A new inheritance and gift tax, if in place, will drive money out of Thailand, undermine local savings and investment and discourage companies from listing on the stock market, warn Thai estate operators.

"We're afraid that the planned inheritance tax and gift tax, if it is implemented, will trigger major capital outflows, particularly to countries like Singapore where there is no inheritance tax," Lertmongkol Waravenuch, vice-president of the Thai Real Estate Association, said yesterday at a seminar on how to manage land and assets after the inheritance tax becomes effective.

"Singapore is always a safe haven for people in countries where there is inheritance tax," he said.

Singapore is among several countries where inheritance tax had been scrapped. Others include Austria, Australia, Turkey, Egypt, Israel and Sweden.

The inheritance and gift tax is part of the National Council for Peace and Order's policy of imposing taxes that it hopes will reduce income disparity and generate revenue for the government. Other planned taxes include a land and buildings tax and negative income tax.

Prime Minister Prayut Chan-o-cha's government recently pledged to enforce such taxes within this year. The proposal is pending the National Legislative Assembly's approval.

According to the latest draft of the planned inheritance and gift tax, assets with a net value of more than 50 million baht will be taxed 10%.

"Inheritance tax will likely be approved and the tax is expected to become effective immediately after official announcement," said Mr Lertmongkol.

He suggested anyone with assets worth more than 50 million baht conduct an asset management plan or transfer them to their children before the tax is enforced in order to reduce their tax burden.

Mr Lertmongkol said inheritance tax may also prompt people to put land or property valued more than 50 million baht into a company where their children hold shares in order to avoid tax payment.

That company will be registered with a registered capital of not more than 50 million baht. By this method, such a company will not raise funds on the stock market.

In a move to allay jitters over the inheritance and gift tax, the Finance Ministry said on Wednesday that 10% was the ceiling rate and the actual rate was likely to be lower.

The maximum rate will still be far below the 10-50% inheritance tax charged in Japan or the 7-32% in Finland.

Taxable value for inheritance and gift tax in Thailand will start from 50 million baht, higher than the 15 million in Japan.