4M baht taxable?

[chiang mai]

6 minutes ago, sometimewoodworker said:

I believe that is a correct statement.

Here we need to understand the definition and exactly how the remittance system is interpreted.

 

It is my belief that funds in transit through financial institutions such as banks (most travel this way) into Thailand are not considered remittances until they arrive at a persons account. This would make sense as otherwise it is virtually impossible to define. There are some who have a rabid belief that this is not the case.

 

If I am correct then since the funds are being transferred from overseas (via Wise but SWIFT would also work) into the account of the recipient and are specifically a gift, the recipient has no tax liability (see gift tax rules) the sender has no liability as they have not received a remittance.

 

So at exactly what point does an overseas remittance become a remittance?

I contend that it must be at the point of receiving into an account in Thailand.

 

We have some posters who believe that the funds in transit through the financial system have tax liabilities during the transit not at the point of receipt.

 

There are proposed law changes that will stop the Thai tax system from being a remittance one but until, or if, this ever happens it is my belief that I have a correct understanding and an overseas transfer as a gift is a legitimate legal tax minimisation strategy and it is non assessable for anyone in Thailand.

Really? 

 

If that inbound remittance, en-route to the giftee account, is not owned by the gifter (which clearly it can't be), who owns it, Mr Intransit! 

 

Funds remain owned by the sender or the receiver, custody many change but ownership of the funds doesn't change, just because a service is being used. 

 

 

[anrcaccount]

1 hour ago, chiang mai said:

 

 

NDN is entirely correct on this point. The remitted funds remain the property of the remitter/gifter, until they are deposited into the giftee's account, the giftee HAS to take possession before the gift is considered to be made. If the giftee's account is in Thailand and the remitter/gifter has remitted assessable income to that account, the gifter remains liable for tax on that remitted income, no matter that it is owned for 5 nanoseconds or five years. The assessability to tax by the receiver of the Gift, IS A SEPARATE ISSUE that is covered quite clearly by TRD Gift Tax rules.

 

Were the Gift made outside Thailand, the tax status of the giver of the gift would not be an issue. If the receiver of the gift were to remit the gifted funds from overseas, to their own account, the remittance might initially come under scrutiny for assessment, but could be avoided and explained by declaring it as a gift.

 

There is no issue with the Thai tax implications of receiving a gift, the Gift Tax rules explain the potential liabilities and benefits to the giftee quite well. The only issue is with the tax status of funds that are remitted and of the person who remits them. If the remitted funds are not assessable, there is no issue. If however the funds are assessable, the concept that transferring them to another person, also transfers substantial tax liabilities on those funds, which are then negated by Gift Tax rules, is alien. The concept is such a massive loop hole that its potential for abuse is sufficient to negate the Thai tax liabilities of any Thai tax resident with overseas income. Thai tax residents owning rental property overseas would no longer need to file Thai tax returns twice a year to declare rental income and pay Thai stepped tax rates on that income. All they would have to do is to remit the rental income to another person and claim it was a gift. Capital Gains realised overseas could be remitted to third parties at the rate of 10 or 20 million baht per year, based on their relationship and no Thai tax liability would arise, because it was claimed to be a gift. Freelance untaxed income, earned overseas, could be remitted to another person in Thailand and the income would remain untaxed, because it was a Gift............none of those things are a credible or viable scenario.

 

 

Writing a long spiel of verbiage opinion, doesn't change the professional advice received and shared.

 

Based on this, a gift (source of funds irrelevant) can be transferred from an overseas account directly to a Thai account, and the sender has no liability for for thai tax.

[chiang mai]

17 minutes ago, anrcaccount said:

 

 

Writing a long spiel of verbiage opinion, doesn't change the professional advice received and shared.

 

Based on this, a gift (source of funds irrelevant) can be transferred from an overseas account directly to a Thai account, and the sender has no liability for for thai tax.

Well good luck with it, let us know how it turns out for you! I asked you to provide proof from an independent source or quote the relevant TRD Code section and all you could do was post another thread that YOU deem to be expert professional advice..... you might as well have posted your holiday snaps for all the good that does!

 

We're done .

 

PS don't forget to leave your ritual sad emoji.

[Eloquent pilgrim]

13 hours ago, Sheryl said:

This part is unclear to me. The way he wrote it, sounds like he will remit it from his UK account via Wise directly into his wife's Thai account, never passing through his own Thai account.

 

If so then I would think it is  her remittance as she is the sole and immediate recipient.

 

Now, if it is in fact going to have to go first into his account in Thailand, a whole different matter and it is his remittance and taxable unless its is from a government pension (non-assessable in Thailand per UK-Thai DTA) or from savings accrued in UK prior to 2024.

 

As a small exercise in the logistics, last month I transferred £1,000 from my UK Santander account to my wife’s Bangkok Bank account, using Wise as the vehicle for the transfer; the funds arrived in my wife’s Bangkok bank account directly, and was not fed through my own Bangkok bank account.

 

 

[anrcaccount]

13 minutes ago, chiang mai said:

24 minutes ago, anrcaccount said:

 

 

Writing a long spiel of verbiage opinion, doesn't change the professional advice received and shared.

 

Based on this, a gift (source of funds irrelevant) can be transferred from an overseas account directly to a Thai account, and the sender has no liability for for thai tax.

Well good luck with it, let us know how it turns out for you! I asked you to provide proof from an independent source or quote the relevant TRD Code section and all you could do was post another thread that YOU deem to be expert professional advice..... you might as well have posted your holiday snaps for all the good that does!

 

Thanks, I will , along with many others who will take professional advice and use gifting , to best structure their affairs to minimise tax.

 

That is just common sense.

 

13 minutes ago, chiang mai said:

We're done .

 

PS don't forget to leave your ritual sad emoji.

 

I'm not in the habit of doing that.

 

What's sad here, is members who are sharing professional advice are being denigrated/dismissed, because it doesn't align with your opinions. 

 

 

[NoDisplayName]

40 minutes ago, sometimewoodworker said:

So at exactly what point does an overseas remittance become a remittance?

I contend that it must be at the point of receiving into a person’s (or companies) account in Thailand.

 

It's always a remittance, from start to finish.  The term describes the sum of money being sent, and/or describes the process of sending the money.

[chiang mai]

1 minute ago, anrcaccount said:

 

Thanks, I will , along with many others who will take professional advice and use gifting , to best structure their affairs to minimise tax.

 

That is just common sense.

 

 

I'm not in the habit of doing that.

 

What's sad here, is members who are sharing professional advice are being denigrated/dismissed, because it doesn't align with your opinions. 

 

 

No, what's sad here is that for the past six months you have challenged almost everything I have said, in addition to being convinced that I am the reincarnated Lister and conducting a smear campaign to convince others of your beliefs. You are obsessed with refuting anything I say and you grasp at straws, be it on the subject of Gift Tax, Capital Gains, Rental income or anything else....you need help. Now please, be a good chap and put me on ignore or simply go away.

[Barney13]

31 minutes ago, Eloquent pilgrim said:

 

As a small exercise in the logistics, last month I transferred £1,000 from my UK Santander account to my wife’s Bangkok Bank account, using Wise as the vehicle for the transfer; the funds arrived in my wife’s Bangkok bank account directly, and was not fed through my own Bangkok bank account.

 

 

What we need is for someone to have done this several times last year, and already filed Thai taxes this year. Maybe Jan 8th is too early, but I'm waiting for a guinea pig 🐷 

[CharlesHolzhauer]

1 hour ago, chiang mai said:

Really? 

 

If that inbound remittance, en-route to the giftee account, is not owned by the gifter (which clearly it can't be), who owns it, Mr Intransit! 

 

Funds remain owned by the sender or the receiver, custody many change but ownership of the funds doesn't change, just because a service is being used. 

 

 

Your comment on the 'en route issue' is, in my view, highly credible - stating that an inbound remittance (from overseas) remains the remitter's property until it is deposited into the recipient's (Thai) bank account. However, wouldn't the scenario change if the remitter initially transfers the funds to the recipient's overseas account (such as through WISE or OFX), and the recipient then independently remits the funds to their Thai bank account? To further strengthen this approach, engaging a lawyer to draft a gift contract - one for the transferor and one for the transferee - outlining the amount and purpose of the gift could add clarity and compliance. This approach could potentially align with the gift tax rule, don’t you think?

[chiang mai]

Just now, CharlesHolzhauer said:

Your comment on the 'en route issue' is, in my view, highly credible - stating that an inbound remittance (from overseas) remains the remitter's property until it is deposited into the recipient's (Thai) bank account. However, wouldn't the scenario change if the remitter initially transfers the funds to the recipient's overseas account (such as through WISE or OFX), and the recipient then independently remits the funds to their Thai bank account? To further strengthen this approach, engaging a lawyer to draft a gift contract - one for the transferor and one for the transferee - outlining the amount and purpose of the gift could add clarity and compliance. This approach could potentially align with the gift tax rule, don’t you think?

Yes, that's better, that would constitute an overseas or offshore transfer or gift which would remove the gifter from the tax equation. I can't be certain however about the fact the gifter was both Thai tax resident and physically resident in Thailand when the gift was made or whether that affects things. For it to be certain and squeaky clean, the gifter would make the gift whilst overseas.

[CharlesHolzhauer]

2 minutes ago, chiang mai said:

the gifter would make the gift whilst overseas.

That would be a bummer 😀. Before proceeding with the gifting process, it might be wise to consult one of the Big Four accounting firms to ensure clarity and certainty on compliance with tax regulations.

[chiang mai]

Just now, CharlesHolzhauer said:

That would be a bummer 😀. Before proceeding with the gifting process, it might be wise to consult one of the Big Four accounting firms to ensure clarity and certainty on compliance with tax regulations.

I have always agreed that anyone using the Gift Tax rule should seek professional advice, the question is, where best to obtain it. There is anecdotal evidence that even the large tax firms are unsure/confused/uncertain about the correct application of Gif Tax rules, much of it appears to be belt and braces covering every possible angle. Maybe that's the right thing, I don't  know. The problem stems from Gift Tax being the domain of the wealthy and the subjective views of different offices and the degree to which influence can be brought to bear. All of which goes some way towards explaining why the safest route is to make the gift overseas and allow the gifter to make the remittance.

[anrcaccount]

16 minutes ago, CharlesHolzhauer said:

Before proceeding with the gifting process, it might be wise to consult one of the Big Four accounting firms to ensure clarity and certainty on compliance with tax regulations.

 

Members have done exactly that already, and kindly shared their clear professional advice on this thread (starting on page 1), and other threads (linked to from this one on earlier pages). 

 

 

 

[CharlesHolzhauer]

25 minutes ago, chiang mai said:

I have always agreed that anyone using the Gift Tax rule should seek professional advice, the question is, where best to obtain it. There is anecdotal evidence that even the large tax firms are unsure/confused/uncertain about the correct application of Gif Tax rules, much of it appears to be belt and braces covering every possible angle. Maybe that's the right thing, I don't  know. The problem stems from Gift Tax being the domain of the wealthy and the subjective views of different offices and the degree to which influence can be brought to bear. All of which goes some way towards explaining why the safest route is to make the gift overseas and allow the gifter to make the remittance.

One would have thought that at least one of the Big Four accounting firms could provide a definitive answer, given that they likely have wealthy Thai clients who engage in gifting to their spouses or relatives. Paying for such advice, only to later discover that the TRD rejects the approach and imposes taxes and fines to the fullest extent, would be highly frustrating.

Additionally, do you think the gifter needs to be physically present in the country where the gift originates, or could they be in any country except Thailand for the process to align with the rules?

[chiang mai]

6 minutes ago, CharlesHolzhauer said:

One would have thought that at least one of the Big Four accounting firms could provide a definitive answer, given that they likely have wealthy Thai clients who engage in gifting to their spouses or relatives. Paying for such advice, only to later discover that the TRD rejects the approach and imposes taxes and fines to the fullest extent, would be highly frustrating.

Additionally, do you think the gifter needs to be physically present in the country where the gift originates, or could they be in any country except Thailand for the process to align with the rules?

Solely my opinion is that being not resident in Thailand when the gift is made, probably is the safest but that's more about intuition than anything else.

[Barney13]

14 minutes ago, CharlesHolzhauer said:

One would have thought that at least one of the Big Four accounting firms could provide a definitive answer, given that they likely have wealthy Thai clients who engage in gifting to their spouses or relatives. Paying for such advice, only to later discover that the TRD rejects the approach and imposes taxes and fines to the fullest extent, would be highly frustrating.

Additionally, do you think the gifter needs to be physically present in the country where the gift originates, or could they be in any country except Thailand for the process to align with the rules?

 

11 minutes ago, chiang mai said:

Solely my opinion is that being not resident in Thailand when the gift is made, probably is the safest but that's more about intuition than anything else.

So every year the husband gifts he has to vacate Thailand for 6 months? Married couples who live in Thailand TOGETHER can gift tax free up to 20M baht, surely it is a benefit of being married, or else why have the rule?

[chiang mai]

3 minutes ago, Barney13 said:

 

So every year the husband gifts he has to vacate Thailand for 6 months? Married couples who live in Thailand TOGETHER can gift tax free up to 20M baht, surely it is a benefit of being married, or else why have the rule?

The Gift Tax rule allows gifts to assessendents, descendants and others, marriage is only one part of the picture.

[CharlesHolzhauer]

1 hour ago, chiang mai said:

For it to be certain and squeaky clean, the gifter would make the gift whilst overseas.

I fully understand that your responses to my posts represent your personal opinion, but I hold your perspective in high regard and greatly value your insights.
I don’t mean to be overly particular about your opinion, but would you kindly clarify? Based on your previous posts, I was under the impression that Thai tax residents could also make gifts, provided they are not physically in Thailand at the time of gifting. For instance, instead of traveling to the country where the gift originates, could they simply go to a nearby country and initiate the gift transfer online from there?

[Barney13]

3 minutes ago, CharlesHolzhauer said:

I fully understand that your responses to my posts represent your personal opinion, but I hold your perspective in high regard and greatly value your insights.
I don’t mean to be overly particular about your opinion, but would you kindly clarify? Based on your previous posts, I was under the impression that Thai tax residents could also make gifts, provided they are not physically in Thailand at the time of gifting. For instance, instead of traveling to the country where the gift originates, could they simply go to a nearby country and initiate the gift transfer online from there?

It's about residency, not where you are on any given day

[chiang mai]

3 minutes ago, CharlesHolzhauer said:

I fully understand that your responses to my posts represent your personal opinion, but I hold your perspective in high regard and greatly value your insights.
I don’t mean to be overly particular about your opinion, but would you kindly clarify? Based on your previous posts, I was under the impression that Thai tax residents could also make gifts, provided they are not physically in Thailand at the time of gifting. For instance, instead of traveling to the country where the gift originates, could they simply go to a nearby country and initiate the gift transfer online from there?

I don't know the answer to that and couldn't realistically begin to guess, sorry. 

[chiang mai]

2 minutes ago, Barney13 said:

It's about residency, not where you are on any given day

....it's also about remittance, which depends on where you are when the remittance is made, as in the case of the recent discussion.

[Barney13]

4 minutes ago, chiang mai said:

....it's also about remittance, which depends on where you are when the remittance is made, as in the case of the recent discussion.

So as a Thai tax resident, I can go to the UK for a day and remit tax free?

[Yumthai]

48 minutes ago, chiang mai said:

....it's also about remittance, which depends on where you are when the remittance is made, as in the case of the recent discussion.

The physical location of an individual is totally irrelevant while remitting (wire transfer) from overseas into Thailand. What matters is tax residence status.

[chiang mai]

1 minute ago, Yumthai said:

The physical location of an individual is totally irrelevant while remitting (wire transfer) from overseas into Thailand. What matters is tax residence status.

Do try and keep up YT! 

 

The earlier discussion was about a foreign Thai tax resident who made a remittance to his Thai based wife, from his overseas account and whether or not his remittance was assessable on him, because he owned the funds in Thailand, until they were deposited into his wifes account. Sooooo, no, physical location of an individual is not totally irrlevent.

[chiang mai]

I've already reported confused 26 emoji's in three minutes, I hope this is not you again YT!

[Yumthai]

3 minutes ago, chiang mai said:

Sooooo, no, physical location of an individual is not totally irrlevent.

It is. Do your homework before clowning further yourself.

[J Branche]

19 hours ago, Barney13 said:

I want to remit 4M baht from my UK personal pension to my wife's Thai bank account via wise. Technically when this cash crosses the 'border' it's my remittance, therefore tax to be paid. I also understand that I can 'gift' my wife up to 20M baht per year tax free. Does this mean tax free for her only? Any clarification/help with this appreciated.

I don't have time to sort through previous posts.

 

Since you didn't clarify who provides the pension I'm assuming it's the State Pension According to: expattaxthailand.com/understanding-uk-pensions-tax-thailand
September 17, 2024
"classed as ‘foreign sourced income’ and fully taxable in Thailand when remitted. There is no specific relief under the UK-Thailand Double Taxation Agreement for state pensions, making them fully assessable under Thai tax laws."

If you remit to your wives account I believe the tax liability will be your wife's.  The wife has full control over what happens to the money.

Gift of this size seems suspicious to me. Additionally you can receive No benefit and receive none of the money in return.
She can't buy you anything for your exclusive use.

CONSULT with a tax professional as POR 162 may allow the portion earned prior to Jan 1 2024 to be remitted with no additional taxes owed.

[Johno57]

20 hours ago, Barney13 said:

I want to remit 4M baht from my UK personal pension to my wife's Thai bank account via wise. Technically when this cash crosses the 'border' it's my remittance, therefore tax to be paid. I also understand that I can 'gift' my wife up to 20M baht per year tax free. Does this mean tax free for her only? Any clarification/help with this appreciated.

In my opinion you would be taxed possibly in your country unless it was less than the gifting limit...but in thailand you would be alright if not a tax resident (180 days in thailand ) and not over 20m baht and your wife also but you would need clarification..and the rules change constantly.. 

[jesimps]

20 hours ago, Jingthing said:

If I understood him correctly, he's remitting from a foreign account in his name directly to a Thai account in his wife's name. I think he's excluded from tax in the case. If it hit his named account in Thailand for one minute, then moved to his wife's account, then taxable.

So if I sent all my yearly living expenses from the UK direct to the wife's account here, it wouldn't be taxable? I can't see that being the case. 

[helloagain]

20 hours ago, Liverpool Lou said:

That tax-free status applies only to the recipient of the gift. i.e. your wife,   the donor spouse doesn't get taxed on the gift.   

Remitting funds into the country from overseas is a completely different matter.  

Unless he had to full amount in his country on or before 31st Dec 2023.