Which assets are subjected to inheritance tax?

First of all, let’s better understand inheritance tax, as some may not know what it is and why we have to pay a lot of expenses for it.

There has been an ongoing/unresolved debate about the collection of inheritance tax and therefore the law for inheritance tax collection was issued. Inheritance tax is another income that helps reduce inequality in Thailand for those who are less fortunate, as well as help spread the tax burden. The tax will also help the government to earn more income as well as making use of national resources. The law is effective from 1st February 2016. The inheritance tax is collected directly from the beneficiary, which is the heir as stated in the will (if the person doesn’t have the Thai Nationality, but the asset is in Thailand, the tax still applies). So, if you’re the person responsible for paying the tax, how much do we have to pay? If your parent’s wealth of inherited assets is in excess of 100 million baht, the tax in excess of 100 million baht will be taxed at the following rates:

1. For inheritors as descendants or descendants must pay 5% of the inheritance value.
2. For other cases like the person receiving the will, must pay 10% of the value of the inheritance.

There are a few exceptions like for spouses or when the will is stated to be for the benefits of the religious affairs, educational affairs, public interest affairs, government agencies or international agencies – if the will is for these matters then the tax is exempted.

Let’s have a look at the assets that are subjected to tax once we have received it.

1. Real estate such as land and buildings
2. Securities according to the Securities and Exchange Act, such as stocks, debentures, investment units, debt instruments and various derivatives
3. Deposits or any other forms of money that have the same characteristics
4. Vehicles that has been registered such as cars, boats and motorbikes
5. Additional financial assets (if any) as required by law in the future.

The inheritor has 150 days to pay the tax, starting from the received date of inheritance from the revenue office. The inheritor has to complete the process within 1 year, and if there are unexpected reasons then they can appeal for the extension of no longer than 3 years. If found to avoid paying tax as stated then it will be considered as criminal offense by the heritage law punishable by a fine of not over 500,000 baht according to the inheritance tax act, and the Director-General of the Revenue Department has the power to seize or auction the inheritance without having to ask the court as well. Harsh isn’t it?

In fact, the inheritance tax is not a new issue for Thailand. Many countries around the world has been enforcing the law before us. The country with the highest inheritance tax rate is Switzerland, with 55% follow by Japan, 50%, therefore, the rate of our tax seems like nothing compare to these 2 countries. We suggest that, for those families with lots of assets, you should start planning how you will manage all these assets carefully for you and your family’s safety, so that there won’t be any misunderstandings and fights within the family because of the inheritance.

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