sending money back to the uk

[fabman]

my soon to be thai wife is hopefull of selling some land soon and we would like to send some of the money back to england to pay off the rest of the mortgage on my house there .

It would be about 1million baht . is the best way of doing this directly through the bank ? i'm not sure how much the charges would be ...

thanks for any help

[advocate]

Since it is a Thai national sending the money abroad, she should not have any problem as long as the declared value of the sale at the land office is at least eqaul to the amount you want to send and all taxes are paid. Better to convert the Baht to Pounds here as the exchange rate should be more favorable.

If she declares the sale to be less than the amount she wants to send, the bank may not allow the transfer as there is no proof of the source of the money or that taxes have been paid in full.

[Albie Quick]

I'd have thought that you'd get better value for money by changing your baht in the UK. Last time I looked it was around 45 baht to the pound as opposed to 47-ish over here.

[Big Boy]

Albie, that would be their 'Sell' rate. If you look, the 'Buy' rate will be something ridiculous like 55 Baht to the Pound. British banks do nothing for nothing.

[fabman]

thanks , do you have any idea how much the tax would be ? its her family that are selling the land and she will get a percentage of it.

[advocate]

If they have owned the land less than 5 years, the total taxes will be just over 5%.

If they have owned the land longer than 5 years they are eligible to pay the discounted rate. I can't recall how much the discounted rate is.

[fabman]

thanks advocate , i might have trouble though convincing the rest of her family that they have to pay 5 % tax on the 10 million baht ( possibly ) so that she can send me just 1 million back to the uk i assume if they just kept it in a thai bank they wouldnt have to declare any tax ?

cheers

[advocate]

Taxes for land are paid directly at the land office at the time of registering the transfer to the new owner.
If you don't pay the tax, the new owner will not receive Chanote, which is the land title. So no, you cannot avoid paying the tax at the time of sale.

Often the seller and purchaser agree to split all land office taxes as a condition of sale.

Many people misrepresent the purchase price to the land office to avoid paying all of the tax due. The land office has a minimum amount they will allow you to declare as the purchase price depending on where the land is located.

Splitting the tax with purchaser is legal, misrepresenting the purchase price to the land office is obviously illegal, but very prevalent.

[advocate]

For example. if the land has been owned for less than 5 years, total taxes would be just over 500,000 Baht.
Thais will often declare half the sale price, in this case reducing it to 5,000,000, reducing the tax to about 250,000 Bt.
Splitiing this bw the seller and purchaser reduces the purchaser tax payment to about 125,000 Bt.

If the land has been owned more than 5 years, this will reduce the tax even further. Possibly to about 75,000 Bt.

[PET]

I'd have thought that you'd get better value for money by changing your baht in the UK. Last time I looked it was around 45 baht to the pound as opposed to 47-ish over here.

As at close of business Friday the Thai banks would convert your Thai Baht at an average rate of 48.8 for each pound. I would be very surprised if you received a more advantageous rate sending Baht to Uk and having the banks convert it into Sterling

[fabman]

it sounds like everything should be fine then ( regarding taxes )

i think deffinately change to pounds in thailand before sending back to the uk

[Super Joe]

thanks , do you have any idea how much the tax would be ? its her family that are selling the land and she will get a percentage of it.

Hi, I think advocate has given you good advice already, my understanding of it is the tax should be applied as following:
1) Transfer tax 2% - Of the land offices 'appraised' valuation rates and not the actual sale price. These rates are usually a lot lower than current values.

2) SBT 3.3% or Stamp Duty 0.5% - Of appraised value or actual sale price (or at least what you declare it as), whichever is higher. SBT (Special business tax) is exempt for individuals if a) you've held property for over 5 years, or b) it's been your main place of residence for last 1 year+.

3) Withholding Tax (Personal tax on 'gain') - Of appraised value, not the actual. Exemptions for certain circumstances like if inheritence, gift or whether sale is for profit purposes (don't quite get that one). 1% for companies, taxed on the personal income tax progressive rates for individuals.
Deductable allowance depending on number of years of possession, ie: 92% if held 1 year (ie: you only get taxed on 8% of it's value, 8% being the perceived gain for 1 year), 84% if held 2 years, 77% if held 3 years going to a maximum of 50% after 8 years. In theory you would have made a 100% gain after 8 years, so they tax that maximum gain only thereafter.

Some are buyers duty, some sellers, some both, so as advocate said taxes are often split 50/50. Under-declaring is common, which basically defers the tax liability, potentially to the buyer. By having a 50/50 arrangement the buyer has an incentive to under-declare, but if seller agrees to pay all taxes then this creates an incentive for buyer to insist the full purchase value is declared on the day. This could be a large amount of tax if for example you had brought a 5m house (declared @3m), and now you're selling it for 10m hoping to declare @ say 6m. Now your planned 3m taxable amount has jumped to 7m, an 'extra' 4m... and when you think the upper rate of personal tax is 37%, it could amount to an additional 600k of taxes overall.

Trust that's clear as mud

SJ