Information on inheritance law for resident foreigners and their families with assets in and outside of Thailand...
Thai laws regarding inheritance apply to all types of property, moveable or immoveable, and to Thais and foreigners, regardless of whether they are resident or non-resident. Usually, the beneficiary is entitled to receive all property that they are bequeathed under the will. However, there are special rules that apply to foreigners owning land, so if a foreigner is bequeathed land the consent of the Interior Ministry must be obtained before they can claim it. This may be granted in certain cases, but if permission is refused, then the land must be sold within one year (and the cash can be transferred), or the land transferred to a Thai national.
In the case of a condominium, the ownership is transferable to a foreigner provided that the percentage of usable space owned by foreigners in that particular development does not exceed 49 percent. If it does then it must be sold within one year or transferred to a Thai national.
Where a person dies without having made a valid will (Intestacy)
If a person dies without having made a valid will, or if the will only disposes of part of their estate, then the property is distributed in the following ways:
There are six classes of statutory heirs. These are mutually exclusive, and entitlement applies in descending order:
- Brothers and sisters
- Half-brothers and sisters
- Uncles and aunts
Where a spouse survives:
- If the deceased leaves a spouse and children, then the spouse takes 50 percent and the children take 50 percent in equal shares.
- If the deceased dies leaving a spouse and parents, then the spouse takes 50 percent and parents take 50 percent in equal shares.
- If the deceased dies leaving a spouse and siblings of the whole blood, then the spouse takes 50 percent and the siblings take 50 percent in equal shares.
- If the deceased dies leaving a spouse and heirs in classes, 4,5 or 6 above, then the spouse takes two thirds of the estate and the statutory heirs in the class entitled take one third in equal shares.
- If there are no statutory heirs in existence, the surviving spouse takes the whole estate.
Where there is no surviving spouse:
Where a person dies leaving no surviving spouse, then the class of statutory heirs entitled takes the whole of the estate in equal shares. For example, if a person dies leaving no spouse but children, then the children take the whole estate in equal shares. If a person dies leaving no spouse or children but leaving parents, the parents take the whole estate in equal shares.
On an intestacy, if there is no surviving spouse or statutory heirs, the whole estate passes to the government of Thailand.
Where the deceased is a director or shareholder in a company
Where the deceased owned shares, these are not automatically transferred to the beneficiaries. This would be considered by the Board of Directors who may have discretion to refuse a request for transfer under the articles of association. If the nature of the business is restricted under the Foreign Business Act, then a transfer may be refused if its effect would be that foreign ownership of the business would then exceed 49 percent. In such cases the shares may have to be sold or transferred to a Thai person. For these reasons it is advisable to have more than one director in the company, so that management may be continued without disruption.
If a deceased foreigner is the director of a Thai company, the directorship does not pass to the heirs.
Inheritance tax came into force in Thailand in February 2016. The threshold is 100 million Baht and the tax applies to the excess above that amount. The tax rates are 5% or 10% depending on whether the beneficiary is a close relative of the deceased or not. The tax only applies to assets where the title is registered e.g. land and buildings, shares, motor vehicles, etc. Other fees chargeable e.g. Land Department fees on a transfer of property or stamp duty on a transfer of shares, are still payable in addition to any inheritance tax payable.
Prepared by: Stephen Frost, Director, Bangkok International Associates 17th Floor ITF Tower, 140/36-37 Silom Road, Bangkok 10500, Thailand Tel: 02 231 6201-3 Fax: 02 231 6204 /e-mail email@example.com /Website www.bia.co.th Copyright ® Bangkok International Associates 2017 All Rights Reserved