Calculation of Inheritance Tax
Tax Rate
An heir who receives inheritance with the value exceeding 100 million THB is subject to paying inheritance tax in the following rates stipulated by Section 16 of the Inheritance Tax Act B.E. 2558 (2015):
- Descendants at 5%;
- Parents at 5%;
- Grandparents at 5%;
- Bloodline-unrelated individuals at 10%.
Case Example: Land Lot Valued at 300 THB Million
Since the value of this inherited land exceeds 100 million THB, as stipulated by the tax law, the value needed to be taxed is at 200 million THB.
(Equation: 300 million THB – 100 million THB = 200 million THB)
Case 1: 5% tax rate (descendants, parents, and grandparents)
The exceeded value required to be taxed at 200 million THB multiplied 5%. With such, the heir shall pay this inheritance tax at 10 million THB.
Case 2: 10% tax rate (non-full-blood persons)
The exceeded value required to be taxed at 200 million THB is multiplied
10%. With such, the heir shall pay this inheritance tax at 20 million THB.
Exemptions to Inheritance Tax
The following cases may qualify as legal exemptions to inheritance tax:
- Inheritances given to any governmental sector shall not be subject to taxation, as it is deemed as a public contribution for national development.
- Inheritances given to a legal spouse shall be exempt from taxation because it is deemed as a hard-earned income resulting from a civil marriage.
- Establishing a limited company with its descendants as shareholders.
- Transferring inheritance into a trust fund for heirs to receive dividends, unless the Thai law on trust is introduced.
- Transferring inheritance to a charity, a foundation, or an association as publicly-contributed entities under Section 13 (1-3) of the Act.
- Purchasing life insurance with descendants as beneficiaries upon the death of the testator.
Distributing inheritance to descendants and spouses with the value not exceeding 100 million THB.
If you have questions related to the article or in need of legal assistance, feel free to reach out to us.
Category: Property
About the Author (Author Profile)
Siam Legal is an international law firm with experienced lawyers, attorneys, and solicitors both in Thailand law and international law. This Thailand law firm offers comprehensive legal services in Thailand to both local and foreign clients for Litigation such as civil & criminal cases, labor disputes, commercial cases, divorce, adoption, extradition, fraud, and drug cases. Other legal expertise of the law firm varied in cases involving corporate law such as company registration & Thailand BOI, family law, property law, and private investigation.
