Inheritance Tax Act

Keywords: Mazars, Thailand, Tax, Inheritance Tax Act, Immovable Property, Securities, Vehicles, Money, Descendent

03 September 2015

• The act will not apply to:

-  an inheritance where the owner dies before the date that the act is effective; and

-  an inheritance received by the spouse of the owner.

• The following recipients of an inheritance shall be liable to pay the tax:

-  A person who has Thai nationality. This includes: (1) a legal entity registered in Thailand or under Thai law; (2) a legal entity in which shareholders of Thai nationality hold more than 50% of the share capital at the time the legal entity has the right to receive an inheritance; and (3) a legal entity where more than 50% of those who have managing power have Thai nationality. This applies regardless of where the property which is the inheritance is situated.

-  A person who does not have Thai nationality, but who has residence in Thailand under the immigration law, regardless of where the property which is the inheritance is situated.

-  A person who does not have Thai nationality, but who is receiving an inheritance of property situated in Thailand.

• The following persons are exempt from the tax:

-  A person who receives the inheritance from the owner of the inheritance, where the owner has expressed his intention that the inheritance to be used for the purposes of religion or education, or in the public interest.

- A legal entity and governmental organization for religious, educational, or public purposes.

- A person or international organization to which Thailand has an obligation under the United Nations or under international law, or in accordance with a treaty or mutual agreement between Thailand and such country.

• The following assets, received as an inheritance, are subject to the tax:

(1) immovable property;

(2) securities under the law governing securities and the securities market;

(3) money that has been deposited, or other forms of money, where the owner of the inheritance has the right to withdraw it or claim it from the financial institution or person who accepted the deposit;

(4) a registered vehicle; and

(5) other assets as specified by a Royal Decree.

• If the inheritance received has a value exceeding 100 million baht, no matter where received, or if received all at once or over a period of time, only that portion which exceeds the value of 100 million baht shall be taxed. For the purposes of this inheritance tax, the value of the inheritance subject to tax means the value of the asset received as an inheritance offset by the liabilities inherited.

• The tax rate is 10% of the value of the inheritance subject to tax. However, if the recipient is a descendant or surviving older relative of the owner of the inheritance, the rate is reduced to 5%.