JimGant

Because it became income, not a gift. Why she, not the workers, had to pay the tax -- dunno. This whole drill was a sham.

Right. But only after you declare that assessable income on your tax return -- so (I don't know what charitable deduction rates are) it's probable the deduction won't completely zero out the tax on your remitted assessable income.

Nope. Not sure there are any official links mentioned on this, and similar, threads.

Why define the nature of the 200MB? The gift tax journey is about having Thai fat cats having to pay (or have their recipients pay) a tax for bygone future estate inheritance tax receipts on assets that may have been given away as gifts. Don't define it as a gift, but as a loan, due in 30 years (or some ridiculous term, known only to you, not the tax folks). Bottom line: No gift tax, since no gift. And why would she have to pay income tax on the 200M -- no earnings indicated here.

She had to pay tax on the "bogus" gift amounts given to her cooks, gardeners, drivers, etc, from whom the proceeds were redeposited into her bank account. Pretty sloppy job of disguising gifts.

Of course. Once that money crossed the border, it makes no never mind where it ended up. It is now remitted, assessable income (assuming it's assessable per the DTA). Nookie can call that cash input anything she wants, best just not call it anything. If she called it income for some kind of services provided, then she'd be subject to having to file a Thai tax return. Calling it a gift -- then, yeah, the 20M cutoff for gift tax. Or if the gifter said, "Pay me back in 30 years," then it's now a loan, not a gift. Anyway, Nookie just remain quiet. Cyril, pay the man for that remittance -- again, final destination of remittance completely irrevelant to income tax situation.

Yes, gifts may only be made from income already subjected to Thai PIT, or per DTA, income subjected to home country taxation.

Remitted assessable income is subject to Thai taxation -- regardless of where this money eventually ends up.

He's over the moon because whatever he gave as a gift is (he believes) exempt from Thai income taxes. If that 20M leaves a hole in his budget, he can discuss remedies with the gift recipient. Meanwhile, he can enjoy maybe a 35% windfall on taxes.

Not subject to a GIFT TAX. Yes, the guidance uses personal income tax in lieu of gift tax -- that makes matters all that more confusing. Gifts are NOT subject to income tax, period. Only the money that became a gift is subject to income tax.

Well, if the gifter gets to exempt the full amount of the gift from Thai income taxes, then, obviously, he benefits the most. But, I don't believe this is where Thai tax authorities are. And the receiver certainly has an out-of-the-blue windfall, 'tho she (assuming wife/mother) has to pay a 5% gift tax on amounts greater than 20M baht. Thus, the gifter may have a tax holiday in two ways -- income and gift taxes. So, I'd say he's the winner. The gift is not income, so income tax doesn't come into play (not to be confused with gift tax). But, yes, as a gift the first 20M is exempt from a gift tax; and the whole total amount, as long as a legitimate gift, is exempt from income taxes. So, yeah, good deal for the receiver. But, the receiver DOES have to pay the tax on the 20M excess, not the gifter. (Unlike in the US, where the gifter pays the tax, not the recipient.) The recipient of the gift is certainly pleased. Now the gifter -- if he believes whatever amount of previously assessable/taxable income is now tax exempt -- he's, of course, now over the moon. And, if he can believe all the supporting blah blah on this forum, come next March2025, when he files his taxes, can just omit as assessable income that chunk of money he remitted in 2024 that ended up as a gift. [Mike, don't cut that, as it's just an observation, not an illegal endorsement.]

In either situation, the income that eventually ends up as a gift -- is taxed as income somewhere. You seem to be confusing income taxation of pre gift income with a gift tax, on a sum of after-income tax money subsequently gifted. I think when you said "the UK doesn't tax gifts from overseas." you meant: It didn't apply a gift tax to sums of money gifted from overseas. Totally separate from from any income taxation on this same pot of money.

The UK doesn't tax gifts from overseas -- because the obligation for income taxing the sum of money gifted is on the source country. The UK, like the US and all other OECD countries, assumes the gift is an after-income tax asset. And there's nothing out there, at least that I can find, that implies Thailand is unique in treating gifts as being exempt from income tax, whether due in the source country, or due in Thailand when remitted, prior to its becoming a gift. Can anyone recall where this notion that income remitted to Thailand, that is assessable income -- is somehow tax exempt if its final use is as a gift? I think that somehow wishful thinking blossomed into presumed fact....

Why not? A discussion of possible workarounds is certainly germane to this subject. Yes, if the workaround would definitely be illegal -- then, yes, disallow. Possibly illegal? Allow discussion, with caveat of potential illegality. I guess the one workaround you will allow is: Leave the country.

A gift tax is what's paid on gifts in excess of 20k to family, 10k to non family. What we're dancing around here is, whether or not a gift makes an otherwise remittance of assessable income -- no longer assessable, and thus now tax free. Sound too good to be true? You bet. That's why I think the following from the Personal Income Tax guide still applies:

Correct. But he asked about sticking a credit card into the ATM machine. So it would be a loan, using a CC for a cash advance.

Sure. That would be a "cash advance," which is a fancy term for a loan. And since a loan is not income, such monies when remitted to Thailand, either by a SWIFT wire or by an ATM machine -- are not subject to Thai taxation.

Yeah, that extended payment option is called a loan. And there's no need to further discuss why remitted loans to Thailand are NOT assessable income.

Only in the odd ball situation of a "non domiciled UK resident," who "opts"to be taxed on his remittances. The other 95% of Brits are not taxed on their remittances, and thus credit card charges are loans, not remitted payments. Where Thailand might head is a good question. But wherever that is, no foreigner is going to declare credit card charges, or even debit card charges, as remitted, assessable income. Thailand's cost/benefit analysis will certainly show it ain't worth it to pursue such charges as assessable income. Even Forest Gump would come to this conclusion.

not

Mike, you've lost your compass. Yes, a bank making a foreign payment of your debit card charge has the appearance of a remitted income, as the account is instantly reduced by the amount of the charge (I say appearance, because your bank account may be full of savings, not income). But a credit charge does not reduce your bank account balance by the amount of the charge (duh), because, of course, it's a loan -- paid back in full 30 days later, or 2 years later, if you make minimum payments and pay interest. There's is no remitted cash flow from your bank account, that can be construed as remitted income. The payment for your hamburger is the banks money, not yours. Yes, the UK has a remittance income system, somewhat bizarre, where a non resident is considered a resident (kind of a transgender-like tax situation), where they've then transformed credit card charges into debit-like charges, meaning, we'll treat your money as being remitted, not the bank's. That Thailand will follow this system, will remain to be seen (actually, they could have followed it the last 30 years, as this would have been a prima facie case of same year income, being remitted same year, thus taxable. But, good sense -- and history -- says, RD will never look at credit card charges as other than what they are -- loans. Just like a loan for condo remitted to Thailand.

Yeah, a little convoluted. Point was, a loan for a condo, remitted to Thailand, is non assessable. A loan from a credit card company, to buy a hamburger, is also a non assessable loan. Unless, per HMRC (as you point out), you don't live in the UK, but you're a resident of the UK (obviously a legal distinction) -- and you choose to be taxed on the remittance basis. Then, a credit card purchase is treated the same as a debit card purchase -- thus, no loan factor: As far as I can find, this non dom example for UK types is the only example that Thailand could follow for how to treat certain remittances. This, if memory serves, would also bring in LIFO for commingled funds. So, I guess we'll have to wait and see if Thailand wants to use an example of a 'resident who doesn't reside' as their best example to follow.

Does that go for condo purchases also? -- can't quite see any taxable event going on here. Of course they're not assessable, since they're not remitted to Thailand. And don't say a loan is actually a surrogate income remittance -- 'cause that's too much of a stretch. That certainly wouldn't fly for a loan to buy a condo -- and also a hamburger. Obviously you didn't make that up. Could you give us a source, please? When's the last time your credit card bank forgave your debt? But irrelevant, as the cash flow into Thailand is what we're concerned with -- and whether or not it's a loan, or a gift, doesn't make it remitted income.

Indeed. If I buy a BigMac, and charge it to my credit card, this is the bank's money paying for my lunch. Same as if I borrowed money from my bank to buy a condo in Thailand. The money actually being remitted into Thailand is certainly not income -- it's a loan, with how it's to be paid back stipulated in the contract -- whether we're talking hamburgers or condos. For my credit card, once a month my bank debits my checking account to pay off the credit card bill. Money moves from one side of my bank to the other. It's not a cash flow with any income aspects to the IRS -- and certainly no income aspect to Thailand. I don't see any grey area the somehow could make credit card charges some kind of remitted income...

1099's come out in Jan-Feb. Presumably, they'll show the up front withholding taxes you've paid. Or, an estimated tax form, if you paid estimated taxes to EFTPS. These forms will reflect that most of your taxes have been prepaid, as you are required to prepay a large percentage of what becomes your final tax bill, as then reflected on your 1040 filing. I solely used 1099's to get my LTR visa, since the 1040 was joint, and thus the numbers weren't delineated between me and the wife.