Gifting the Spouse

[NoDisplayName]

On 11/19/2024 at 8:13 PM, sometimewoodworker said:

However just because you give funds to your wife outside Thailand very probably has no relevance to the TRD. Once she remits those funds to Thailand they are very probably taxable as at that point she is remitting her money.

 

Wifey called the TRD help line #1161, NOT a local office.

 

Explained I want to gift her a million baht every year, either for Xmas or birthday, into her offshore account in her name.  She'll keep it there, and will bring it into Thailand herself when needed, maybe in 5 years, maybe in 10 years.

 

TRD rep says she 'might' have to show the source of funds when she brings it in.  A letter from me to my wife, signed and dated, declaring each gift would suffice.

 

Will do more research, of course, but plan will be starting in 2025, 1 million baht equivalent annually into her new brokerage account (Schwab or Fidelity).  Print and sign a letter indicating a gift from spouse.

 

She can invest in capital appreciation ETF's that pay little or no dividends.  According to Us-Thai DTA, capital gains are tax-free, dividends taxed at 15%. 

 

I don't have to worry about exceeding my TEDA when remitting cash to then gift to her, or having to explain the source of funds.

 

She can earn a higher return than fixed account interest, and won't have to pay the obscene fees charged by Thai banks for mutual funds.

 

The only remaining question is how will her remitted funds be categorized.  Assuming her gift has increased by 20% or 30%, and she remits a portion of her account balance, how much gift and how much income did she remit?

 

 

[Neeranam]

On 11/19/2024 at 8:13 PM, sometimewoodworker said:

The 20 million is from one person (spouse) it does not limit the amount that can be received tax free, just the amount from a single donee.

What about children?

[Neeranam]

I send my wife Bitcoin and she can exchange it to cash P2P on many exchanges, including Binance. There are also agents that deliver cash to your home. 

For the last 3 years, my mother has send my kids Bitcoin for their Xmas presents.

[sometimewoodworker]

5 hours ago, Neeranam said:

What about children?

Gifting children is a rather strange idea, but as long as it’s legal in your jurisdiction and all parties agree and it’s in the interests of the children it is probably OK. 😉 

[sometimewoodworker]

However gifts from gifts from (to?) ascendants, descendants or spouse are tax free up to 20 million 

[sometimewoodworker]

On 12/25/2024 at 12:14 PM, NoDisplayName said:

The only remaining question is how will her remitted funds be categorized.  Assuming her gift has increased by 20% or 30%, and she remits a portion of her account balance, how much gift and how much income did she remit?

That is a problem of the commingling of funds.

The simplest way is to maintain the principal of the gift amount in 1 account and pass all increases of any kind to a second account.

 

If it is possible to gift from one foreign account to another foreign account held by your wife and be in compliance with the TRD rules on the tax free status of the funds when remitted is not at all clear, I can find nothing in writing on the rd.go.th website.

 

Also any remittance will be governed by the rules in force in the year that it is remitted, so holding funds outside Thailand has the potential of the rules changing so making them assessable, even if they are actually not assessable this tax year 

 

That you or your wife had a conversation with a TRD officer is a good indication. It certainly is no guarantee, you need to get a written opinion from the TRD to have a reasonable confidence that the verbal opinion is correct. It is all too easy to claim a misunderstanding occurred and that the remittance is all assessable income, this would make a 20% gain into a net loss.

[MangoKorat]

On 11/19/2024 at 1:45 PM, Yumthai said:

 

Don't bother, I'll reply.

 

https://www.thailandlawonline.com/civil-and-commercial-code/521-536-gift-is-a-contract

 

Section 521. A gift is a contract whereby a person, called the donor, transfers gratuitously a property of his own to another person, called the donee, and the donee accepts such property.

 

A gift is a contract by itself.

 

Section 525. The gift of a property the sale of which must be made in writing and registered by such competent official is valid only when so made and registered by the competent official. In such case it is valid without delivery.

 

Section 526. If a gift or a promise for a gift has been made in writing and registered by the competent official and the donor does not deliver to the donee the property given, the donee is entitled to claim the delivery of it or its value, but he is not entitled to any additional compensation.

 

Both sections 525 and 526 imply gift has not to be necessarily made in writing, granted that a bigger stack of papers could ease things if audited.

 

Can I just point out that thailawonline is not an official source. Its a private law firm offering paid advice.

[MangoKorat]

I don't have time  to find the source right now but I remember doing plenty of reading on this when the new tax regulations were first mentioned.  I'm almost certain that I came across an official source that stated you cannot get around the new tax requirements by gifting money to your wife.

[sometimewoodworker]

14 minutes ago, MangoKorat said:

I don't have time  to find the source right now but I remember doing plenty of reading on this when the new tax regulations were first mentioned.  I'm almost certain that I came across an official source that stated you cannot get around the new tax requirements by gifting money to your wife.

When, or more likely if, you can find an official statement that supports your statement it will directly contradict the opinions of all the professionals I have talked to or read. However I suspect that there were conditions in the question or the opinion that you don’t remember 

 

Under the present regulations and the understanding of those professionals you can certainly reduce your tax liability and your wife doesn’t incur a tax liability, if you and your wife are careful of the uses she makes of the gifted funds.

 

Do the gift badly or use it badly and you will both have a tax liability 

[The Cyclist]

17 minutes ago, MangoKorat said:

I don't have time  to find the source right now but I remember doing plenty of reading on this when the new tax regulations were first mentioned.  I'm almost certain that I came across an official source that stated you cannot get around the new tax requirements by gifting money to your wife.

 

My basic and limited understanding from reading last year. Was that these ' Gifts ' had to be for very specific things ( 4 I think ) and not just a ' heres a wedge of cash as a gift ' to try and beat the tax,an.

[NoDisplayName]

6 minutes ago, The Cyclist said:

 

My basic and limited understanding from reading last year. Was that these ' Gifts ' had to be for very specific things ( 4 I think ) and not just a ' heres a wedge of cash as a gift ' to try and beat the tax,an.

 

That appears to be the point of allowing 20 million baht gifts annually to your spouse.  Laws were written by the rich for the rich to protect their wealth.  I can't see 20 million baht gift tax exemptions being claimed by 99% of the population.

 

From what I read, spousal gifts don't need a specific reason, and the only qualification is that the donor does not have control over the gift once given.  If the gift is used for daily expenses, the giver is receiving personal benefits.  If the gift is for honey-bunny to buy a house or car in the receiver's name, it's still a gift even if the donor lives there.

 

The "4 things", if I recall, had something to do with gifts to/from trusts.

[The Cyclist]

1 minute ago, NoDisplayName said:

From what I read, spousal gifts don't need a specific reason, and the only qualification is that the donor does not have control over the gift once given.

 

Buying property was 1 of the reasons.

 

And it is ' Not Control ' but rather ' Must not benefit '

 

So my reading of that ( and it was over a year ago ) is that you could bung your wife 20 Million to buy a property, you as the giver of the gift, could never live in it.

 

And I also seem to recall that that these gifts were being referred to as being gifted within Thailand and not monies being gifted from overseas.

[MangoKorat]

53 minutes ago, sometimewoodworker said:

When, or more likely if, you can find an official statement that supports your statement it will directly contradict the opinions of all the professionals I have talked to or read. However I suspect that there were conditions in the question or the opinion that you don’t remember 

I've no intention of trying to find it right now. I just remember seeing that gifting looked like a possibility  - talking strictly on a circumvention basis, only for that thought to be struck down in flames by something I read later. I thought it was official but I wouldn't swear to that.

 

In any case, anyone thinking of gifting should seek professional advice at the time.

[gargamon]

Who are you gifting her to? What does she look like?

[Neeranam]

6 hours ago, sometimewoodworker said:

Gifting children is a rather strange idea, but as long as it’s legal in your jurisdiction and all parties agree and it’s in the interests of the children it is probably OK. 😉 

Good to know, thanks.

I think it's stranger gifting a wife. 

I send money to kids(adults) for educational purposes, cars, etc.

[KhunHeineken]

On 12/26/2024 at 5:17 PM, Neeranam said:

Good to know, thanks.

I think it's stranger gifting a wife. 

I send money to kids(adults) for educational purposes, cars, etc.

Perhaps you can "gift" one of the kids a car, and they let you drive it, if you know what I mean. 

[NoDisplayName]

UPDATE for anyone interested.

 

I just called Schwabb International.  Schwabb will open accounts for foreigners not resident in the US.  No SSN or ITIN is needed.  Thai passport for identification, and utility bill to show residence.  Our house insurance with wife's name/address in English will do.

 

Can apply online, upload scans of PP and proof of residence, with 4-5 days processing.

 

These accounts previously required a minimum $25K to open, but due to competition they can now be opened with $0, no minimum balance.  Can open sub-accounts to separate funds, or to hold gains separate from original investments.

 

These are Schwabb accounts held in the USA, so ACH transfers may be possible.  Depends on if your bank/broker will send to an account not under your name.

 

Must fill out a W8-BEN to claim US-Thai DTA benefits.  Taxes withheld at source on dividends and interest at 15%.  No tax on capital gains.

 

No US tax return is required.  No ITIN needed.

 

 

So I can give a gift to my wife, not taxed by the US, not taxed by Thailand.  She can purchase in her individual brokerage account ETF's for capital appreciation that pay minimal or no dividends, reducing any US withholding tax. 

 

When she does remit to Thailand, she will have documentation for all of her many gifts if ever questioned, which should be only if audited.  I don't believe there is a requirement to declare gifts unless audited, but I won't be around to see it.

[NoDisplayName]

Aaaaaaaaaaaaaaaand just called Fidelity.

No, they do not open accounts for non-resident foreigners.

 

Guess we'll be going with Schwabb.

Will have to ACH or SWIFT funds from my account at Fidelity.

 

But.......the rep.....didn't know......what.....SWIFT.....means!!!!

 

Sad.

Bigly, bigly sad.

 

 

Then went into the system to try setting up transfers out of Fidelity, but OTP is required.

 

Called back to Fidelity, different rep in "Money Movement", and they ADDED MY THAILAND TRUE NUMBER AS MY CELL NUMBER, keeping my US number as the home number.  Rep tells me this needs 24 hours to update, then can be used to receive OTP codes.

 

Bigly better!