Buying property in Phuket from the UK

Lyubov FortunovaFounder of Fortunova Capital Group. I have lived on Phuket for over five years and handle every purchase myself. About me

British buyers ask me about the purchase. The purchase is the simple half. The half that decides whether the investment works is what happens on your own tax return for the next twenty years, and one item on it — inheritance tax — changed in April 2025 in a way that reaches a Phuket apartment directly. Here is the whole picture, with the places where you need an accountant rather than me marked as such.

First, what you can own

A condominium unit can be held freehold in your own name, inside the building's 49% foreign quota of residential floor area. Land cannot — not by a foreigner, not through a company you control, and the structures sold as a way round that are the subject of an active enforcement programme this year. I have written the detail in what a foreigner may actually own in Thailand, and I will not sell a structure I would not put my own name to.

The rent: taxed twice, relieved once

Thailand taxes the rent because the property is there. The UK taxes it because you live here. The 1981 UK–Thailand double taxation convention sorts the overlap out rather than removing either charge: Article 7 gives Thailand the right to tax income from immovable property situated there, and Article 23 gives the UK the obligation to credit the Thai tax against the UK tax on the same income.

Mechanically, on your side: the income goes on the foreign pages, SA106, and foreign tax credit relief is claimed there too. The credit is the lower of the Thai tax allowed under the convention and the UK tax on that income — so if your UK marginal rate is higher than the effective Thai rate, you top up the difference; if it is lower, the excess Thai tax is simply lost. Alternatively you can deduct the Thai tax from the income instead of crediting it, which occasionally works out better and is worth having your accountant check both ways in the first year.

Two details that catch people. The £1,000 property allowance exists, but it is one allowance across your property business as a whole, UK and overseas together — not one each. And the remittance basis is gone: it was abolished on 6 April 2025 and replaced by a four-year regime available only to people arriving in the UK after at least ten consecutive non-resident years. If you have lived here for years, you are on the arising basis, and leaving the rent in a Thai bank account changes nothing at all about when it is taxed.

Inheritance tax: the change most British owners have not absorbed

Before April 2025 the question was domicile, and domicile was arguable. From 6 April 2025 it is the long-term resident test: if you have been UK tax resident for at least ten of the previous twenty tax years, your non-UK assets are inside the UK inheritance tax net. A Phuket apartment is a non-UK asset. It is in.

The arithmetic is unforgiving because the rate is flat. Above the nil-rate band — £325,000, plus the residence nil-rate band of £175,000 where it applies, both frozen to April 2031 — the rate is 40%, reduced to 36% where at least a tenth of the net estate goes to charity.

And the status does not end when you leave. Long-term resident status persists for between three and ten years after departure, depending on how long you were resident beforehand. If part of the plan is to retire to Thailand and step outside the UK net, the timing of that is a real planning question and not a formality.

What your heirs face on the Thai side

Separately from tax, there is eligibility. A foreign heir may keep a Thai apartment only if they themselves fall within one of the qualifying grounds in section 19 of the Condominium Act and the building's 49% quota is not exceeded. An heir who does not qualify must notify the competent official in writing within sixty days and dispose of the unit within a year. Land is stricter again — a foreign heir cannot keep it at all. I have set this out in how a Thai apartment passes to your heirs, including what to arrange while you are alive so that your family is not hunting for documents in a country they do not live in.

Selling: capital gains tax on both sides

For a UK resident a Phuket condominium is a chargeable asset like any other. From 6 April 2026 the separate residential-property rates are gone and the main rates apply: 18% within the basic-rate band and 24% above it, after the annual exempt amount of £3,000. Article 14 of the convention lets Thailand tax the gain as well, and foreign tax credit relief covers the Thai tax paid at the Land Office.

One procedural point worth knowing in advance: the sixty-day capital gains return applies only to UK residential property. An overseas disposal goes on the ordinary self-assessment return — SA108 with SA106 for the credit — and the real-time reporting service cannot be used where you are claiming relief for foreign tax. So the tax is payable by the 31 January following the tax year of sale, which is usually later than people expect and occasionally much later than they have kept the money for.

What Thailand takes, whatever your passport

This half does not change by nationality, and it is worth having straight before you look at the tax position at home.

• On purchase. A transfer fee of 2% of the appraised value at the Land Office. The reduced 0.01% fee that appears in Thai news coverage — extended, as reported, to 30 June 2027 — is limited to Thai nationals. A foreign buyer pays the full 2%.
• On the rent. Rent from Thai property is taxable in Thailand wherever it is paid. Where a tenant or agent pays a non-resident owner, 15% is withheld at source under section 50(3) of the Revenue Code. That is not a final tax: under section 60 it is credited against the liability calculated on the Thai return, and for most owners a large part of it comes back.
• The Thai calculation itself. The progressive scale runs from nil below THB 150,000 to 35% above THB 5,000,000, and rent from a building carries a standard expense deduction of 30% under Royal Decree No. 11, or actual documented expenses instead. The annual return is due by the end of March, with a half-year return for rental income by the end of September.
• While you hold it. Land and Building Tax, assessed by the municipality on the position at 1 January. On a residential unit that is not your registered home the rate sits in hundredths of a percent of appraised value; property assessed as hotel or commercial use is charged materially higher.
• On sale. 2% transfer fee again, plus specific business tax of 3.3% if you sell within five years of acquiring — or stamp duty of 0.5% if you do not, never both — plus the seller's withholding income tax, computed at the Land Office on the appraised value after a deduction that scales with the years you held it.
• On death. Thailand has an inheritance tax, but the threshold is high: THB 100 million per heir, with tax only on the excess, at 5% for ascendants and descendants and 10% for others. A spouse is exempt. The return is due within 150 days.

The practical sequence, in order

Check the foreign quota on the specific unit, not the project. Agree the wording of the transfer with your bank before you send anything, because the money has to arrive in foreign currency and be converted in Thailand, and the bank's evidence of that is what the Land Office registers your freehold against — the bank document the Land Office needs covers exactly which document that is. Establish before you model any income whether nightly letting is lawful in that building. Then tell your accountant in the year of purchase, not in the year you first receive rent.

In short

For a British buyer Phuket is straightforward on the Thai side and unremarkable on the UK side, with one genuine sting: inheritance tax now reaches the apartment through the long-term resident test, at 40%, with no treaty and usually nothing to credit. That is not a reason not to buy. It is a reason to know it before you buy, and to have a will that works in both places. I am not a tax adviser and nothing here is tax advice — have your accountant confirm the current figures for the year you actually transact.

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Lyubov Fortunova

Investment strategist and founder of Fortunova Capital Group. I have lived on Phuket for more than five years and run every deal myself: I select the property, calculate the net return, check the developer and hold the process together until the keys are handed over. Lawyers, visa and tax specialists come from my own circle.

“I count net, not dreams”

I am a UK resident and would like to understand the numbers on a specific unit before I go further

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