If you have NOT made a Will and Last Testament the law will determine what happens to your assets when you die. If you die and have assets in Thailand the Thai Civil and Commercial Code ‘Succession Book VI’ may determine what happens to your assets in Thailand. This shall mean that the assets will be distributed amongst the statutory heirs.

Under section 1629 Civil and Commercial Code there are 6 classes of statutory heirs and they are entitled to inherit in the following order:

1) descendants
2) parents
3) brothers and sisters of full blood
4) brothers and sisters of half blood
5) grandparents
6) uncles and aunts

The surviving spouse is a statutory heir, subject to the special provisions of Section 1635 Civil and Commercial Code.

So long as there is an heir surviving in one of the classes, the heir of the lower class has no entitlement to share in the assets. The one exception is where there is a descendant and a parent in which case they take an equal share (section 1630). If there is more than one heir in any one class, they take an equal share of the entitlement available to that class. The surviving spouse is a statutory heir but their entitlement depends on what other class of statutory heir exists. If there are surviving children of the deceased, the spouse and children take the estate between them. Therefore, if there are three children, then the estate is divided in to four equal shares.

Legal foreign wills are acceptable in Thai Courts subject to being translated and authorised at the Ministry of Foreign Affairs, but the legal procedure to enforce it can take a long time. A Thai will should make things easier (Forms of wills).

Trusts
Trusts created whether directly or indirectly by will or by any juristic act producing effect during lifetime or after death have no effect whatever (Section 1686 Civil and Commercial Code).

Bona fide gifts and inheritance are some examples of non-taxable income in Thailand.

Under section 93 of the Land Code: 'A foreigner who acquires land by inheritance as statutory heir can have an ownership in such land upon a permission of the Minister of Interior. However, the total plots of land shall not be exceeding of those specified in Section 87'.

Any foreigner who is married to a Thai national is under Thai law a statutory heir, however, the over fifty year old Section 93 of the Land Code must seen in combination with Section 86; 'aliens may acquire land by virtue of the provisions of a treaty giving the right to own immovable properties and subject to the provisions of this Code'. The last treaty was terminated in 1970 and there is currently no treaty with any country to allow a foreigner to acquire land and no minister will allow a foreigner to inherit land in Thailand. Under present law any foreigner who acquires land by inheritance will have to dispose the land within a reasonable period (meaning up to 1 year) to a Thai national. If the foreigner fails to dispose of the land the Director-General of the Land Department is authorized to dispose of the land and retain a fee of 5% of the sale price before any deductions or taxes.

Condominium acquired by inheritance
A foreigner who acquires a condominium unit by inheritance either as statutory heir or inheritor under will shall automatically have an ownership in such unit. However, if this ownership exceeds the foreign ownership ratio within such a condominium, it is required by law that the unit shall be disposed either by selling or giving to other Thai persons within 1 year from the date of acquisition of such condominium unit. If the foreigner fails to do so, the Director-General of Land Department shall have power to sell it on the foreigner's behalf ( section 19 of the Condominium Act).

Section 19 quinque The alien or juristic person as provided in Section 19 shall dispose of apartment in the following cases (1) 'When the alien or juristic person stipulated in Section 19 have acquired apartments by legacy in the capacity of statutory heir or inheritor under will or by other means as the case may be, and when include the apartment already held by such aliens or juristic persons stipulated in Section 19 exceeding the ratio prescribed in the first paragraph of Section 19 bis or not being in accordance with the second paragraph or the third paragraph of Section 19 bis;'

Property owned through a limited company
More complicated, should a foreign director in a Thai limited die the shares (and thus the assets) and control in the company will not automatically transfer to the heirs. Officially a general meeting of shareholders must be called and a shareholder decision is needed to appoint a new director (in practice this shall be a paper meeting). The shares in the company of the deceased must be transferred at the Ministry of Commerce, however, without the managing authorized director able to sign it is less simple. It may be recommended to have more than one director in the company and/ or someone authorized to sign on behalf of the company.

Succession of leasehold property
A lease agreement could be terminated on the death of the lessee as lease is in principal a personal right (Supreme Court). The remaining term and lease rights will not automatically transfer to your heirs. Generally, if this is not included in the lease agreement the land owner may refuse the transfer of the lease to the heirs. There is some doubt on the status of a succession clause in the lease, meaning if it is a real lease right that will transfer and be binding upon successors of the land. Tje lease and this clause has to be carefully drafted. The heirs have the right to claim performance directly from the lessor (section 374 Civil and Commercial Code). It may be recommended to including co-lessees in the lease agreement, who each can independently continue the lease in the event of death of one of the lessees.

back to top