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Understanding inheritance risks for foreign-owned assets in Thailand
Inheritance involving assets in Thailand creates complex legal and tax issues for foreign nationals. For many years, succession in Thailand was seen mainly as a civil law matter under the Thai Civil and Commercial Code, with few tax consequences. This view changed with the introduction of the Thailand inheritance tax, making succession a combined civil, fiscal, and procedural process.
Foreign nationals who own assets in Thailand—such as condominiums, bank accounts, company shares, or long-term leases—are often unaware that these may be subject to Thai inheritance law and tax upon death. This applies regardless of the deceased’s nationality, where death occurs, or where the heirs live.
In practice, Thailand applies a territorial approach to inheritance and succession taxation, meaning that the location of the assets determines their tax treatment. “Succession rules” refer to the legal framework governing the transfer of assets upon death, while “inheritance tax” is a tax imposed on inherited assets. Thus, assets located in Thailand are subject to Thai succession rules and Thai inheritance tax, even when the deceased was not a Thai tax resident. When inheritance planning is not properly anticipated, heirs frequently face frozen bank accounts, blocked property transfers, prolonged court proceedings, and unexpected tax liabilities.
If there is no valid Thai will, default statutory succession rules apply. These rules may not accord with the wishes of the deceased or with foreign estate planning, property, or family circumstances. It gets a little trickier with foreign ownership restrictions, especially if you want to buy land rights or even Thai shares in companies.
Understanding how Thai succession law interacts with the Thailand inheritance tax is therefore essential for foreign asset owners seeking to protect their estate, ensure efficient asset transmission, and avoid legal disputes or tax penalties.
Table of Contents
What is the Thailand inheritance tax, and why does it matter for foreign asset owners?
Thailand introduced inheritance tax through the Inheritance Tax Act B.E. 2558 (2015), representing a clear policy shift. Instead of broad application, the Thai approach focuses on taxing high-value estates to address wealth concentration, leaving ordinary family succession largely unaffected.
From a legal perspective, the Thai inheritance tax regime is deliberately narrow. It:
- Applies only above high statutory thresholds,
- Targets specific categories of heirs,
- Operates independently from personal income tax, gift tax, and stamp duty regimes.
However, its procedural effects are far-reaching. In practice, inheritance tax compliance is closely linked to probate proceedings, asset freezes, and court supervision. This makes inheritance tax highly relevant for foreign asset owners.
For foreigners, the importance of Thailand’s inheritance tax lies not only in the tax liability itself, but in the fact that no Thai asset can be transferred, sold, or registered without first resolving succession and tax clearance issues.
Who is subject to the Thailand inheritance tax under Thai law?
Heirs as taxpayers – a fundamental legal distinction
A main feature of Thai inheritance tax law is that the heir, not the estate, is the taxpayer. This is clear in the Inheritance Tax Act and in Thai court practice. Each heir is taxed individually, based on the value of assets received, their relationship to the deceased, and the relevant thresholds and tax rates.
This model contrasts with estate-based jurisdictions and typically comes as a shock to foreign heirs with little knowledge of Thai succession law.
Nationality and residence are irrelevant
The Thai inheritance tax depends solely on the assets’ location and value. Nationality or residence of the heir is irrelevant; any heir may be taxed if the assets meet the territorial criteria.
Territorial principle and assets located in Thailand
Thailand applies a strict territorial principle, recognised both in legislation and jurisprudence.
Assets deemed located in Thailand usually include condominium units registered under the Condominium Act B.E. 2522.
- Registered leasehold rights (up to 30 years) under the Civil and Commercial Code,
- Usufructs (Sections 1417–1428 CCC),
- Superficies rights (Sections 1410–1416 CCC),
- Bank accounts held with Thai financial institutions,
- Shares in Thai limited companies,
- Certain contractual rights are enforceable in Thailand.
Even if a foreign will applies to the global estate, Thai courts hold that Thai-located assets stay subject to Thai law and Thai inheritance tax.
Which foreign-owned assets fall within the scope of Thailand’s inheritance tax?
Real estate and land-related rights
Under Thai law, foreigners are not permitted to own land in Thailand. Land ownership is only possible where the land is held through a company with recognised foreign business status, or through a land lease structure, under which Thai law allows foreign companies to hold land for specific industrial and commercial purposes.
Illustration (practical example)
A French national owns a condominium in Bangkok valued at THB 120 million and a 30-year registered lease in Phuket. Upon death, both assets are considered Thai-located. Even if his French will governs his estate, Thai courts will require the appointment of a Thai estate administrator, the valuation of the assets, and inheritance tax clearance before any registration or sale can take place.
Bank accounts and financial assets
Thai banks routinely freeze accounts upon notification of death, in accordance with internal compliance policies and established court precedents. The release of funds requires a court order appointing an estate administrator, the formal identification of heirs, and evidence of compliance with or exemption from inheritance tax. Shares in Thai companies are equally sensitive. Their transfer to heirs requires compliance with the company’s Articles of Association, adherence to the Foreign Business Act, and, where applicable, inheritance tax clearance. In the absence of proper planning, these requirements often result in years of asset immobilisation.
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Thresholds, tax rates and exemptions under the Thailand inheritance tax
Statutory thresholds
Inheritance tax applies only when the value inherited by an individual heir exceeds THB 100 million. This threshold is applied per heir, not per estate. However, the law combines multiple asset categories inherited by the same person when applying the threshold.
Applicable tax rates
Tax rates depend on the legal relationship between the deceased and the heir:
- 5% for statutory heirs (descendants, parents, spouses),
- 10% for non-statutory heirs (siblings, partners, third parties).
There is no full spousal exemption. This is often criticised and verified in practice.
Practical illustration
A foreign decedent leaves Thai assets worth THB 300 million to two children. Each child gets THB 150 million. Of this, THB 50 million exceeds the statutory threshold and is the taxable base. At a 5% rate, each child must pay THB 2.5 million in inheritance tax.
Thai succession rules in the absence of a will
Statutory succession under the Civil and Commercial Code
If there is no valid will, succession shall be governed by Sections 1629–1635 of the Civil and Commercial Code of Thailand. A Thai statutory heir is the person who is allowed inheriting under the laws using provisions of a will. There are six classes of statutory heirs: descendants (children or grandchildren), parents, full-blood brothers and sisters, half-blood brothers and sisters, grandparents, and uncles and aunts. These classes are inherited in a strict hierarchical order, meaning that a class must be excluded before the next inherits.
Risks for foreign nationals
For foreign nationals, intestate succession can exclude unmarried partners, divide assets unexpectedly, clash with foreign wills or trusts, and raise inheritance tax complexity. Thai courts confirm foreign arrangements cannot override Thai rules for Thai assets.
The central role of the Thai will under Thailand inheritance tax
Legal requirements for a valid Thai will
Thailand will follow Sections 1646–1710 of the Civil and Commercial Code. Common types include written wills with witnesses, registered wills before a district officer, and holographic wills. Courts closely check testamentary capacity, witness independence, and legal compliance.
Why a Thai will is essential
A well-prepared Thai will clearly designate heirs for Thai assets, name an executor, align with foreign estate plans, and anticipate inheritance tax.
Illustration
If you are non-Thai and have a foreign will (a global asset will rather than a Thai asset will), you may be subject to probate in multiple countries worldwide. This can delay asset release and increase tax risk.
Procedural obligations under the Thailand inheritance tax
Declaration and payment
Heirs must file an inheritance tax return, accurately declare the inherited assets, and pay the tax within the statutory deadlines. Asset valuation is frequently contested, particularly for real estate and shares in private companies.
Sanctions and litigation risks
Non-compliance may result in penalties and surcharges, asset seizure, civil litigation between heirs, and prolonged court supervision. Thai jurisprudence consistently holds that courts prioritise tax clearance over asset distribution, even when heirs agree.
How legal assistance protects foreign-owned assets under Thailand inheritance tax
Professional legal assistance is essential to secure foreign-owned assets subject to Thai succession law and the Thai inheritance tax. Proper legal support allows foreign asset owners to draft Thai wills that fully comply with the Civil and Commercial Code, coordinate Thai succession with foreign estate planning structures, and anticipate inheritance tax exposure before it becomes a blocking issue.
In practice, experienced legal counsel ensures the efficient appointment of estate administrators by Thai courts, manages valuation and tax procedures, and facilitates the release of frozen bank accounts and real estate. This proactive approach significantly reduces delays, litigation risks, and unnecessary tax costs.
Law firms with recognised expertise in Thai succession law and cross-border estates play a decisive role in preserving asset value, ensuring legal certainty for heirs, and preventing family disputes.
If you own assets in Thailand and wish to secure your estate, our legal team can assist you with tailored succession planning, Thai wills, and inheritance tax compliance.
Conclusion
Thailand’s inheritance tax has fundamentally transformed succession involving Thai assets into a highly technical and tightly regulated legal process. What was once perceived as a purely civil law matter now requires a careful understanding of Thai succession rules, probate procedures, and specific inheritance tax obligations. For foreign asset owners, a lack of preparation often results in frozen bank accounts, blocked property transfers, prolonged court proceedings, family disputes, and unexpected tax exposure.
In a cross-border context, these risks are amplified by the interaction between Thai law and foreign estate planning arrangements, which do not automatically prevail over Thai statutory rules. Without proper anticipation, heirs are often forced to navigate complex court-supervised procedures under significant time pressure and financial uncertainty.
Proactive succession planning, therefore, remains essential. In particular, a properly structured Thai will, aligned with foreign estate planning and supported by informed legal guidance, remains the most effective way to secure Thai assets, ensure lawful and timely transmission to heirs, and preserve the value of the estate while minimising legal and tax risks.
FAQ
Yes. The Thai inheritance tax applies to foreigners when they inherit assets located in Thailand, regardless of nationality or residence.
Under Thai law, the heir is the taxpayer. Thailand’s inheritance tax is assessed individually based on the assets received and the heir’s relationship with the deceased.
Thailand’s inheritance tax covers assets located in Thailand, such as real estate, bank accounts, shares in Thai companies, and registered rights.
The Thai inheritance tax applies only if an heir receives more than THB 100 million. The rate is 5% for statutory heirs and 10% for others.
No. A Thai will is not mandatory, but it greatly simplifies probate and Thailand inheritance tax compliance.
Yes. Foreign wills may be recognised, but a Thai court must validate them for Thailand inheritance tax and asset transfer purposes.
If Thailand’s inheritance tax is unpaid, assets may be frozen, and penalties may apply until the tax is cleared.
Without a will, statutory succession applies, often complicating asset allocation and Thailand inheritance tax assessment.
Yes. Lawful estate planning can help structure assets efficiently and optimise Thailand inheritance tax exposure.
Because Thailand’s inheritance tax involves court procedures, valuations, and strict deadlines, legal support helps avoid delays and disputes.