My wife has a British passport, and always uses it to travel to Thailand (and other places). She has deliberately let her Thai Passport lapse. She does, however keep her ID Card in date.
spitfire is correct when he says
dual citizenship for Thais is not possible after a certain age
A decision has to be made at age 21 regarding which nationality they wish to retain.
We understand the regulations, and when we retire to Thailand (eventually), we know that my wife will have to let her British nationality lapse. She will purchase land using her ID Card as a Thai National.
Would British citizenship, affect land and house ownership could there be any tax implications ?
It isn't permitted - just don't go there. I know you have land etc already - providing somebody doesn't shop you, nobody will know any different. I know dozens of couples in the UK in a similar situation. They also understand that if they move to Thailand full time, they will have to let their naturalisation lapse.
You will also find that there are difficulties maintaining 2 passports. When you renew the Thai Passport, you need to get the UK Indefinite visa transferred. You will find that you request will be refused on the grounds that you already have a British Passport. In this Big Brother age with the Home Office being all joined up - it's a simple computer enquiry. I've seen people ignore this advice from me recently and lose their fee as well - a refusal is a refusal etc.
Would Thai officials treat her differently?
You don't tell them - it's illegal.
I hope this helps. If you need any further clarification, please ask.