FIREinTh
Crazy Mango
Posts: 85
Likes: 47
|
Post by FIREinTh on Dec 4, 2019 8:12:04 GMT 7
Like a lot of things, these changes seem to be done at the last minute. The new Super Savings Fund is completely different from the Sustainable Fund they were talking about just a few months ago. The new funds should be ready by February haha. The article says these changes have been approved by the cabinet, but it's always unclear if these are the final changes or if everything can change again at the last minute.
Maximum SSF deduction will be 30% of income up to a 200,000B maximum deduction. Maximum RMF deduction has increased to 30% up to 500,000B, but the maximum combined SSF+RMF deduction is now capped at 500,000B, which will affect quite a few people I imagine.
Overall, It looks like lower earners benefit from the increase to 30% (60% SSF+RMF deduction), but higher earners lose because of the new 500,000B SSF+RMF cap.
|
|
Moobin
Crazy Mango
Posts: 81
Likes: 46
|
Post by Moobin on Dec 4, 2019 9:49:40 GMT 7
Based on what you have written above, as I am already paying in more than 500,000 a year into a provident fund, this SSF scheme will not work for me. I had already stopped buying into an RMF fund because there was no tax benefit for me due to the input into my provident fund. But at least I could continue with LTFs and life insurance and get the tax benefit.
Actually, I can't complain as the original schemes were benefiting the higher earners the most anyway, and yet the intention behind the schemes was supposedly to promote savings among the general workforce. Perhaps this new scheme may actually serve the intended purpose. And I will pick up my last tax rebate in a few months as I just paid my last insurance premium yesterday. All good things come to an end.
|
|
AyG
Crazy Mango Extraordinaire
Posts: 5,871
Likes: 4,555
|
Post by AyG on Dec 4, 2019 9:51:42 GMT 7
One rather unattractive aspect of the new "Super Savings Fund" is the lock-in period, which is for a minimum of 10 years.
|
|
FIREinTh
Crazy Mango
Posts: 85
Likes: 47
|
Post by FIREinTh on Dec 4, 2019 11:51:49 GMT 7
Good point. That's a big deal because if you're over 45 years old you may want to only invest in RMFs since you have to keep them in for 5 years and be over 55 to withdraw.
If you're 45 or older and you have a choice of 200,000B SSF + 300,000B RMF or putting 500,000B in an RMF, it might make more sense to choose the RMF only option if you want to withdraw as soon as possible. Of course, we have no idea what the SSF funds are at this point...
One rather unattractive aspect of the new "Super Savings Fund" is the lock-in period, which is for a minimum of 10 years.
|
|
|
Post by rgs2001uk on Dec 4, 2019 20:22:49 GMT 7
Thank you very much LTFs, you served me well over the years, alas all good things come to an end.
|
|
|
Post by Fletchsmile on Dec 4, 2019 20:45:09 GMT 7
Yes RIP to LTFs. Have been one of my favourite investments since they came in around 15 years ago. The new SSFs will really only benfit the middle class who actually pay tax. Higher rate tax payer: Used to be me it would have halved the 500k LTF and 500K RMF and Provident Fund I used to do Lower income: don't really save that much anyway. So allowing them 30% instead of 15% to 500k on RMFs won't change much at all. 30% up to 200k on SSFs instead of would be little change too Middle class/income earners are the only ones that may benefit. They might be able to sav more. Though I doubt many will Ball park: - there are 25,000 higher rate tax payers who will now be potentially worse off - middle class is probably around 15%. They have an opportunity to probably save more. Most won't - Lower class/income makes up the other 85%. They still won't have much to save anyway. Of that a large proportion probably aren't very financially aware either One benefit of SSFs will be the wider choice of investments, than LTFs. Might have a minor impact on THB, as people have more incentive to invest in non-Thai equities The impact on LTF funds and SSFs may be worth monitoring, i.e how they deal with LTFs going forward..... Unit trusts can be at a disadvantage to close ended funds if there are significant withdrawals, and liquidity is low. But most LTFs are in highly liquid securities so shouldn't be a big issue Unit trusts can have an advantage over close ended funds when new money is continually coming in. This allows them to take advantage of new opportunities without having to sell existing investments. Something that is difficult with close ended funds like investment trusts. For an IT if they have a long term outlook and are fully invested they may have an issue if a good opportunity presents itself, as their existing investments may not yet have realised their potenitial so might not want to sell, and there is no new money. For LTFs that steady stream of new money will now dry up. I assume you will still be able to buy the LTF funds, just without the tax benefit. Just like now you ca buy over 500k of LTFs a year. just you get no tax benefit on the XS BUT: It needs watching to see exactly what they will do now with "old LTFs" that will no longer attract new money for tax benefits. Will they be converted? Will they just differentiate the unit holders between those old ones that got a tax benefit, and new ones that don't? Will they be closed to new money completely? etc etc
|
|
|
Post by realisedurgency on Dec 15, 2020 10:13:27 GMT 7
Maximum SSF deduction will be 30% of income up to a 200,000B maximum deduction. Maximum RMF deduction has increased to 30% up to 500,000B, but the maximum combined SSF+RMF deduction is now capped at 500,000B, which will affect quite a few people I imagine.
Overall, It looks like lower earners benefit from the increase to 30% (60% SSF+RMF deduction), but higher earners lose because of the new 500,000B SSF+RMF cap. It's the end of year and it looks like I could be someone to benefit from these changes. I'm approaching my mid 30s, so the SSF for 10 years with no ongoing top ups needed or RMF till I'm 55 where I need to make minimum yearly contributions. Is the best play still to max these out? To be open, my ball park income is 1 million baht. My current LTF and RMF holdings haven't been up to much, but does the tax back make it all worthwhile ...
|
|
|
Post by rgs2001uk on Dec 17, 2020 21:50:54 GMT 7
I would be more inclined to seek out whats available elsewhere, eg overseas in terms of returns and forgo the tax advantage.
|
|
|
Post by realisedurgency on Dec 20, 2020 8:40:56 GMT 7
I would be more inclined to seek out whats available elsewhere, eg overseas in terms of returns and forgo the tax advantage. Yes, the nice tax return did not cover what I could have made last year investing in global funds. The B-LTF I've had for a few years is only slightly in the green. And BERMF which I've had a little over a year is negative. Meanwhile the global trusts I hold have done great, I also have a small bit of gold and BTC which have also done great. And there is more flexibility with all of those. When things were going well in Thailand maybe it was a no brainer to go with these tax deductible funds. But now ...
|
|
|
Post by rgs2001uk on Dec 22, 2020 20:48:50 GMT 7
^^^, the investors dilemma, stick or twist, I think you already know the answer, but you just havent decided yet.
FWIW, I dont expect all markets to behave the same way at the same time, but I will not tolerate low returns etc etc.
Been down this path earlier this year, where I offloaded and reinvested elsewhere.
I would be more concerned about this, The B-LTF I've had for a few years is only slightly in the green. Not good, I would offload.
And BERMF which I've had a little over a year is negative., nothing to be alarmed about, but I would flag it up as one to keep my eye on, and if it doesnt improve, offload.
|
|
|
Post by rgs2001uk on Dec 22, 2020 21:46:09 GMT 7
|
|
|
Post by realisedurgency on Dec 23, 2020 17:12:03 GMT 7
Cheers I will take a look at those. I have also seen Mid Wynd International and Edinburgh Worldwide among others recommended here. So far I'm very happy with the BG ITs I hold. I must check the rules on selling LTFs and RMFs early also.
|
|
chiangmai
Crazy Mango Extraordinaire
Posts: 6,217
Likes: 5,228
|
Post by chiangmai on Dec 23, 2020 18:46:39 GMT 7
Cheers I will take a look at those. I have also seen Mid Wynd International and Edinburgh Worldwide among others recommended here. So far I'm very happy with the BG ITs I hold. I must check the rules on selling LTFs and RMFs early also. I cashed in one third of the value of an LTF that we've held for less than 7 years and we were charged tax on the profit that was made. But we did that just before the covid19 virus hit and before share prices fell so we were happy to pay what amounted to only a very small amount of tax (not recoverable). We never offset the purchase of the LTF against income or earnings for tax purposes so there was no claim there, I suspect if you have then the calculation gets messy. BTW I can recommend Mid Wynd Int., it's a good choice.
|
|
|
Post by rgs2001uk on Dec 23, 2020 21:24:36 GMT 7
Cheers I will take a look at those. I have also seen Mid Wynd International and Edinburgh Worldwide among others recommended here. So far I'm very happy with the BG ITs I hold.I must check the rules on selling LTFs and RMFs early also. , they were posted as an example of not all markets and ITs will not behave the same way at the same time, they ARE NOT a reccomendation to buy. I hold, Mid Wynd, and Edinburgh, BG, , welcome to the club, my stockbroker commented on, I may be top heavy in BG, I recently offloaded a few ITs and BG Europe was another I added to my BG portfolio, along with SM, Monks, and Edinburgh.
|
|
|
Post by rgs2001uk on Dec 23, 2020 21:30:46 GMT 7
Cheers I will take a look at those. I have also seen Mid Wynd International and Edinburgh Worldwide among others recommended here. So far I'm very happy with the BG ITs I hold. I must check the rules on selling LTFs and RMFs early also. You mention MW, another you may consider is Fundsmith, which I also hold.
|
|