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 January 29 this year, 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 B100 million, 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 B20 million a year is made to heirs who have a direct blood relationship, recipients will be liable to 5% tax for the amount exceeding B20 million.
Inheritors with no direct blood line to the donor will be taxed a flat 5% for a legacy worth over B10 million 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 B10 billion to his wife and children, the SEC report said.
Mr Prasert, the richest businessman on the Thai stock market last year, transferred B9.96 billion in BDMS shares to his wife and children and another B868 million in Bangkok Airways shares to a daughter.
Wichai Thongtang, dubbed the take-over king, transferred 173 million shares of BDMS worth B3.75 billion to his children.
BDMS vice-chairman Chuladej Yossundharakul also passed his shareholding in the luxury hospital chain worth B4.16 billion to his family, the report said.
Ichitan Group Plc president and chief executive Tan Passakornnatee transferred 90 million shares with a combined value of B1.1 billion to his three children, while his wife, Ing Passakornnatee, also gave 60 million shares valued at nearly B1 billion 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.
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