This is a prickly topic as doing an internet search yields very little guidance. Perhaps you’re wondering whether you were simply used as a cash cow.
Let’s look at situations where you can get your gift back after your relationship turns sour or if you find that you have been swindled.
Lending money: a word of caution
Always document the loan. A verbal contract may be enforceable but tends to be hard to prove during conflicting recollection, particularly if the receiver gathers ‘witnesses’ to verify their position. Doing so also benefits the receiver as the loan is guaranteed even if the giver reconsiders or passes away.
Write down the loan terms and be sure to include key conditions such as the amount, interest rate (not over 5% per year), and repayment date. If preferable, you can ask them to write what they think the terms are in Thai and have them translated later. Once you’re both on the same page, you should both sign the paper.
If unsure about the repayment date, you can say that the term is extendable at the lender’s discretion.
Thailand’s laws on gifts
A gift is any property or money that is voluntarily given to another person with no expectations. This is different from marriage where matrimonial property is typically divided equally between spouses. A gift made during marriage, such as a dowry, is not revokable for ingratitude.
Under Section 531, you can claim back a gift if:
- the recipient committed a serious criminal offence against the giver;
- the recipient seriously defamed or insulted the giver, or
- the receiver refused to assist the giver in need despite being able to do so.
According to Section 533, a claim must be made within six months from the time the giver became aware of ingratitude. However, Section 535 states that some gifts are not revocable for ingratitude, particularly remuneration, encumbered gifts, gifts made under moral obligation, and gifts during marriage.
Revoking a gift
Theft, fraud, or assault can be considered reasonable grounds for revoking gifts. Elder abuse or neglect are also reasonable grounds. Both these situations are extremes and not commonly seen.
To revoke a gift due to ingratitude, you would need to prove that you were seriously defamed or insulted. Serious means not trivial or minor.
An insult is a violation of another’s honour through an offensive expression or action, while defamation is the act of spreading disreputable information about the giver to others. In one successful revocation, the receiver called their father (the giver) a “despicable dog”. Surely, you can imagine other incidents like this.
Arguably, parading multiple partners to common friends during a relationship could be considered an “insult”, while even more provocative statements such as the giver being a drunkard or bankrupt may be considered defamation and a cause for revoking a gift.
How Thailand taxes gifts
Gift taxes can be defined as taxation on the transfer of property, and taxpayers can opt to pay 5% gift tax on properties worth more than B10 million or B20mn. Both individuals, even non-Thai citizens, and juristic persons are subject to the gift tax.
There are, however, exemptions to the gift tax, particularly gifts worth less than B20mn given by a spouse or family member, or gifts worth less than B10mn from others.
As always, if you feel you have the need to revoke an ill-advised gift due to the reasons mentioned above, quickly contact us to guide you through this matter. Remember: the clock is ticking.
By Dr Paul Crosio
Partner, Silk Legal