Transfer condo from company name to Thai name

[Eneukman]

As I've mentioned in other topics, I'm returning to Scotland with my Thai wife in a few months. 

 

My condo is currently held in a company name (the Thai shareholders are my wife and her elder son). With the surplus of condos on the market just now (I live in Jomtien) it's proving difficult to sell plus, I think,. one agent is more interested in their commission than a sale at a reasonable price. If I don't sell by the time my wife has her visa (still got to face that hurdle!), I'll put it up for rent and / or sale. However, I don't really want the tax implications of having to report foreign income to the UK tax authorities so I am thinking about transferring the condo into my wife's name (I haven't told her this yet!).

 

Can anyone give an indication of the cost of this - transfer fees, closing the company, agents' fees etc? Assume a value for the condo if 2 1/2 million baht though I realise that the transfer fees will be based on the value put on the condo by the Land Office, which hopefully will be lower.

 

Thanks,

 

Alan

[Peterw42]

For what purpose transfer to your wife ? That would constitute a sale at the land office and taxes/transfer payable, then when you finally sell it taxes and transfer payable again. Meanwhile any rental income can be paid into a thai account or your wifes account, with no income to declare in UK.

Transfer and taxes usually around 3-5% with variables, time property is owned, personal tax liability etc. Some legal websites have online transfer calculators or the land office can give you an exact figure. Agent commission around 3-5% also.

Edited February 4, 2017 by Peterw42

[blackcab]

Why would you be reporting rental income in the UK? The owner of the property is a Thai company, not you. Any income is the property of the company.

 

Personal gain only occurs when the shareholders are given dividends. Who, in any event, are Thai people.

 

In my understanding there is nothing forv go to report. 

[Eneukman]

I agree that any rental income would be company income. However, if I subsequently transferred some of that rental income to the UK I am certain that HMRC would want to tax it as my income though the rate may only be 7 1/2% (my dividend income is already in excess of £5000) rather than 20%. If the condo was in my wife's name, the income would be added to any income she may earn in Scotland and if her total income was less than £11,500 (effective 6th April 2017), there would be no tax to pay. 

 

I may need to phone HMRC and see what they have to say. 

 

Alan

[Peterw42]

UK government would just see money coming from Thailand into your wife's account. They dont know if you, your wife or a company owns the condo. Conversely, if your wife owned the condo and money came into your account it would be considered your income for tax.

[blackcab]

I believe some Thai people have income/dividends paid into their Thai bank account. They then use their Thai bank card/credit card for purchases while they are abroad and manage everything with Internet banking. They pay foreign transaction fees to the bank for the privilege.

 

That way what is in Thailand stays in Thailand. I'm not sure how or if they declare that to HMRC as every case is different.

[Eneukman]

3 hours ago, blackcab said:

I believe some Thai people have income/dividends paid into their Thai bank account. They then use their Thai bank card/credit card for purchases while they are abroad and manage everything with Internet banking. They pay foreign transaction fees to the bank for the privilege.

 

That way what is in Thailand stays in Thailand. I'm not sure how or if they declare that to HMRC as every case is different.

If you live permanently in the UK, your worldwide income is liable to income tax and therefore any rental income would be liable to UK income tax. Any tax that may be payable in Thailand could be offset against any UK tax liability though I think that after deducting expenses - agents' fees, condo management fees, repairs and the accountants fees for preparing the annual accounts, the income would probably be close to or below the level at which income tax starts to be payable in Thailand. 

 

Omitting to report any income in Thailand to the tax authorities is not an option. If they find out after you've died, they will go back 5 or 6 years and demand any unpaid tax be paid together with interest and penalties. The penalties can be mitigated depending on how co-operative your executor is. They can then ask the beneficiaries of the estate to make a voluntary payment towards any unpaid tax for previous years though most people will refuse to do so. If they find out while you are still alive, they can go as far back as they please!

 

Alan

[Eneukman]

13 hours ago, Peterw42 said:

UK government would just see money coming from Thailand into your wife's account. They dont know if you, your wife or a company owns the condo. Conversely, if your wife owned the condo and money came into your account it would be considered your income for tax.

HMRC would want to know the source of the money though and would try to tax it. One advantage of putting the condo into my wife's name is that if she was able to work part-time for the minimum wage, the rental income would probably keep her below £11,500 so she would have no liability to income tax. 

 

Alan

[blackcab]

13 minutes ago, Eneukman said:

If you live permanently in the UK, your worldwide income is liable to income tax and therefore any rental income would be liable to UK income tax. Any tax that may be payable in Thailand could be offset against any UK tax liability though I think that after deducting expenses - agents' fees, condo management fees, repairs and the accountants fees for preparing the annual accounts, the income would probably be close to or below the level at which income tax starts to be payable in Thailand. 

 

Omitting to report any income in Thailand to the tax authorities is not an option. If they find out after you've died, they will go back 5 or 6 years and demand any unpaid tax be paid together with interest and penalties. The penalties can be mitigated depending on how co-operative your executor is. They can then ask the beneficiaries of the estate to make a voluntary payment towards any unpaid tax for previous years though most people will refuse to do so. If they find out while you are still alive, they can go as far back as they please!

 

Alan

 

In that case don't forget to pay Par See Rong Ruan at the district office each year. It's currently the time to declare last year's earnings. There is a formula to work out the tax payable. For a fully occupied unit with no void periods you will pay approximately 1 month of income. Gross rental income, not net profit. 

 

This tax applies even if a company director is living in the property and they are not making rental payments to the company.

[Eneukman]

On 2/5/2017 at 11:02 AM, blackcab said:

 

In that case don't forget to pay Par See Rong Ruan at the district office each year. It's currently the time to declare last year's earnings. There is a formula to work out the tax payable. For a fully occupied unit with no void periods you will pay approximately 1 month of income. Gross rental income, not net profit. 

 

This tax applies even if a company director is living in the property and they are not making rental payments to the company.

 

I have accountants who prepare the company accounts each year and pay a small amount of tax at the same time. I'll let them handle this. Any tax paid in Thailand can be (should be!) offset against any tax payable in the UK.

 

I spoke to one of the condo rental agents a few days ago and she suggested that to transfer the condo into my wife's name, including closing the company, would cost around 175,000 baht.

 

Alan