.
But really, who has this kind of wealth in Thailand, you might ask. Many more than people tend to think. Wealthy Thais are usually far wealthier than their European and American counterparts, and as such the government expects to collect 3 Billion Baht per year at the 5 percent rate.
Gift / Personal Income Exemptions
Like most countries, to counter possible avoidance of inheritance tax, a gift tax was also introduced by way of amending the types of tax-exempt income in the Thai Revenue Code.
The types of income exempt from personal income tax include income derived from maintenance, income derived under moral obligation, inheritance, or a gift received in a ceremony or on other occasions in accordance with established custom.
The law will only exempt the following types of income from personal income tax:
The portion of inheritance income not exceeding 100 million Baht under Section 12 of the Inheritance Tax Act.
Income derived from the transfer of ownership or possessory right in an immovable property without consideration by the parent to a legitimate, non-adopted child, only for the portion not exceeding 20 million Baht per tax year.
Income derived from maintenance or a gift from ascendants, descendants or a spouse, only for the portion not exceeding 20 million Baht per tax year.
Income derived from maintenance under moral purposes, or a gift received in a ceremony or on occasions in accordance with custom and tradition from persons who are not ascendants, descendants or a spouse, only for the portion not exceeding 10 million Baht per tax year.
Income from gifts received for use for religious, educational or public purposes according to the rules and conditions under a ministerial regulation (yet to be issued).
Yes, I'm sure you can see how a bunch of rich folks will find loopholes here and pay diddly squat. At which point the threshold will no doubt be lowered to scoop up those on moderate incomes.
Thanks to Benjamas Kullakattimas, Head of Tax, KPMG Thailand, for providing the English interpretations of the above list.
OK, But Aside From The Legal Jargon, What Happens to My Assets by Default When I Die in Thailand?
Single guys and unmarried guys in relationships might wonder what will become of their condo and Honda click should they bite the bullet. Well the hard and fast truth is, if you have assets in Thailand, you need to make a will.
You should have a will for both your assets in Thailand and any that you hold in your home country. You see, what happens when you die in Thailand is that a government officer requests a copy of a will either from the family or the lawyer of the deceased. So you can't expect the will filed in your home country to cover any property in Thailand. Failing to have a will could result in lengthy, costly probate.
Without a will in Thailand, these assets are the property of your Thai estate and would be subject to Thai inheritance tax if they totalled over the 100 million Baht mark.
For the married, your assets are distributed according to Thai law, and this means that family members are given priority. Half of the estate will automatically be passed to your wife and the rest divided first among children, then to surviving parents, then full-blood brothers and sisters, then half-blood brothers and sisters, then grandparents and finally aunts and uncles.
If you should die with no will, and there is no family or said heirs, then the state has the right to take all your property and sell it as it sees fit. Gasp!
If you have accumulated assets in Thailand that you don't want to end up in the state's purse, then you really should consider making a will in your home country that includes these assets so that your relatives are aware of what you have and who is heir to them, and of course filing a will in Thailand too.
In order to register a will in Thailand and have an executor appointed, you must go to a provincial court. The executor will then get the court’s authority to dispose of the person’s assets in accord with their will. Of course a Thai lawyer can arrange this for you.
Will I Inherit My Wife's Fortune?
If she leaves it to you in her will, then yes. But please do read below about land and property. If she doesn't leave a will, you better get in line because, see that list below, that's you at #7 – bottom of the queue:
In Thailand there are 6 classes of statutory heirs and they are entitled to inherit in the following order:
- Descendants
- Parents
- Brothers and sisters of full blood
- Brothers and sisters of half blood
- Grandparents
- Uncles and aunts
- The surviving spouse is a statutory heir, subject to the special provisions of Section 1635 Civil and Commercial Code.
You wife might choose to leave you money, gold, or perhaps her car. But if you expect to inherit these things you'd do well to encourage her to make a will that stipulates exactly what she wants to leave you, and for her to instruct her family of her wishes so there is no dispute.
Family disputes are common in this regard. If family members seize assets after a death, the process for a foreigner getting them back, even with the presence of a will, is a very difficult one. This is certainly something you should think about if you have a child together, because no doubt you'll want your child to inherit your wife's assets.
Can I Inherit My Wife's Land?
Believe it or not, you can inherit your wife's land. If she doesn't make a will that says otherwise, it will be passed to you. But there is a catch, and a pretty huge one at that:
You cannot register ownership of the land because you will not be given permission. You must dispose of the land within a reasonable period (up to 1 year) to a Thai national. If you fail to dispose of the land, the Director-General of the Land Department is authorised to dispose of the land and retain a fee of 5% of the sale price before any deductions or taxes.
Yes, you're probably thinking what I'm thinking. No one is going to give you a decent price for that land once word gets out that your wife has died and you need to offload this land within a year.
Oh, and by the way, if you're living in your wife's house, consider that Thai law sees a house as “always having an interest in the land”, so I'd bag your bags within a year before your mother-in-law kicks you out, hehe.
What About Inheriting My Wife's Condo?
It's almost the same as the deal with land: A foreigner who acquires a condominium unit by inheritance, either as statutory heir or inheritor under will, shall acquire ownership, however, unless the foreigner qualifies for ownership under Section 19 of the Condominium Act, it is required by law that the foreigner shall dispose of the unit within 1 year from the date of acquisition.
The reality is that most foreigners wouldn't qualify. Being retired in Thailand just isn't enough. See below for who qualifies:
Image Source: samuiforsale.com/family-law/marriage-property-regime.html
In Summary
The reality is, unless you're pretty wealthy, your estate probably won't meet the threshold for Thailand's inheritance tax. There aren't that many foreigners stupid enough to keep that much wealth in Thailand anyway. But you may well have assets you want to make sure get passed to your wife or your kids, so making a will is a good idea.
The same goes for single people who've accumulated wealth in Thailand. You should make a will back home and in Thailand to cover the event of your death.
Lastly, there's a number of foreigners living in Thailand who live in their wife's house, drive their wife's car, and to a degree live off their wife's income. If you fall into this category then your should definitely speak to your wife about what will happen to her assets if she dies before you, because these will default to her family, in line with the statutory order of heirs outlined earlier in this post.
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Disclaimer: I am not a lawyer, and therefore not qualified to give legal advice. This post simply represents my personal interpretation of the law. If you want to make a will, or want legal advice on any matter in Thailand, please contact a qualified lawyer.
Ron says
My situation seems very simple … 3 years after our mariage in Thailand I (foreigner) bought a condo on my name only (my spouse signed an agreement) … Now, 12 years later I want to offer (= zero baht) my condo to my wife – no kids – Is it possible ? Expensive ?
Thx
Jul 01, 2017 at 5:27 pm
TheThailandLife says
You mean transfer it to her for free? As far as I know doing so will not incur any gift tax because the property is likely not worth more than 20m Baht. Don’t quote me on this, but I think there will be a transfer tax fee of 2% of the value of the property. She would not pay stamp duty because the price is zero Baht.
Jul 01, 2017 at 8:59 pm
kelvin says
offer?
under Thai Simsod lot law whatever you acquire during marriage is 50 % owned by wife
so I assume she signed and agreement to state she did not want her 50%
also did you buy under the Thai 51% in the building ratio – hence she needed to sign and now if you transfer to her then this % will go back into the condo Thai ratio?
If I am correct in understanding that you want to transfer to wife then it will attract all the fees and transfers – just like a normal sale and based on the Land Office estimate of the value – whereas if you were dead then she would inherit and the fees would be less.
Make a Will – keep the condo as is as this will be cheaper
Jul 02, 2017 at 2:06 pm
karma says
what happens if there is a Will but French spouse (husband) passed away but has assets in Thailand? Wife and son are Singaporean. If Will states all assets to be given to wife, is she eligible or the deceased family will inherit the assets?
Please clarify.
thanks
Jun 04, 2017 at 7:14 pm
TheThailandLife says
If his assets held in Thailand are detailed in his Will to be passed to his Singaporean wife and son then the first question is: did he file a copy of his Will in Thailand (in Thai) with a Thai probate lawyer? If the answer is yes, then the Wife will simply need to make an appointment with the lawyer to proceed with the instructions. If the answer is no, the process could be a long one, particularly if there are any “other” persons in his life living in Thailand who feel they have a right to some of the estate. In this case, get a copy of the Will and find a reputable lawyer immediately to represent “you”.
Jun 05, 2017 at 3:50 pm
thai888 says
Wife and son are non residents and depending on the assets there will be different ways to go.
Are they legally married?
If the Will is valid – to prove this the Will and the Executor must read must go to court to prove this. Hence a lawyer is mandatory -no way around this.
If the Will was not in Thai it will need to be translated.
If the son is under 18 years old then he will need a controller of property until he is 18.
If there is property owned then it will have to be sold within 12 months unless it is in a company name then we simply transfer the Directorship over.
Money in the bank will nee a court order unless there is an ATM card and PIN number handy.
Cars and bikes – depends how old they are – might be able to sell or usually if old
I am professional with International Probate- contact me
regards Kelvin
Jun 05, 2017 at 4:08 pm
thai888 says
amend age to 20 years old
Jun 05, 2017 at 4:19 pm
KB says
another post mentioned giving away Thai citizenship. However this person was not born in Thailand. The poster says he is eligible to apply. Yes he can but having 50% Thai blood does not give him any special treatment. See here:Article 23 of the 2008 Nationality Act reversed the 1972 Act, restoring citizenship to those who had it before, and allowing people born in Thailand before 1992 to apply for Thai citizenship anew. However, applicants have reported various difficulties in getting government officials to process their applications. Following the Act’s passage, one of the first people to gain citizenship under Article 23 was Fongchan Suksaneh, a child of American missionaries to the Mlabri people who was born in Chiang Mai Province.[6][8] Children neither of whose parents are citizens and at least one of whose parents is an illegal alien remain not entitled to jus soli citizenship.[1] Furthermore, someone who has Thai citizenship by sole virtue of jus soli may still lose Thai citizenship under various conditions of the 2008 Act (such as living abroad) which do not apply to people who have Thai citizenship by virtue of jus sanguinis.[9] In 2013, the Ministry of Interior proposed new immigration regulations, based on Section 7 of the 2008 Nationality Act, to declare children who did not gain Thai citizenship at birth as illegal immigrants and have them deported.[10]
Jun 15, 2016 at 10:22 am
TheThailandLife says
Yes, I read the same. This looks like it was taken from the same Wikipedia article. My line, “Persons born anywhere in the world to at least one parent with Thai citizenship themselves are entitled to Thai citizenship at birth” was from the same article.
Jun 15, 2016 at 10:56 am
Haruto says
I have one question and if my parent were living in Thailand and my father was an American and my mother was Thai and I myself was half US/Thai. But I’ve decided to be American and throw away my Thai Nationality. If my parents dies from something, will I be able to inherit their stuff or what will happen.
(As a case, not real)
Thank you for answering.
Jun 14, 2016 at 1:57 pm
TheThailandLife says
In this situation, as long as your parents have a Will that stipulates that their estate will be left to you if they die, it would go to you.
Jun 14, 2016 at 2:00 pm
KB says
I have a question
you say you are half Thai and half US – this does not matter as it is where you were born.
ie if you were born in Thailand then you have rights. If you were born in USA of Thai and American parent then you are a US Citizen – not Thai and therefore you have no nationality to throw away.
You can inherit your parents assets by way of a Will.
If no Will then the Laws of succession apply.
If a house is involved or land or condominium then there could be an issue if you are not a Thai national. So think carefully about giving away your rights.
Jun 14, 2016 at 2:19 pm
TheThailandLife says
Even if born in the US, he is still eligible for Thai citizenship because of having a Thai parent.
Persons born anywhere in the world to at least one parent with Thai citizenship themselves are entitled to Thai citizenship at birth.
Jun 14, 2016 at 9:26 pm
KB says
yes renting is OK
if you dont want any assets in Thailand
but with most things the longer you spend in a country the more assets you accrue
ie money in the bank for your retirement visa extension of stay
bike car cash jewelry – it all adds up.
the extended Thai family cant get anything if a proper Will is drawn up. They are not even entitled to one single baht if not listed as beneficiaries.
so get a Will drawn up as its not expensive compared to how much you could loose out to the Government if you dont have one.
May 25, 2016 at 1:01 pm
Sue Jones says
My Dad moved to Thailand from the UK about 8 years ago, where he married a thai woman. He’s almost disregarded having my brother and I over here, apart from this last couple of weeks, when my brother passed away suddenly, leaving a house and a large Death in Service benefit – he doesn’t have any children or partner, so from what I gather his estate goes to my Dad.
My Dad jumped on a plane straight away and it’s quite clear he’s done so to ensure he gets all the monies. He’s also bragging that he’ll be taking all monies back to thailand and when something happens to him, everything will go to his wife.
I’m not trying to be a gold digger, but am struggling to understand how he gets to have everything from my brother and then his wife then gets everything, when in fact, my mum when she was alive worked hard for everything and would have wanted my to recieve inheritance too.
Are there any loop holes, is there anyway I would be able to make a claim on my dads estate in the event of his death. I’m not worried about what he has with his wife, but do feel it’s very unjust that she would benefit from everything.
May 24, 2016 at 4:38 am
TheThailandLife says
I have no idea what claim you might have, but I assume that a lawyer would seek an injunction for you on the basis that you should have a claim. What that basis would be I don’t know. It would be worth paying the hourly fee to speak to a probate lawyer about this.
May 24, 2016 at 4:48 pm
kelvin says
In some cases where the Executor is sick, old or overseas and it would be disruptive then the court may allow power of attorney for another person in Thailand to act in their place. However, it is purely at the discretion of the courts.
Most times the Executor or the beneficiary under the succession laws must make an appearance in court.
Also, say for example a property needs to be sold the the Land Office would want the beneficiary to sign at the Land Office.
Its complicated and thats why its best to let the Lawyers handle it ( as much as people hate Lawyers).
Plus all is in Thai and need official translation, in many cases by the Department of Foreign Affairs.
Feb 03, 2016 at 5:53 pm
kelvin says
a good over view of making a Will. However, from my experience and from statistics it shows that most people do not make a Will. Crazy as it sounds its true. This omission causes a lot of stress and delays as the remaining partner may not have sufficient funds to last until the court approves either dying intestate (without a Will) and dying with a Will.
It normally takes up to 3 months to get to court and another month to receive challenges to the Will or the Executor.
In 100% of cases the Executor after finding out they need to go to court and then run around winding up the estate resign. This causes more delays as the new Executor must then get Power of Attorney from the old Executor.
Another issue is that the partner can inherit a condo however if they are overseas then they are non resident and do not have a visa and so have to sell the property within a year.
Children under the age of 20 if they inherit will need a controller or property (COP) to look after the estate until the child reaches age. However this COP can draw funds to see to the child’s schooling and upkeep.
And the assets in most cases need to be liquidated and this takes time.
Feb 01, 2016 at 11:32 am
TheThailandLife says
Thanks for this information Kelvin, it definitely adds value to the post and brings up some key points. This is particularly interesting: “Children under the age of 20 if they inherit will need a controller or property (COP) to look after the estate until the child reaches age. However this COP can draw funds to see to the child’s schooling and upkeep.” I imagine this could be a real problem if a child is very young as the inheritance could be unscrupulously spent on “upkeep” before the child gets to see any money when he or she comes of age.
Feb 02, 2016 at 1:53 pm
arthurb says
Another reason not to buy any assets here. Rent everything and leave your valuables at home with a will that your family knows about. The system here is not set up to make you richer, and that’s putting it mildly. I’ve known a couple of guys who passed away here and their families had a lot of trouble getting what was rightfully theirs from the said gentlemen’s greedy extended Thai families.
Dec 22, 2015 at 1:16 am
TheThailandLife says
I agree in part Arthur. But I’m pretty sure if all one’s affairs are in order, e.g. a lawyer is instructed in Thailand and in your home country as to what you own in Thailand and who should inherit these assets, it should be straight forward enough. What is a concern, though, is the regularly shifting political situation and the subsequent changes in law that come with this. This may at some point affect the way inheritance works of foreigners’ assets in Thailand.
Dec 22, 2015 at 2:06 am