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Post by Fletchsmile on Dec 19, 2016 15:37:45 GMT 7
reminder and basic article on LTFs / RMFs to save tax before the year-end =================================== Investments that payWith hundreds of tax-saving funds, LTFs and RMFs have long been prime avenues for taxpayers to explore when building up their nest eggs As the calendar year draws to a close, many taxpayers are keenly exploring ways to make tax-saving investments. Long-term equity funds (LTFs) and retirement mutual funds (RMFs) are always top choices. Such funds are not only for tax savers, but are also instruments to accumulate wealth for retirement. Taxpayers can deduct up to 15% of their taxable income or 500,000 baht (whichever is lower) from investment in LTFs and RMFs. The investment cap for RMFs must include contributions to provident or pension funds and pension life insurance premiums. contd... www.bangkokpost.com/business/finance/1163161/investments-that-pay |
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Post by Fletchsmile on Dec 20, 2016 12:12:01 GMT 7
Article from MBMG Investment advisory that expands a little more around some of the rules as well as advantages and disadvantages: ======================== Thai RMFs & LTFs could prove to be a sound investment :If you’re earning a Thai Baht salary, Retirement Mutual Funds (RMFs) and Long-Term Equity Funds (LTFs), can represent an opportunity for sizeable tax savings. contd... www2.mbmg-investment.com/in-the-media/inthemedia/121 |
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AyG
Crazy Mango Extraordinaire
Posts: 5,871 
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Post by AyG on Dec 20, 2016 14:20:03 GMT 7
One nagging concern that I have is that these populist schemes are artificially driving up the SET. There were government discussions not that long ago about withdrawing or modifying the benefits. To do so would almost inevitably lead to a fall in the SET, and that will affect both RMF/LTF holders and "normal" investors.
When the government seems to need all the money it can get to subsidise rice and rubber farmers, let the military buy new toys, and pay for vanity infrastructure projects such as high speed trains, how sure can we be that the playing field won't radically be changed?
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Post by Fletchsmile on Dec 21, 2016 11:08:56 GMT 7
I'd broadly compare LTFs to ISAs (formerly PEPs) and RMFS to SIPPs (formerly PPPs) in the UK. One key difference being LTFs get tax relief ISAs don't. PEPs also originally started as UK equity only but then changed over time to include overseas markets and other products. If ISAs and SIPPs in the UK were suddenly withdrawn, then they too might impact the stock market. So broadly generalising a similar sort of risk really. Who's to say the UK government won't radically change the playing field on SIPPs? Wait a minute they regularly do you say  If anything I prefer the Thai versions. Thailand tends to tinker with them less. I've been using LTFs since 2004 so would differentiate them from populist schemes like rice buying. TBH I think all that would happen if they changed the rules would be that it would affect new money going into these schemes rather than existing funds. So the impact would be minimal and more gradual. The amount of existing funds far outweighs the amount of new money in a year. On LTFs we've also already seen how it's easier to grandfather the existing arrangements when they changed from 5 calendar years to 7. Would be too messy to go back and change retrospectively so they just said 5 years for the old schemes to continue and 7 for the new. On LTFs in particular I've always looked at it that these excellent tax reliefs might not be around for ever so grab them while you can. Worth noting also that given the investments aren't used by so many of the population and that those that do use aren't necessarily that investment savvy either. For LTFs a lot of people buy in December each calendar year. A mistake in my view as it is often near the top of the year - Dec being traditionally a strong month - plus they get under a month's growth compared to up to 12 months if you did Jan. Also they sell in Jan to get their money out as soon as they can. Again often short sighted view. These LTFs buys in December and sales in Jan already influence the market upwards and then downwards respectively. So somewhat ironically removing the product would remove these influences/ distortions. LTFs still rank as one of my favourite ever equity investments - to be grabbed whenever I can and for as long as I can. RMFs aren't too bad as you get older either  |
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