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Thailand Economy – Inheritance Gift Levy Set to Bite in 2015

By on Oct 22, 2014 in Industrial

The wealthy are racing against time to find ways to transfer assets to their heirs before the inheritance and gift tax comes into effect.  The new levy is expected to go to the cabinet for approval next month and take effect next year. The draft will stipulate a minimum rate of 10% to enable future rises without amendment of the law, Finance Minister Sommai Phasee said.  The ministry will start imposing the tax at 10% when at least 50 million baht in assets is passed down.

The inheritance and gift tax is one of several measures sought by the government with the aim of narrowing income disparity.

The land and buildings tax will come into force a year and a half after publication in the Royal Gazette to give the Treasury Department time to assess the value of 23 million land plots to serve as the tax base.  The department so far has appraised 7 million land plots on an individual basis.  The Fiscal Policy Office earlier proposed a ceiling rate of 4% for unused land and land for commercial use.  For unused land, the rate will double every three years but not exceed a maximum level of 4% of appraised value, a Finance Ministry source said earlier.  Maximum rates will be set at 0.5% for agricultural use and 1% for residential use.

When the land and buildings tax takes effect, it will replace the house and land tax and local development tax. Low-priced residences and land are likely to receive a waiver.

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