Thai inheritance law for expats and Thai people is a relatively new concept that was announced on 5 August 2015. It only applies to large estate of more than 100 million baht. Thai or foreigners are normally treated equally and people subject to inheritance are written at clause 11 off the Tax Inheritance Act of 2015. This article will provide a general overview of Thai inheritance law and how it applies to expats.
Who are the legal heirs under Thai inheritance law?
Under Thai law, there are two types of heirs: statutory heirs and testamentary heirs. Statutory heirs are those who are entitled to inherit under the law, even if the deceased did not leave a will. Testamentary heirs, or legatees, are those who are named in the deceased’s will.
The statutory heirs under Thai law are:
- The surviving spouse
- The deceased’s children
- The deceased’s parents
- The deceased’s siblings
- The deceased’s grandparents
- The deceased’s uncles and aunts
- The deceased’s cousins
If the deceased has no statutory heirs, then their estate will go to the Thai government.
How is an estate distributed under Thai inheritance law?
The distribution of an estate under Thai inheritance law depends on whether the deceased left a will or not. If the deceased left a will, then their estate will be distributed according to the terms of the will. If the deceased did not leave a will, then their estate will be distributed according to Thai law.
How can expats inherit property in Thailand?
Expats can inherit property in Thailand, but there are some restrictions. For example, foreigners cannot own land in Thailand. However, foreigners can inherit land but would need permission to put it under their name, which is never granted. So the law allows them to transfer it or sell it within 180 days to year. Information about this process is found in the Land Code.
What are the tax implications of inheriting property in Thailand?
Before 2015, there were no inheritance taxes in Thailand. However, there are estate taxes on estates that are valued over THB 100 million (section 12 of the inheritance tax of 2015). The estate tax rate is 10% on the portion of the estate that exceeds THB 100 million.
There are exemptions to inheritance tax in Thailand :
- If the value of the estate is under THB 100 million.
- A person receiving inheritance from the decease who died before enforcement of the law (1st February 2016) according to section 3(1) of the law.
- Being a legal spouse according to section 3 (2) of the Inheritance
- And rare others exceptions like a government agency, or a legal entity receiving inheritance for education, religious or public purposes. Also international organisations under commitments between Thailand and the United Nations, or reciprocal arrangements with other countries.
Inheritance tax rate:
Inheritance tax are still quite low in Thailand. In 2023, the law specifies:
- 5% inheritance tax for parents and descendants (clause 16 in fine)
- 10% inheritance tax for other heirs (Clause 16 of the law)
The amounts will apply on immovable property, securities according to the SEC of Thailand, money or other forms of wealth into financial institutions, vehicles, or any financial assets descripted by a Royal Decree.
What should expats do to plan for their inheritance in Thailand?
Expats who have property in Thailand should plan for their inheritance. This can be done by creating a Thai Last will and others. Estate planning in Thailand can be larger than than just about a Last Will. Maybe you wish to add a Living Will. You could not create a trust under Thai law but that can be done in a foreign country. Donations while being alive are another way that is entirely legal and could save taxes or future problems.
A Thai will is a legal document that allows you to specify how you want your property to be distributed after your death. A Thai will must be drafted by a Thai law firm and must be signed and witnessed in front of two Thai witnesses. You do not wish to buy a template, without having the insurance that your document is fully valid under Thai law. Some law firms will charge you over 30,000 baht for a Last Will and Testament but ThaiLawOnline can do it for less than 10,000 baht including consultation and instructions.
If you have a larger estate than 100 million baht, you should consult professional that can advise you on how to refuse your taxes and protect your love ones. It is important to seek legal advice from a Thai law firm to understand your rights and obligations under Thai law.