Selling stocks owned prior to 2024 and remit it to Thailand still tax free?

[TPDH]

Hi

 

If you remit foreign savings earned before 2024 into Thailand it's not supposed to be taxed despite the new tax rules. However, many of us have our savings invested in stocks on a foreign stock exchange and not just cash sitting in a savings account. 

 

Let's say you had $1000 (portfolio value) in foreign stocks on the last day of 2023. And now, in mid 2024 your stock holdings are worth $2000. Does that mean you can still safely sell off $1000 of your stock holdings and remit it into Thailand tax free at any time? As it would be considered savings prior to 2024. 

 

I'm thinking the only part that should be taxed if remitted into Thailand is the profit made above your original $1000?

 

I assume many people are in this situation so it would be helpful to get some insights on this. 

 

Thank you. 

[Eudaimonia]

This is purely speculation, but one possibility is that you would be expected to use FIFO (First In First Out) method and calculate the profit for the shares you purchased first. $500 or more of that $1,000 might be profit depending on the acquisition prices.

 

However, when realizing such capital gains, you might need to use the original purchase prices (for example, in 2021 or 2022), not the situation at the end of 2023.

 

Again, this is just pure speculation and merely how I, as a layman, would expect it to be. Official guidelines will hopefully be published at some point. We are all waiting.

[Mike Lister]

1 hour ago, TPDH said:

Hi

 

If you remit foreign savings earned before 2024 into Thailand it's not supposed to be taxed despite the new tax rules. However, many of us have our savings invested in stocks on a foreign stock exchange and not just cash sitting in a savings account. 

 

Let's say you had $1000 (portfolio value) in foreign stocks on the last day of 2023. And now, in mid 2024 your stock holdings are worth $2000. Does that mean you can still safely sell off $1000 of your stock holdings and remit it into Thailand tax free at any time? As it would be considered savings prior to 2024. 

 

I'm thinking the only part that should be taxed if remitted into Thailand is the profit made above your original $1000?

 

I assume many people are in this situation so it would be helpful to get some insights on this. 

 

Thank you. 

By using your savings to buy a capital asset, your savings are no longer savings, worse still, your asset is now subject of a capital gain.

 

No, you cannot deduct the original cost of the asset and remit that to Thailand tax free. Any remittance of that asset would be viewed as a mix of capital and gain, until the entire amount was transferred. If you make that transfer in a year when you are not Thai tax resident, there is a good chance the gain will be free of tax. To be 100% safe, the capital gain should also be realised in a year when you are not tax resident in Thailand. All of that is under current rules, if the rules change to worldwide income, the timing of the CG and the remittance, becomes irrelevant.

Edited June 19 by Mike Lister

[Pappap]

What if the assetts/gains are held in an ISA  or simlar to which ever country you're are from, these are tax fee holdings, consequently the tax implications are where the funds are raised. Presuming the person concerned still has an address they are using of tax based country and still registered for tax payments there. If not then the tax requiremnents here will probably still apply? 

[koolkarl]

My understanding is if you reside more than 180 days a year in Thailand this year, you have to file a tax return here by March 31/25 reporting all of your world income to Thai tax authorities.  This is the essence of the CRS agreement.  Also will not surprise me when you go to renew your annual visa next year, proof of

you filing  a tax return here may be needed.  Have fun.

[NJHOUSE]

When filing your federal taxes with the IRS, you'd be paying tax on the net gain which takes into account the cost basis of all your realized trades for that tax year. I cannot imagine how Thai taxes could be any different because surely you'd be presenting your US tax return as the basis for any tax liability in Thailand. No?

Edited June 20 by NJHOUSE

[Mike Lister]

46 minutes ago, koolkarl said:

My understanding is if you reside more than 180 days a year in Thailand this year, you have to file a tax return here by March 31/25 reporting all of your world income to Thai tax authorities.  This is the essence of the CRS agreement.  Also will not surprise me when you go to renew your annual visa next year, proof of

you filing  a tax return here may be needed.  Have fun.

Very uncool Karl, wrong answer by a mile!

 

Thailand does not not tax on a world wide income basis, only on the remittance basis.

Edited June 20 by Mike Lister

[Mike Lister]

51 minutes ago, Pappap said:

What if the assetts/gains are held in an ISA  or simlar to which ever country you're are from, these are tax fee holdings, consequently the tax implications are where the funds are raised. Presuming the person concerned still has an address they are using of tax based country and still registered for tax payments there. If not then the tax requiremnents here will probably still apply? 

It doesn't matter what type of wrapper the funds are held in, it's either cash savings or its not, DTA exempt or not.

[charliebadenhop]

Let's say that I have done well financially, in the past. A person could have $1mil sitting in a bank in the US, UK, etc.

So how does the Thai govt. know anything at all about where the money you have comes from? The Thai government is not going to try and tax people on their SAVINGS, yes?

 

[Mike Lister]

1 minute ago, charliebadenhop said:

Let's say that I have done well financially, in the past. A person could have $1mil sitting in a bank in the US, UK, etc.

So how does the Thai govt. know anything at all about where the money you have comes from? The Thai government is not going to try and tax people on their SAVINGS, yes?

 

You have to tell them and if you lie and they check, you get to go to the big house for a few years, vaseline not included.

[khunPer]

22 hours ago, TPDH said:

Hi

 

If you remit foreign savings earned before 2024 into Thailand it's not supposed to be taxed despite the new tax rules. However, many of us have our savings invested in stocks on a foreign stock exchange and not just cash sitting in a savings account. 

 

Let's say you had $1000 (portfolio value) in foreign stocks on the last day of 2023. And now, in mid 2024 your stock holdings are worth $2000. Does that mean you can still safely sell off $1000 of your stock holdings and remit it into Thailand tax free at any time? As it would be considered savings prior to 2024. 

 

I'm thinking the only part that should be taxed if remitted into Thailand is the profit made above your original $1000?

 

I assume many people are in this situation so it would be helpful to get some insights on this. 

 

Thank you. 

No, your capital gain is taxable, according to my understanding of the new rules – based on following what is normal practise in tax rules – when you sell $1,000 of your $2,000 stock value, you sell half of the stocks, and that half has a gain, as the original purchase price was $500. However, your capital gain before 1st January 2024 – i.e. your stock value per 31st December 2023 – are savings; so, in principle it's your 2024-capital-gain that is the income taxable amount. You need documentation to prove it.

[Mike Lister]

1 minute ago, khunPer said:

No, your capital gain is taxable, according to my understanding of the new rules – based on following what is normal practise in tax rules – when you sell $1,000 of your $2,000 stock value, you sell half of the stocks, and that half has a gain, as the original purchase price was $500. However, your capital gain before 1st January 2024 – i.e. your stock value per 31st December 2023 – are savings; so, in principle it's your 2024-capital-gain that is the income taxable amount. You need documentation to prove it.

To be clear......your stock value per 31st December 2023 is still stock and is not savings. The CG is measured from the date the asset was first acquired and is not re-baselined once again at 31 December 2023. eg. you spend $1,000 and buy stock in 2015 and sell it in February 2024. Your CG is measured from 2015, not 1 January 2024.

[wwest5829]

1 hour ago, NJHOUSE said:

When filing your federal taxes with the IRS, you'd be paying tax on the net gain which takes into account the cost basis of all your realized trades for that tax year. I cannot imagine how Thai taxes could be any different because surely you'd be presenting your US tax return as the basis for any tax liability in Thailand. No?

Yes, and all my income is required to be reported to the IRS as an American. My tax obligation as a retiree, even if selling stock results in no USA tax being owed (after the exemptions, deductions). Thailand thinks they get to tax me and require I bring in 65K every month for a Retirement Visa Exension?(yes I know … or 800K in a Thai bank)

[gamb00ler]

1 minute ago, Mike Lister said:

To be clear......your stock value per 31st December 2023 is still stock and is not savings. The CG is measured from the date the asset was first acquired and is not re-baselined once again at 31 December 2023. eg. you spend $1,000 and buy stock in 2015 and sell it in February 2024. Your CG is measured from 2015, not 1 January 2024.

On what basis do you think the above is how TRD will assess capital gains that are the result of gains from both before and after Jan. 1, 2024?  It is not a reasonable method that you're suggesting TRD will use.

 

It is easy for stock holders to document their investment's value as of Dec. 31.  That should become the basis that TRD should use for determination of gains.  A taxing authority should accept that invested savings are still indeed savings and treat the investments as having a deemed disposition at the boundary between tax free and taxed holding periods.

[Mike Lister]

1 minute ago, gamb00ler said:

On what basis do you think the above is how TRD will assess capital gains that are the result of gains from both before and after Jan. 1, 2024?  It is not a reasonable method that you're suggesting TRD will use.

 

It is easy for stock holders to document their investment's value as of Dec. 31.  That should become the basis that TRD should use for determination of gains.  A taxing authority should accept that invested savings are still indeed savings and treat the investments as having a deemed disposition at the boundary between tax free and taxed holding periods.

It was recorded in a Q&A somewhere, I'll have to do some digging to determine the source, as I recall it was the expat video series. The CG could only be re baselined to 31 December 2023, if the shares were bed and breakfasted on that date. If however the shares were held contiguously since purchase, it's the purchase date that counts. I believe that Mike Teave is up to date on this, in the UK there is a now a 30 day wait period before bed and breakfast can take effect so that had to be built in to the equation.

[Lacessit]

1 hour ago, Mike Lister said:

It doesn't matter what type of wrapper the funds are held in, it's either cash savings or its not, DTA exempt or not.

Suppose I have money on deposit with a peer-to-peer lender, or financial institution which is not a bank. I also have proof the funds invested with such organisations existed as of 31/12/2023.

 

The interest on such investments, if remitted to Thailand in 2024, is taxable income.

 

If I remit the capital, is that not tax free? It seems to me only counting bank deposits prior to 2024 would be an extremely narrow interpretation of savings.

 

[Mike Lister]

1 minute ago, Lacessit said:

Suppose I have money on deposit with a peer-to-peer lender, or financial institution which is not a bank. I also have proof the funds invested with such organisations existed as of 31/12/2023.

 

The interest on such investments, if remitted to Thailand in 2024, is taxable income.

 

If I remit the capital, is that not tax free? It seems to me only counting bank deposits prior to 2024 would be an extremely narrow interpretation of savings.

 

At this stage our interpretation is black and white, until such time as the TRD says otherwise. And remember also, these interpretations are based on the tax payer being asked to prove, beyond reasonable doubt, that the funds are indeed savings. 

 

If your funds are on deposit, regardless of with whom, they are generating income and as such are regarded as income generating rather than savings, unless the principle and interest are clearly separate, as in the interest is paid away. But if the interest is paid into the account containing principle, it gets into the area of commingled funds and the way in which remittances from such accounts are treated. 

 

100% safe and clear is savings that generate interest where the interest is paid away, the principle in that example is clearly delineated.

 

The fact the investment is with a peer to peer lender, rather than a  banks, is nor really relevant..

 

 

[Lacessit]

15 minutes ago, Mike Lister said:

At this stage our interpretation is black and white, until such time as the TRD says otherwise. And remember also, these interpretations are based on the tax payer being asked to prove, beyond reasonable doubt, that the funds are indeed savings. 

 

If your funds are on deposit, regardless of with whom, they are generating income and as such are regarded as income generating rather than savings, unless the principle and interest are clearly separate, as in the interest is paid away. But if the interest is paid into the account containing principle, it gets into the area of commingled funds and the way in which remittances from such accounts are treated. 

 

100% safe and clear is savings that generate interest where the interest is paid away, the principle in that example is clearly delineated.

 

The fact the investment is with a peer to peer lender, rather than a  banks, is nor really relevant..

 

 

AFAIK all savings accounts have their interest paid into the same account as where the savings are. I don't know what you mean by the term "paid away".

 

Most institutions issue quarterly or six-monthly statements which document the capital balance and interest paid.

 

Hypothetically, if I have an account containing AUD 30,000 as at 31/12/2023, it should be irrelevant if I choose to remit those savings in 2024, 2025, or 2026. All I should need is the proof those savings existed

prior to 2024, for the remittance to be tax-free.

[Mike Lister]

1 minute ago, Lacessit said:

AFAIK all savings accounts have their interest paid into the same account as where the savings are. I don't know what you mean by the term "paid away".

 

Most institutions issue quarterly or six-monthly statements which document the capital balance and interest paid.

 

Hypothetically, if I have an account containing AUD 30,000 as at 31/12/2023, it should be irrelevant if I choose to remit those savings in 2024, 2025, or 2026. All I should need is the proof those savings existed

prior to 2024, for the remittance to be tax-free.

The term "paid away" is in common usage and means paid into a separate account, which of course disallows for compound interest. The issue with paying interest into the same account as the principle is commingling, the treatment of which remains unclear.

[Tony M]

12 minutes ago, Mike Lister said:

The term "paid away" is in common usage and means paid into a separate account, which of course disallows for compound interest. The issue with paying interest into the same account as the principle is commingling, the treatment of which remains unclear.

 

Mike, can I ask your opinion on whether capital in a retirement fund is considered to be cash savings.  The capital is derived from a cashed-in Defined Benefit  (final salary) pension. The capital was then invested in a retirement portfolio (a QROPS).  How do you see the capital ?  Is it, or was it cash savings, or is it now an investment, or whatever ?  There are, of course, some "yields" from the fund, but there is no capital gain on the original fund amount, as some has been taken in pension drawdowns over the years. 

[Mike Lister]

2 minutes ago, Tony M said:

 

Mike, can I ask your opinion on whether capital in a retirement fund is considered to be cash savings.  The capital is derived from a cashed-in Defined Benefit  (final salary) pension. The capital was then invested in a retirement portfolio (a QROPS).  How do you see the capital ?  Is it, or was it cash savings, or is it now an investment, or whatever ?  There are, of course, some "yields" from the fund, but there is no capital gain on the original fund amount, as some has been taken in pension drawdowns over the years. 

Honestly I have no idea on this one but I can maybe help with an older interpretation from a previous life.

 

Whether or not funds are savings will be determined by how the funds are held and any time related restrictions on them, and whether their redemption or withdrawl value is increased by any form of income or interest, either periodically or at maturity/ transfer/account closure.

 

Once again sorry, that's the closest I can get to that one, perhaps others can chip in.

[Tony M]

7 minutes ago, Mike Lister said:

Honestly I have no idea on this one but I can maybe help with an older interpretation from a previous life.

 

Whether or not funds are savings will be determined by how the funds are held and any time related restrictions on them, and whether their redemption or withdrawl value is increased by any form of income or interest, either periodically or at maturity/ transfer/account closure.

 

Once again sorry, that's the closest I can get to that one, perhaps others can chip in.

 

Thanks for that, Mike.  I understand what you have said, but I have no idea how that would "work" in reality. I'm pretty sure the TRD won't have a position on it, and will likely say that it is not cash savings held before 1/1/24.

[Dickp]

I must have something in the new reading of the Thai tax’s. My understanding was Thai will say that you are a tax able resident if spend a told of 176 days in one year in Thailand. TDR will then consider any money bought into Thailand after 1 Jan 2024 as taxable and that a TDR tax form is required to filed by 31 Mach 2025. Nothing about stock owned or money in the bank outside of Thailand ect, only money bought into Thailand after 1 Jan 2024 would be consider as taxable. For now TDR has not finger out all the different question about what’s taxable once sent to Thailand.

[Mike Lister]

2 minutes ago, Dickp said:

I must have something in the new reading of the Thai tax’s. My understanding was Thai will say that you are a tax able resident if spend a told of 176 days in one year in Thailand. TDR will then consider any money bought into Thailand after 1 Jan 2024 as taxable and that a TDR tax form is required to filed by 31 Mach 2025. Nothing about stock owned or money in the bank outside of Thailand ect, only money bought into Thailand after 1 Jan 2024 would be consider as taxable. For now TDR has not finger out all the different question about what’s taxable once sent to Thailand.

180 days

 

Money bought in after 1 January 2024 must be assessable income, not juts money.

 

Income that remains outside Thailand is not assessable to Thai tax, only remitted income is.

[NoDisplayName]

5 hours ago, Mike Lister said:

It was recorded in a Q&A somewhere, I'll have to do some digging to determine the source, as I recall it was the expat video series. The CG could only be re baselined to 31 December 2023, if the shares were bed and breakfasted on that date. If however the shares were held contiguously since purchase, it's the purchase date that counts. I believe that Mike Teave is up to date on this, in the UK there is a now a 30 day wait period before bed and breakfast can take effect so that had to be built in to the equation.

 

Hi Mike!

Stock sale capital gains and assessable income question.

 

I bought a batch of XYZ for $1000 in 2022, and I sell all shares for $2000 this year, for $1000 capital gains.

 

I use $1000 to buy some other asset, and send $1000 to Thailand for monthly expenses.

 

How much, if any, of the $1000 brought in to Thailand would  be considered assessable income?

 

Assuming TRD will use purchase price rather than value Dec 31, 2023 for cost basis.

 

I want to claim the original $1000 investment returned in the stock sale was brought in, with the $1000 capital gain left in brokerage account and  reinvested.

[Lacessit]

4 hours ago, Mike Lister said:

The term "paid away" is in common usage and means paid into a separate account, which of course disallows for compound interest. The issue with paying interest into the same account as the principle is commingling, the treatment of which remains unclear.

"Paid away" in Australia only seems to happen with share dividends paid into a bank account.

 

If I have $30,000 on term deposit, the interest is paid into the same account as the deposited funds, unless it is transferred to a different account. I could do this if necessary, but I don't see the point.

 

Unless you are saying money on term deposit does not qualify as savings, which sounds quite weird. Is cash at call the only form of savings the TRD allows?

[biervoormij]

8 hours ago, NJHOUSE said:

When filing your federal taxes with the IRS, you'd be paying tax on the net gain which takes into account the cost basis of all your realized trades for that tax year. I cannot imagine how Thai taxes could be any different because surely you'd be presenting your US tax return as the basis for any tax liability in Thailand. No?

I am not a tax expert but I do not believe this is always the case.

 

The US and Thailand have very different tax rates. This is really the case with long term capital gains and qualified dividends. The US tax rate for long term gains as a single  person.

0% Up to $44,625

15% between $44,626 – $492,300

20% Over $492,300

 

$44,625 is equal to about 1.6 million baht.

You would owe $0 in the US if this is your only income and is all in long term capital gains but In Thailand you will be going through the different tax brackets and possible be paying 25% on part of your income.

 

Also a single person in the US gets a $13,850 standard deduction in 2023 which is also 0% taxed. I am not 65 so get a lot lower deduction in Thailand.

 

If you have capital gains in the US you may want to really think about how this tax will impact you but like I say I am not an expert. If someone see errors in my thinking please correct me.

 

I ran my numbers from my 2023 tax return and if the tax stays based on remittance I think I will stay in Thailand but if it becomes based on global income I think I will leave.

 

[Mike Lister]

3 hours ago, NoDisplayName said:

 

Hi Mike!

Stock sale capital gains and assessable income question.

 

I bought a batch of XYZ for $1000 in 2022, and I sell all shares for $2000 this year, for $1000 capital gains.

 

I use $1000 to buy some other asset, and send $1000 to Thailand for monthly expenses.

 

How much, if any, of the $1000 brought in to Thailand would  be considered assessable income?

 

Assuming TRD will use purchase price rather than value Dec 31, 2023 for cost basis.

 

I want to claim the original $1000 investment returned in the stock sale was brought in, with the $1000 capital gain left in brokerage account and  reinvested.

All of it.

[JimGant]

On 6/19/2024 at 6:17 PM, TPDH said:

Let's say you had $1000 (portfolio value) in foreign stocks on the last day of 2023. And now, in mid 2024 your stock holdings are worth $2000. Does that mean you can still safely sell off $1000 of your stock holdings and remit it into Thailand tax free at any time? As it would be considered savings prior to 2024. 

Yes. The value of your financial accounts as of 31 Dec 2023 is what's exempt from Thai taxation upon remittance. So, any increase over this number in later years would not be exempt, to include cap gains and reinvested interest and dividends. Easy scenario to explain to TRD.

[NoDisplayName]

14 minutes ago, Mike Lister said:

All of it.

 

How is this arrived at, that the entire $1000 is assessable?

 

I have $1000 as the cost basis for the stock from 2022. (ignoring the value on Dec 31, 2023), and I have $1000 capital gain on the sale.

 

$1000 stays in the US, $1000 comes into Thailand.

How do we determine which money is brought into Thailand?

 

Do I choose which pot of money I bring over, or does TRD get to decide?