Its Happening - Law to Tax Overseas Income Now in Progress

[kurnell]

My wife keeps harping on to me about using one of these local insurance companies to reduce my income tax. I had a quick look into to several years ago but it seemed a load of long term <deleted>. Does anyone with real knowledge know whether it really saves money or not? I ain't really interested in saving a few pennies per month.

[fletchsmile]

Sounds like she's referring to the exemptions you can get for life assurance premiums (100k) on 10 year plans or medical insurance (15k). Most of the big accounting firms publish guides, eg:

http://www.pwc.com/en_TH/th/publications/2013/thai-tax-2013-booklet.pdf

life insurance in Thailand often isn't good value for money, and much more expensive than many countries in the west, although be careful they may not cover you here. As a general rule "term insurance" + a separate savings plan somewhere else, is usually better value for money than combining insurance + investment in the same single policy in what they call "whole of life". Insurers are good at insurance - they often aren't anywhere near the best at investment, and combining policies just detracts from transparency around charges, fees and real returns

My favourite is putting money in an LTF for 15% of income up to 500k. pages 3,4,5 of the link above for example give others

Cheers

Fletch

Edited August 8, 2013 by fletchsmile

[kurnell]

Sounds like she's referring to the exemptions you can get for life assurance premiums (100k) on 10 year plans or medical insurance (15k). Most of the big accounting firms publish guides, eg:

http://www.pwc.com/en_TH/th/publications/2013/thai-tax-2013-booklet.pdf

life insurance in Thailand often isn't good value for money, and much more expensive than many countries in the west, although be careful they may not cover you here. As a general rule "term insurance" + a separate savings plan somewhere else, is usually better value for money than combining insurance + investment in the same single policy in what they call "whole of life". Insurers are good at insurance - they often aren't anywhere near the best at investment, and combining policies just detracts from transparency around charges, fees and real returns

My favourite is putting money in an LTF for 15% of income up to 500k. pages 3,4,5 of the link above for example give others

Cheers

Fletch

So I take out an insurance premium for 200k and I can claim a 15% tax deduction, i.e. 30k per year?

[fletchsmile]

For a normal life qualifying insurance policy (not linked to a pension) the allowance can't exceed 100k, so if you took out a 200k premium you would still only get an allowance of 100k.

The actual tax saved is at your marginal rate of tax you pay on the premium. So if your marginal tax rate is 30% you would save tax of 100k x 30% = 30k. If your marginal rate of tax is 10% you would save 100k x 10% = 10k.

Cheers

Fletch

[kurnell]

For a normal life qualifying insurance policy (not linked to a pension) the allowance can't exceed 100k, so if you took out a 200k premium you would still only get an allowance of 100k.

The actual tax saved is at your marginal rate of tax you pay on the premium. So if your marginal tax rate is 30% you would save tax of 100k x 30% = 30k. If your marginal rate of tax is 10% you would save 100k x 10% = 10k.

Cheers

Fletch

Balls. Less than 3k a month