Which LTFs to buy?

[Ducnguyen]

Dear all

I am looking to buy LTFs so I can be entitled to tax deductions. Grateful if you can please share your experiences with the companies which you bought your LTFs from. I have been researching and these are the three best options people have been suggesting:

• ING's LTFs ;
• Aberdeen's LTFs;
• Bangkok Bank's LTFs - I understand that the LTFs from Bangkok Bank have done extremely well in the last few years (return of over 20% per year).

On a separate note, is there anything I should pay attention to when I buy the LTFs? I assume I will not have to make any decision or do any management work after I have picked one of them.

Thank you so much in advance.

[mcyachty]

I bought mine through Kasikorn Bank. Set up like a passbook account and deposit through the year.

[bangkoklad1]

Interesting thread as Im in the same boat at the OP.

Off to SCB tomorrow to ask, but some general questions.

1. Do these operate more as a bank deposit (pay every month, get a return after 6 months/year etc).

2. Do you have any experience on LTF thats pay out more that bank returns and then some (5+%)?

Im deciding to buy either a new condo (est. 6% return) or putting it in a LTF.

Thanks one and all!

[aurelius]

BLTF75 has a 75% equity exposure as described by the name.

Easiest to go with the banks that are closely linked to the asset mgmt companies as its much easier to buy and sell via internet banking.

[aurelius]

The LTF's don't pay out anything until the end (5 years). They are designed to be long term enforced investments. There is no guaranteed return, but over that period of time returns are usually ok. In addition to the capital appreciation is the tax saving which is significant in its own right. It you're earning heaps then it may also be worth buying RMF as well (max 500,000 BT each).

But I'd say none if this is related to a condo purchase in 2 years - totally different time horizon, and if you got LFT you wouldn't be able to withdraw without nasty penalties like paying back the tax refund.

[bangkoklad1]

Thanks for the info. So can you claim the tax benefit every year or only after 5 years?

[Bangkokhatter]

As i pay a fixed amount monthly, the accountant at work claims the tax relief monthly, but it can be claimed annually also.

[isawasnake]

Any other opinions on the op's topic? I have been looking into this as well, seems like a prudent move if you are working here. Even if you lose, you just lose the money you would have paid in tax, at least to a certain extent.

If I understand correctly, the earnings from your LTF, and of course the capital in the LTF are not taxed at all.

[fletchsmile]

The LTF's don't pay out anything until the end (5 years). They are designed to be long term enforced investments. There is no guaranteed return, but over that period of time returns are usually ok. In addition to the capital appreciation is the tax saving which is significant in its own right. It you're earning heaps then it may also be worth buying RMF as well (max 500,000 BT each).

But I'd say none if this is related to a condo purchase in 2 years - totally different time horizon, and if you got LFT you wouldn't be able to withdraw without nasty penalties like paying back the tax refund.

Sums up things well. I'm also a big fan of LTFs and have always taken out the max I could whenever working/ paying tax in Thailand, since they first started.

Personally am not as convinced with RMFs. While they offer a wider range, the need to lock in until retirement may be unsuitable for foreigners, particularly younger ones. May work for some though. Particularly if committed long term to Thailand, earning a lot as you say, and not so far off retirement.

BTW There are some funds that pay out before the 5 years, eg ING/UOB Big Cap Thai Div, pays a dividend out each year usually in excess of 6%. The disadvantage though is the div is taxable. Like normal divs you can elect to pay either a flat 10% tax or tax at your marginal rate. You can change the basis too, eg when working and paying high tax choose 10%, when not may use the marginal rate.

I like Aberdeen, ING/UOB Good Corp Governance and hold them in addition to the Big Cap. I wouldn't add much more to the Div fund though, as I prefer the wait 5 calendar years and have tax free capital gains.

Cheers

Fletch