The Revenue Department plans to adopt the prime minister's proposal to amend the inheritance tax law to reduce economic inequality, says a department source who requested anonymity.
The source said the guidelines for the amendment have three focal points.
First, the inheritance tax would be applied to assets worth more than 100 million baht. However, there is a discussion as to whether the threshold should be adjusted to suit changing conditions in the future, said the source.
Second, the types of assets to be taxed would need to be redefined by royal decrees.
Third, the inheritance tax will not cover properties that are left in a will to the spouse of the deceased in order to ease the burden for the grieving party.
The exemption of inheritance tax for assets worth 100 million baht or less could create a loophole for tax evasion. For example, a person with property valued at 300 million baht might leave assets in a will to his or her spouse and heirs each worth 100 million baht or less. With each of the asset portions worth 100 million baht or less, there would be no inheritance tax burden, while assets left to a spouse are exempt from the levy.
The inheritance tax would be calculated based on an individual's net wealth, which is the value of assets received minus any debts inherited. Net wealth valued at 100 million baht or less would be exempt from the tax, while any excess would be taxed at a fixed rate of up to 10%, said the source.
The levy will apply to registered assets, including residential properties, land, vehicles, bonds, equities, and deposits at financial institutions, said the source.
Beneficiaries, including individuals, government agencies and juristic persons, or international organisations that fall under Thailand's obligations to the UN or international law, are exempt from the tax if they express an intent to use the assets inherited for the benefit of religious, educational or charitable endeavours.
The source said the inheritance tax was introduced in 1933, but was abolished because of a low level of collection. The government re-enacted the law in 2015, with a few hundred million baht being collected per year, which is considered a very small amount compared with the amount of inheritance passed on to heirs.