A Simple Guide to Inheritance Tax in Thailand

TL;DR, if you inherit an estate in Thailand worth more than THB 100 million, only the amount above that threshold is taxed. The tax rate is just 5% for close family members like children and parents and 10% for other heirs. Many people are exempt, such as legal spouses or those receiving estates under THB 100 million. This system is designed to be fair and to spread wealth more evenly. If you’re not sure how this affects you, talking to a legal or tax expert is a smart idea.

Many clients worry about inheritance tax in Thailand, and there are plenty of misunderstandings about how it works. Inheritance tax was introduced on 5 August 2015 to create a fairer tax system by taxing those who gain wealth from a deceased person’s estate. The law only kicks in if the total inheritance exceeds THB 100 million, meaning smaller estates won’t be affected. Under Section 11 of the Inheritance Tax Act, Thai nationals are liable for the tax, as are non-Thai nationals living in Thailand or those who inherit assets located in the country. Even companies registered in Thailand, or those with more than 50% Thai ownership, have to pay if they receive an inheritance.

There are important exemptions, too. For example, if the value of the inheritance is THB 100 million or less, no tax is due. Legal spouses are also exempt, as are inheritances from someone who died before 1 February 2016. Government agencies or legal entities that use the inheritance for educational, religious, or public purposes, along with certain international organizations under specific agreements, don’t have to pay the tax either.

If your inheritance exceeds THB 100 million, only the amount over that threshold is taxed. For close family members like parents and direct descendants (children or grandchildren), the tax rate is 5%. For other heirs, such as siblings or more distant relatives, the rate is 10%. For instance, if you inherit THB 150 million and you’re a direct descendant, THB 50 million is taxable, resulting in a tax of THB 2.5 million. In contrast, if you fall into the other category, you would owe THB 5 million.

The tax applies to a wide range of assets. These include immovable property like land and buildings, securities defined under the Securities and Exchange Act, money deposited in banks, registered vehicles, and other financial assets as prescribed by Royal Decree. The value used for calculating the tax is determined on the date you receive the asset, which is crucial for an accurate assessment.

If you do owe inheritance tax, you must file a tax return and pay the tax within 150 days of receiving the inheritance. The tax return form is available on the Revenue Department’s website, and you need to submit it at your local branch office. It’s very important to file on time because late filing can lead to heavy penalties, including fines that might be twice the tax amount, additional monthly charges, or even imprisonment in severe cases.

Overall, Thailand’s inheritance tax system aims to distribute wealth fairly without burdening smaller estates. The tax is only triggered by very high-value inheritances, and many heirs – like legal spouses or those receiving inheritances under THB 100 million – are completely exempt. Understanding these rules can help you plan your estate better and avoid unexpected costs later on. If you’re planning your estate or expecting to receive an inheritance, it’s always wise to consult with a legal or tax expert who knows Thai law. This will ensure that you’re fully prepared and can make informed decisions about your future and that of your loved ones.