Shares worth nearly 80 billion baht have been transferred by affluent Thais to their heirs before the introduction of inheritance and gift taxes today.
Executives and major shareholders of more than 160 listed companies transferred their shares to children, spouses, parents, siblings, cousins and holding companies from July 2014 to last Friday, according to a Securities and Exchange Commission (SEC) reports on changes of executives' securities holdings.
The Finance Ministry's serious effort to push the inheritance and gift taxes -- a levy on assets passed by donors when they are still alive -- was apparently anticipated since July 2014 and triggered a wave of wealth transfers.
Under the law, inheritors of a legacy will be taxed 10% of the amount exceeding 100 million baht, though the tax rate will be halved to 5% if beneficiaries are donors' direct ascendants or descendants.
If the person who created the will is still alive when a bequest worth over 20 million baht a year is made to heirs who have a direct blood relationship, recipients will be liable to 5% tax for the amount exceeding 20 million.
Inheritors with no direct blood line to the donor will be taxed a flat 5% for a legacy worth over 10 million baht a year.
Spouses are exempt from inheritance and gift taxes.
Taxable assets include property, securities such as treasury bills, bonds, shares and debentures as well as investment units, deposits, registered vehicles and financial assets to be described in royal decrees.
Inheritors liable to pay inheritance tax will be charged interest of 0.5% per month in cases where they request taking more than two years to pay their tax bill in instalments.
Prasert Prasarttong-Osoth, the founder of Bangkok Dusit Medical Services Plc (BDMS) and Bangkok Airways Plc, transferred his stakes in both listed companies with a combined worth of over 10 billion baht to his wife and children, the SEC report said.
Mr Prasert, the richest businessman on the Thai stock market last year, transferred 9.96 billion baht worth of BDMS shares to his wife and children and another 868 million baht worth of Bangkok Airways shares to a daughter.
Wichai Thongtang, dubbed the take- over king, transferred 173 million shares of BDMS worth 3.75 billion baht to his children.
BDMS vice-chairman Chuladej Yossundharakul also passed his shareholding in the luxury hospital chain worth 4.16 billion baht to his family, the report said.
Ichitan Group Plc president and chief executive Tan Passakornnatee transferred 90 million shares to his three children with a combined value of 1.1 billion baht, while his wife Ing Passakornnatee also gave 60 million shares valued at nearly 1 billion baht to her two children.
Financial planner Teera Phutrakul said transferring property and assets to a company can help slim down costs because the transaction will be taxed only one time but transferring wealth directly to heirs in each generation will be taxed every time.
Shifting assets to a company will cost 5% of asset value, he said.