Sold house in UK.what to do with funds.Help

Jip99 · May 5, 2014

You need a UK bank account to receive prizes and deposit/withdraw monies online.

Correct. Though it doesn't have to be onshore.

A UK postal address is also required.

Incorrect.

Apologies - you can apply from overseas but there are a few more hurdles to jump through. My online application sailed through using a UK address.

I will stand corrected but I believe that the bank account must be in a 6/6 sort code and account number formation. This is because prizes and withdrawals are paid by BACS and deposits taken from a debit card linked to a bank account.

What you need before you apply

1. Your debit card details 4. Your holder’s number, if you already have Premium Bonds 2. Your nominated UK bank account details (to receive repayments from NS&I) 5. Your NS&I number and password, if you're already registered for our online and phone service 3. A valid email address, so we can send confirmation that we’ve received your application

phusingpete · May 5, 2014

I'd buy a 1 bed flat anywhere round London for about 150. Even on a shitty part like Dagenham you'll get 2 beds for that money give to housing or council rented easy money every month.

At least when your daughter grows up and wants to live there and even go to uni she'll be ok.

If she wants to sell it and move elsewhere . Also better.

Leaves you with 85K to enjoy.

Did you say which part of UK you sold in ?

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Sorry no i did not. I am sellig a detatched house in Cornwall.

mrfaroukh · May 5, 2014

To be honest I would bring money to Thailand only how much I do need. Once in Thailand open a bank account and every 6 months transfer some money for your next 6 month in Thailand.

If anyone knew what is a safe investment don't you think all of us would have done the same? There is no safe investment beside putting the money in the bank and get interest and pray to God the bank or the country does not go bankcrupt. I feel you make a mistake by selling your house. You should have given it on rent and use the rental money plus capital growth unless you are sure the property price would really drop there.

It is a bad bad idea to bring the money to Thailand. You get almost no interest, property investment is not really advisable, getting back the money to UK is big problem. So whatever you need to do, do it in UK or some safe European country around you.

AnotherOneAmerican · May 5, 2014

To be honest I would bring money to Thailand only how much I do need. Once in Thailand open a bank account and every 6 months transfer some money for your next 6 month in Thailand.

If anyone knew what is a safe investment don't you think all of us would have done the same? There is no safe investment beside putting the money in the bank and get interest and pray to God the bank or the country does not go bankcrupt. I feel you make a mistake by selling your house. You should have given it on rent and use the rental money plus capital growth unless you are sure the property price would really drop there.

It is a bad bad idea to bring the money to Thailand. You get almost no interest, property investment is not really advisable, getting back the money to UK is big problem. So whatever you need to do, do it in UK or some safe European country around you.

For a young person, sound advice.

For someone 71, not so good.

At that age capital growth is no longer a consideration.

Inheritance tax is a large consideration.

Thai banks will guarantee 1Mbht, so as long as you divide it up, fairly safe.

Bank interest rates 3% in Thailand Vs 1% in the UK.

House in Cornwall, unlikely to be a good investment in the current climate, very poor area, low incomes, property hard to sell, difficult place to get to. I think he did the right thing to sell it.

Count yourself lucky you aren't American, we can't even bequest our assets to foreign nationals.

Edited May 5, 2014 by AnotherOneAmerican

phusingpete · May 5, 2014

So very much to go through, many thanks,

Peter

rayongchelsea · May 5, 2014

Whatever you do, your daughter is lucky to have you in her life..good luck.

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phusingpete · May 5, 2014

Whatever you do, your daughter is lucky to have you in her life..good luck.

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That is so, so nice many many thanks.

Som wat · May 5, 2014

My UK properties all return around 5%
.

I would invest the money in a new city center apartment there.

Easy, safe long-term investment, and a good inheritence for your daughter.

rixalex · May 5, 2014

Although the bulk of my own property assets are in the UK, and I wouldn't argue against the merits of UK property, there is one thing about having it that I feel puts one at a disadvantage, and that is that you are putting yourself into the fluctuating hands of the exchange rate, if the money is going to be spent in Thailand. When you have no idea what the future exchange rate will be, makes it difficult to know how much you will have, and therefore difficult to plan. That's what I like about having Thai property. It's much simpler. If you want to sell it, easy enough to know what it is worth now, and roughly what it will be worth in a few years time. UK property in a few years time... well if the exchange rate is back down in the low 40s, it will be one amount, and if it's back up in the 60s, another amount altogether.

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apiwan · May 5, 2014

I'd buy a 1 bed flat anywhere round London for about 150. Even on a shitty part like Dagenham you'll get 2 beds for that money give to housing or council rented easy money every month.

At least when your daughter grows up and wants to live there and even go to uni she'll be ok.

If she wants to sell it and move elsewhere . Also better.

Leaves you with 85K to enjoy.

Did you say which part of UK you sold in ?

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The joys of Dagenham.
dagenham.jpg

They said that about all saints rd Notting Hill. 20 odd years ago.

Need 1 million up to live there.

Dagenham maybe not the best example

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apiwan · May 5, 2014

I'd buy a 1 bed flat anywhere round London for about 150. Even on a shitty part like Dagenham you'll get 2 beds for that money give to housing or council rented easy money every month.

At least when your daughter grows up and wants to live there and even go to uni she'll be ok.

If she wants to sell it and move elsewhere . Also better.

Leaves you with 85K to enjoy.

Did you say which part of UK you sold in ?

Sent from my SM-N9005 using Thaivisa Connect Thailand mobile app

Sorry no i did not. I am sellig a detatched house in Cornwall.

Could murder a cornish pastie right now .lol

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rixalex · May 5, 2014

I'd buy a 1 bed flat anywhere round London for about 150. Even on a shitty part like Dagenham you'll get 2 beds for that money give to housing or council rented easy money every month.

At least when your daughter grows up and wants to live there and even go to uni she'll be ok.

If she wants to sell it and move elsewhere . Also better.

Leaves you with 85K to enjoy.

Did you say which part of UK you sold in ?

Sent from my SM-N9005 using Thaivisa Connect Thailand mobile app

Sorry no i did not. I am sellig a detatched house in Cornwall.

Could murder a cornish pastie right now .lol
Sent from my SM-N9005 using Thaivisa Connect Thailand mobile app

Had one from Villa the other day. Wanted to murder the person who had cooked it.

Mark1971 · May 5, 2014

Normal advice would be to 100% control your personal financial assets, by keeping them in the UK.

As you are 71 & have a younger wife & a very young daughter you may want to bring more of your assets into Thailand than would normally be wise.

How you finally choose to split your assets between the UK and Thailand depends on purely personal factors, such as your current state of health & how much you trust your wife to control your assets.

If you keep your assets in the UK, here are some ideas.

LSE: PHP Primary health properties.

Builds & owns commercial properties, which it leases to the NHS, Doctors surgeries, pharmacies etc)

Yields about 5.5%

CF Ruffer Total Return fund.

High Yielding FTSE 100 shares.

BP, National Grid, AstraZeneca, British Land, Glaxo etc.

Good luck whatever you decide.

KittenKong · May 5, 2014

Holding such instruments long term is one thing, opening them today is likely different.

The link I posted explains otherwise.

KittenKong · May 5, 2014

Apologies - you can apply from overseas but there are a few more hurdles to jump through. My online application sailed through using a UK address.

Slightly more complex from overseas, but no big deal if you can supply the proof of ID required. It's no worse than opening a bank account.

I will stand corrected but I believe that the bank account must be in a 6/6 sort code and account number formation. This is because prizes and withdrawals are paid by BACS and deposits taken from a debit card linked to a bank account.

Yes, you must have a bank account in the UK clearing system. IOM and CI are fine though.

I think the debit card can be from any country, but I'm not sure. I think there is still the option of sending a UK cheque also.

KittenKong · May 5, 2014

At 71, forget about investing, too much risk of fraud by IFA or UK tax liability on death (40% I believe).

The UK tax liability can be avoided. Fraud by an IFA in the UK is unlikely (and of course you can invest directly and bypass the IFA).

Remember, if living in a foreign country you have no protection from the financial watchdogs in your home country, no matter where or who you invest with.

Not so. I live in Thailand but I get the full UK deposit protection on all my UK deposits (this also applies across the EU). Also they are paid gross and no tax is due on them in the UK. The UK FSCS compensation is also applicable if one invests via a UK registered advisor/broker, though this only extends to GBP50,000

Edited May 5, 2014 by KittenKong

prakhonchai nick · May 5, 2014

»I should explain that my daughter is 100% Thai, my wife and I adopted her when she was three weeks old. She is now six speaks very good English, she attends a private school where she is doing well, loves books and has an enquiring mind.

I think a good international school is out of our league, but hopefully good state schools with an English programme would set her up for university. I have no problem being her dad at my age we have a great time.«

Just wish to mention, that a way to secure school tuition fees etc. at fairly low risk may be a Thai bond Fund Book with the amount you wish to set aside for education, for example 1 or 2 million bath or whatever…

The bonds give you little more outcome, in tax-free capital gain, than the average interest on a fixed 12-month bank account, where 15 percent tax also is withheld. In average the annual net-gain has been around 2½ to 3 percent the last few years. You can sell bonds at any time day-to-day, whereas a fixed bank account gives an interest loss if not withdrawn at the correct time, to pay for school terms etc. In a Thai Will you can stipulate, that the Fund Book is for your daughter’s education and that a named person is to be guardian.

I use bond Fund Book for all short-term savings – like transferring fund for next years budget in one go when currency exchange is favorable and deposit in Fund Book, obtaining a better interest than a normal European bank account. The money is easily accessible so I can sell for the next couple of month budget at any time and move to an ATM account. I also use a bond Fund Book for the money I save up for my daughters (private English-program) school fees, so I’m always a couple of years ahead and can redraw when the semi-annual terms have to be paid for.

Info please on the Thai Bond Fund Book. Google cannot help.

phusingpete · May 5, 2014

At 71, forget about investing, too much risk of fraud by IFA or UK tax liability on death (40% I believe).

The UK tax liability can be avoided. Fraud by an IFA in the UK is unlikely (and of course you can invest directly and bypass the IFA).

Remember, if living in a foreign country you have no protection from the financial watchdogs in your home country, no matter where or who you invest with.

Not so. I live in Thailand but I get the full UK deposit protection on all my UK deposits (this also applies across the EU). Also they are paid gross and no tax is due on them in the UK. The UK FSCS compensation is also applicable if one invests via a UK registered advisor/broker, though this only extends to GBP50,000

What do you mean by your UK deposits, I thought all income from the UK was taxed.

Jip99 · May 6, 2014

At 71, forget about investing, too much risk of fraud by IFA or UK tax liability on death (40% I believe).

The UK tax liability can be avoided. Fraud by an IFA in the UK is unlikely (and of course you can invest directly and bypass the IFA).

Remember, if living in a foreign country you have no protection from the financial watchdogs in your home country, no matter where or who you invest with.

Not so. I live in Thailand but I get the full UK deposit protection on all my UK deposits (this also applies across the EU). Also they are paid gross and no tax is due on them in the UK. The UK FSCS compensation is also applicable if one invests via a UK registered advisor/broker, though this only extends to GBP50,000

What do you mean by your UK deposits, I thought all income from the UK was taxed.

You are liable to tax on all UK income. I think KK's point is that interest is received gross so tax is not automatically deducted.

That puts you in charge of declaring it on your self assessment return and deferring when the tax is paid.

I doubt he was suggesting any additional benefits.

AyG · May 6, 2014

I am a little taken aback by the number of people willing to give advice when the OP hasn't provided enough basic information for any advice to be given. Questions that should have been answered first include:

(1) How much UK income do you expect to receive? (Necessary for consideration of effects of UK income tax.)

(2) Do you expect to be liable to UK inheritance tax? (It might be prudent to mitigate IHT.)

(3) Do you already have an emergency cash reserve?

(4) Will you have any ongoing expenses in Sterling? If so, how much?

(5) Do you have medical insurance which will continue for the rest of your life? (If not, provision needs to be made for unexpected, large expense.)

(6) Have you made a will? (Without one any inheritance objectives could be thwarted.)

Some of the advice given is also staggeringly bad, particularly the advice to invest in UK property.

(1) If the vast bulk of future expenditure is to be made in Baht, it makes no sense to have one's capital in Sterling. One would be completely at the mercy of swings in exchange rate, which can be large.

(2) Owning a single property, or even a small number in a single location, is very risky. If the area experiences a downturn, the property value will plummet and it may end up virtually worthless.

(3) It can be a challenge to manage a property from abroad, even using an agent. It would be even more of a challenge for the OP's heirs.

(4) Ditto selling the property.

(5) Ditto dealing with a tenant delinquent in paying the rent and dealing with eviction and recovery of unpaid rent.

(6) There is no guarantee that the property can be rented continuously, so the income is unreliable.

I just hope the OP can see through some of the terrible advice posted here.

KittenKong · May 6, 2014

What do you mean by your UK deposits, I thought all income from the UK was taxed.

You are liable to tax on all UK income. I think KK's point is that interest is received gross so tax is not automatically deducted.

That puts you in charge of declaring it on your self assessment return and deferring when the tax is paid.

No. For non-residents with no other source of UK income there is normally no further UK tax liability on deposit interest that is paid gross, or on gilt coupons (for the same reason), or on share dividends. Also there is no liability to CGT on any of these.

If you have other sources of UK income that are liable to tax (rental income, salary, pensions etc) then this may have an effect on your tax liability for the interest/dividend income, though in many cases it doesn't.

rayongchelsea · May 6, 2014

I am a little taken aback by the number of people willing to give advice when the OP hasn't provided enough basic information for any advice to be given. Questions that should have been answered first include:

(1) How much UK income do you expect to receive? (Necessary for consideration of effects of UK income tax.)

(2) Do you expect to be liable to UK inheritance tax? (It might be prudent to mitigate IHT.)

(3) Do you already have an emergency cash reserve?

(4) Will you have any ongoing expenses in Sterling? If so, how much?

(5) Do you have medical insurance which will continue for the rest of your life? (If not, provision needs to be made for unexpected, large expense.)

(6) Have you made a will? (Without one any inheritance objectives could be thwarted.)

Some of the advice given is also staggeringly bad, particularly the advice to invest in UK property.

(1) If the vast bulk of future expenditure is to be made in Baht, it makes no sense to have one's capital in Sterling. One would be completely at the mercy of swings in exchange rate, which can be large.

(2) Owning a single property, or even a small number in a single location, is very risky. If the area experiences a downturn, the property value will plummet and it may end up virtually worthless.

(3) It can be a challenge to manage a property from abroad, even using an agent. It would be even more of a challenge for the OP's heirs.

(4) Ditto selling the property.

(5) Ditto dealing with a tenant delinquent in paying the rent and dealing with eviction and recovery of unpaid rent.

(6) There is no guarantee that the property can be rented continuously, so the income is unreliable.

I just hope the OP can see through some of the terrible advice posted.

Add a couple of key elements.

1. His age

2. He has a wife and daughter in Thailand who probably have no idea of tax related issues, self assessment forms etc..

He needs the a more simplified approach with maybe a reduction in possible returns to avoid any hassles and to ensure that his wife and daughter are protected, especially the latter.

Couldn't agree more. The uk property idea is not the best for him.

I have uk properties and will divest them at some point, not because they are not a good investment but because of minimizing taxes both income and inheritance and to ensure that my daughter has sufficient Thai assets which she will know about and manage herself.

Interesting topic.

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Emilp · May 6, 2014

Separate your money. Some income invest in a trust fund in England. Some money invests in property in Thailand and let your wife have a rental income. Some money deposit to Thailand bank for your daughter's education. You should ask your wife what she can do and invest it for her such as open shop.

AnotherOneAmerican · May 6, 2014

At 71, forget about investing, too much risk of fraud by IFA or UK tax liability on death (40% I believe).

....... Fraud by an IFA in the UK is unlikely (and of course you can invest directly and bypass the IFA).

Remember, if living in a foreign country you have no protection from the financial watchdogs in your home country, no matter where or who you invest with.

Not so. I live in Thailand but I get the full UK deposit protection on all my UK deposits (this also applies across the EU). Also they are paid gross and no tax is due on them in the UK. The UK FSCS compensation is also applicable if one invests via a UK registered advisor/broker, though this only extends to GBP50,000

quote 1, You are wrong, very wrong.

quote 2, OP has 250k, so your post pointless.

KittenKong · May 6, 2014

....... Fraud by an IFA in the UK is unlikely (and of course you can invest directly and bypass the IFA).

quote 1, You are wrong, very wrong.

So are you saying that fraud by an IFA in the UK is likely, or that you cannot invest directly and bypass the IFA?

Personally I disagree with both statements as I have explained.

Not so. I live in Thailand but I get the full UK deposit protection on all my UK deposits (this also applies across the EU). Also they are paid gross and no tax is due on them in the UK. The UK FSCS compensation is also applicable if one invests via a UK registered advisor/broker, though this only extends to GBP50,000

quote 2, OP has 250k, so your post pointless.

Why? Deposits are protected up to GBP85K per banking institution and you can have an many of those as you wish. I have quite a few myself.

Whilst FSCS compensation for IFA or broker fraud is limited to GBP50K per broker/IFA, there is nothing stopping you from investing in stocks or bonds in the UK directly, and these are either held in your own name or ring-fenced in a nominee holding. I do this also via the stockbroking arm of one of Britain's biggest banks and I sleep soundly at night.

So all in all quite easy to place GBP250K in the UK and retain full protection against fraud, even if you dont live in the UK.

khunPer · May 6, 2014

»I should explain that my daughter is 100% Thai, my wife and I adopted her when she was three weeks old. She is now six speaks very good English, she attends a private school where she is doing well, loves books and has an enquiring mind.

I think a good international school is out of our league, but hopefully good state schools with an English programme would set her up for university. I have no problem being her dad at my age we have a great time.«

Just wish to mention, that a way to secure school tuition fees etc. at fairly low risk may be a Thai bond Fund Book with the amount you wish to set aside for education, for example 1 or 2 million bath or whatever…

The bonds give you little more outcome, in tax-free capital gain, than the average interest on a fixed 12-month bank account, where 15 percent tax also is withheld. In average the annual net-gain has been around 2½ to 3 percent the last few years. You can sell bonds at any time day-to-day, whereas a fixed bank account gives an interest loss if not withdrawn at the correct time, to pay for school terms etc. In a Thai Will you can stipulate, that the Fund Book is for your daughter’s education and that a named person is to be guardian.

I use bond Fund Book for all short-term savings – like transferring fund for next years budget in one go when currency exchange is favorable and deposit in Fund Book, obtaining a better interest than a normal European bank account. The money is easily accessible so I can sell for the next couple of month budget at any time and move to an ATM account. I also use a bond Fund Book for the money I save up for my daughters (private English-program) school fees, so I’m always a couple of years ahead and can redraw when the semi-annual terms have to be paid for.

Info please on the Thai Bond Fund Book. Google cannot help.

I wrote little about Fund Books in the previous post #70

http://www.thaivisa.com/forum/topic/723381-sold-house-in-ukwhat-to-do-with-fundshelp/page-3#entry7777588

I will try to explain in English (not my native language).

I’m using Bangkok Bank, SCB and Kasikorn Thai, but I think most or all Thai banks offer Fund Books. It’s mutual funds, so the bank (or associate) takes care of all trading. Kasikorn Thai have a fairly good English language website about their mutual funds; whilst Bangkok Bank and SCB have some English leaflets, which may be hard to get a copy of, but their products are basically close to Kasikorn’s. Seems like the banks have only one mutual fund option for bonds, but a variety of mutual funds for equity etc.

The bank selects the bond mix and chose from the safer categories, so I presume risk is fairly limited. You can buy and sell day-to-day, so any not too minor amount of money in need for parking for some month or longer can with benefit be placed in bonds. I was fist introduced to the Fund Book possibilities some 8 years ago by a kind accountant in SCB, when I had some money transferred at a good exchange rate for a house and wished a high interest fixed deposit until I should use them. Glad I choose Fund Book instead, as I got a tax-free interest (no 15% withholding) and could cash money without loss of interest at any time simply by day-to-day selling. Minimum to open and any transaction is around 5,000 baht only. Fund Books can be opened on Tourist Visa, Long Stay Visa, Work Permit or Resident (according to Bangkok Bank).

I have been very satisfied with using mutual fund bonds and have over the years gained some nice extra, normally more than fixed deposit or special binding terms. The gain (interest) depends on market, as it is an investment product, which means some kind of risk compared to a fixed deposit within the bank guarantee. Some years back Immigration accepted a Fund Book for the visa deposit (400k or 800k), but due to being an investment with a risk now only a normal or fixed bank deposit is valid. I normally use the 12 month fixed interest rate as an indicator to calculate when it’s worth transferring money into Thailand up against European bank interest rate, currency exchange rate and transfer fee(s) – needs to be a certain amount, but not that big, and often no more than just a few month deposit makes a gain.

As an investment product for profit I’m sure there are far better options than mutual fund bonds, however some of the mutual funds in equity etc. and tax-privileged LTF (Long Term Funds, minimum 5 years binding period) has performed quite well in the past years, but following market’s ups-and-downs. More experienced or “professional” investors may prefer you select their own portfolio. Kasikorn Thai have graphs and performance tables on their English language website (Kasikorn Asset Management).

http://www.kasikornasset.com/EN/MutualFund/ProductsFundFacts/Pages/Default.aspx

prakhonchai nick · May 6, 2014

»I should explain that my daughter is 100% Thai, my wife and I adopted her when she was three weeks old. She is now six speaks very good English, she attends a private school where she is doing well, loves books and has an enquiring mind.

I think a good international school is out of our league, but hopefully good state schools with an English programme would set her up for university. I have no problem being her dad at my age we have a great time.«

Just wish to mention, that a way to secure school tuition fees etc. at fairly low risk may be a Thai bond Fund Book with the amount you wish to set aside for education, for example 1 or 2 million bath or whatever…

The bonds give you little more outcome, in tax-free capital gain, than the average interest on a fixed 12-month bank account, where 15 percent tax also is withheld. In average the annual net-gain has been around 2½ to 3 percent the last few years. You can sell bonds at any time day-to-day, whereas a fixed bank account gives an interest loss if not withdrawn at the correct time, to pay for school terms etc. In a Thai Will you can stipulate, that the Fund Book is for your daughter’s education and that a named person is to be guardian.

I use bond Fund Book for all short-term savings – like transferring fund for next years budget in one go when currency exchange is favorable and deposit in Fund Book, obtaining a better interest than a normal European bank account. The money is easily accessible so I can sell for the next couple of month budget at any time and move to an ATM account. I also use a bond Fund Book for the money I save up for my daughters (private English-program) school fees, so I’m always a couple of years ahead and can redraw when the semi-annual terms have to be paid for.

Info please on the Thai Bond Fund Book. Google cannot help.

I wrote little about Fund Books in the previous post #70

http://www.thaivisa.com/forum/topic/723381-sold-house-in-ukwhat-to-do-with-fundshelp/page-3#entry7777588

I will try to explain in English (not my native language).

I’m using Bangkok Bank, SCB and Kasikorn Thai, but I think most or all Thai banks offer Fund Books. It’s mutual funds, so the bank (or associate) takes care of all trading. Kasikorn Thai have a fairly good English language website about their mutual funds; whilst Bangkok Bank and SCB have some English leaflets, which may be hard to get a copy of, but their products are basically close to Kasikorn’s. Seems like the banks have only one mutual fund option for bonds, but a variety of mutual funds for equity etc.

The bank selects the bond mix and chose from the safer categories, so I presume risk is fairly limited. You can buy and sell day-to-day, so any not too minor amount of money in need for parking for some month or longer can with benefit be placed in bonds. I was fist introduced to the Fund Book possibilities some 8 years ago by a kind accountant in SCB, when I had some money transferred at a good exchange rate for a house and wished a high interest fixed deposit until I should use them. Glad I choose Fund Book instead, as I got a tax-free interest (no 15% withholding) and could cash money without loss of interest at any time simply by day-to-day selling. Minimum to open and any transaction is around 5,000 baht only. Fund Books can be opened on Tourist Visa, Long Stay Visa, Work Permit or Resident (according to Bangkok Bank).

I have been very satisfied with using mutual fund bonds and have over the years gained some nice extra, normally more than fixed deposit or special binding terms. The gain (interest) depends on market, as it is an investment product, which means some kind of risk compared to a fixed deposit within the bank guarantee. Some years back Immigration accepted a Fund Book for the visa deposit (400k or 800k), but due to being an investment with a risk now only a normal or fixed bank deposit is valid. I normally use the 12 month fixed interest rate as an indicator to calculate when it’s worth transferring money into Thailand up against European bank interest rate, currency exchange rate and transfer fee(s) – needs to be a certain amount, but not that big, and often no more than just a few month deposit makes a gain.

As an investment product for profit I’m sure there are far better options than mutual fund bonds, however some of the mutual funds in equity etc. and tax-privileged LTF (Long Term Funds, minimum 5 years binding period) has performed quite well in the past years, but following market’s ups-and-downs. More experienced or “professional” investors may prefer you select their own portfolio. Kasikorn Thai have graphs and performance tables on their English language website (Kasikorn Asset Management).

http://www.kasikornasset.com/EN/MutualFund/ProductsFundFacts/Pages/Default.aspx

Thanks for the information on "Fund Books". It was the name that confused me. They are basically investment funds (usually stock market equities) offered by most commercial banks. . They can cover investments in different business groups (ie finance, entertainment, hotels etc. or be a combination of more than one type.)

phusingpete · May 6, 2014

I am a little taken aback by the number of people willing to give advice when the OP hasn't provided enough basic information for any advice to be given. Questions that should have been answered first include:

(1) How much UK income do you expect to receive? (Necessary for consideration of effects of UK income tax.)

(2) Do you expect to be liable to UK inheritance tax? (It might be prudent to mitigate IHT.)

(3) Do you already have an emergency cash reserve?

(4) Will you have any ongoing expenses in Sterling? If so, how much?

(5) Do you have medical insurance which will continue for the rest of your life? (If not, provision needs to be made for unexpected, large expense.)

(6) Have you made a will? (Without one any inheritance objectives could be thwarted.)

Some of the advice given is also staggeringly bad, particularly the advice to invest in UK property.

(1) If the vast bulk of future expenditure is to be made in Baht, it makes no sense to have one's capital in Sterling. One would be completely at the mercy of swings in exchange rate, which can be large.

(2) Owning a single property, or even a small number in a single location, is very risky. If the area experiences a downturn, the property value will plummet and it may end up virtually worthless.

(3) It can be a challenge to manage a property from abroad, even using an agent. It would be even more of a challenge for the OP's heirs.

(4) Ditto selling the property.

(5) Ditto dealing with a tenant delinquent in paying the rent and dealing with eviction and recovery of unpaid rent.

(6) There is no guarantee that the property can be rented continuously, so the income is unreliable.

I just hope the OP can see through some of the terrible advice posted here.

Hi , to answer your questions,

1) I have UK pensions which exceed the personal allowance and was really thinking of taking my cash out of UK to avoid further taxation. However it seems that I may be able to invest tn the UK and avoid tax, according to some posts. Although I may have to dip into a slush fund on occassion mainly for my daughters education,we should manage quite well on my pensions. My main aim is to provide some security for my wife and child.

As of now I have no idea what sort of income I should expect to achieve for them. The widows pension at this time is about 4500 GBP, not a lot.

2) No

3) Very small amount, around 7000 GBP

4) Only tax on pensions

5) None, though I understand that Surin hospital is providing an insurance for expats.

6) I have a will in England covering my assets there, not as yet in Thailand as I only have the car and bank account of course this may have to change.

fletchsmile · May 6, 2014

»I should explain that my daughter is 100% Thai, my wife and I adopted her when she was three weeks old. She is now six speaks very good English, she attends a private school where she is doing well, loves books and has an enquiring mind.

I think a good international school is out of our league, but hopefully good state schools with an English programme would set her up for university. I have no problem being her dad at my age we have a great time.«

Just wish to mention, that a way to secure school tuition fees etc. at fairly low risk may be a Thai bond Fund Book with the amount you wish to set aside for education, for example 1 or 2 million bath or whatever…

The bonds give you little more outcome, in tax-free capital gain, than the average interest on a fixed 12-month bank account, where 15 percent tax also is withheld. In average the annual net-gain has been around 2½ to 3 percent the last few years. You can sell bonds at any time day-to-day, whereas a fixed bank account gives an interest loss if not withdrawn at the correct time, to pay for school terms etc. In a Thai Will you can stipulate, that the Fund Book is for your daughter’s education and that a named person is to be guardian.

I use bond Fund Book for all short-term savings – like transferring fund for next years budget in one go when currency exchange is favorable and deposit in Fund Book, obtaining a better interest than a normal European bank account. The money is easily accessible so I can sell for the next couple of month budget at any time and move to an ATM account. I also use a bond Fund Book for the money I save up for my daughters (private English-program) school fees, so I’m always a couple of years ahead and can redraw when the semi-annual terms have to be paid for.

Info please on the Thai Bond Fund Book. Google cannot help.

I wrote little about Fund Books in the previous post #70

http://www.thaivisa.com/forum/topic/723381-sold-house-in-ukwhat-to-do-with-fundshelp/page-3#entry7777588

I will try to explain in English (not my native language).

I’m using Bangkok Bank, SCB and Kasikorn Thai, but I think most or all Thai banks offer Fund Books. It’s mutual funds, so the bank (or associate) takes care of all trading. Kasikorn Thai have a fairly good English language website about their mutual funds; whilst Bangkok Bank and SCB have some English leaflets, which may be hard to get a copy of, but their products are basically close to Kasikorn’s. Seems like the banks have only one mutual fund option for bonds, but a variety of mutual funds for equity etc.

The bank selects the bond mix and chose from the safer categories, so I presume risk is fairly limited. You can buy and sell day-to-day, so any not too minor amount of money in need for parking for some month or longer can with benefit be placed in bonds. I was fist introduced to the Fund Book possibilities some 8 years ago by a kind accountant in SCB, when I had some money transferred at a good exchange rate for a house and wished a high interest fixed deposit until I should use them. Glad I choose Fund Book instead, as I got a tax-free interest (no 15% withholding) and could cash money without loss of interest at any time simply by day-to-day selling. Minimum to open and any transaction is around 5,000 baht only. Fund Books can be opened on Tourist Visa, Long Stay Visa, Work Permit or Resident (according to Bangkok Bank).

I have been very satisfied with using mutual fund bonds and have over the years gained some nice extra, normally more than fixed deposit or special binding terms. The gain (interest) depends on market, as it is an investment product, which means some kind of risk compared to a fixed deposit within the bank guarantee. Some years back Immigration accepted a Fund Book for the visa deposit (400k or 800k), but due to being an investment with a risk now only a normal or fixed bank deposit is valid. I normally use the 12 month fixed interest rate as an indicator to calculate when it’s worth transferring money into Thailand up against European bank interest rate, currency exchange rate and transfer fee(s) – needs to be a certain amount, but not that big, and often no more than just a few month deposit makes a gain.

As an investment product for profit I’m sure there are far better options than mutual fund bonds, however some of the mutual funds in equity etc. and tax-privileged LTF (Long Term Funds, minimum 5 years binding period) has performed quite well in the past years, but following market’s ups-and-downs. More experienced or “professional” investors may prefer you select their own portfolio. Kasikorn Thai have graphs and performance tables on their English language website (Kasikorn Asset Management).

http://www.kasikornasset.com/EN/MutualFund/ProductsFundFacts/Pages/Default.aspx

Thanks for the information on "Fund Books". It was the name that confused me. They are basically investment funds (usually stock market equities) offered by most commercial banks. . They can cover investments in different business groups (ie finance, entertainment, hotels etc. or be a combination of more than one type.)

Yes they're basically unit trusts or mutual funds. Just that some fund providers - mainly banks - in a rather old fashioned way give you a pass book with it in the same way they give a pass book with bank accounts. Modern fund managers like Aberdeen and UOB/ING don't issue them for their funds.

I have some with TMB AM they just sit in the safe and I never use them as I buy thru my bank just like any other fund manager that doesn't give a pass book. I think historically it was just to make Thais feel comfortable they have an account. The passbooks for TMB Gold Fund looks nice though because they are gold coloured and the kids like them, especially seeing their name in a book with gold on it

Cheers

Fletch

Edited May 6, 2014 by fletchsmile

AyG · May 7, 2014

(1) How much UK income do you expect to receive? (Necessary for consideration of effects of UK income tax.)

(2) Do you expect to be liable to UK inheritance tax? (It might be prudent to mitigate IHT.)

(3) Do you already have an emergency cash reserve?

(4) Will you have any ongoing expenses in Sterling? If so, how much?

(5) Do you have medical insurance which will continue for the rest of your life? (If not, provision needs to be made for unexpected, large expense.)

(6) Have you made a will? (Without one any inheritance objectives could be thwarted.)

Hi , to answer your questions,

1) I have UK pensions which exceed the personal allowance and was really thinking of taking my cash out of UK to avoid further taxation. However it seems that I may be able to invest tn the UK and avoid tax, according to some posts. Although I may have to dip into a slush fund on occassion mainly for my daughters education,we should manage quite well on my pensions. My main aim is to provide some security for my wife and child.

As of now I have no idea what sort of income I should expect to achieve for them. The widows pension at this time is about 4500 GBP, not a lot.

2) No

3) Very small amount, around 7000 GBP

4) Only tax on pensions

5) None, though I understand that Surin hospital is providing an insurance for expats.

6) I have a will in England covering my assets there, not as yet in Thailand as I only have the car and bank account of course this may have to change.

My initial thoughts:

(1) Definitely take your cash out of the UK to take any income out of the hands of the tax man. You should also look into transferring your existing pensions to a QROPS. Then you wouldn't have to pay tax on your pension income in the UK. (Managed right, you also wouldn't have to pay tax in Thailand.) Transfer usually works out as worth it if the value of the pension pot is greater than GBP 100,000.

(2) No IHT concerns. That simplifies things.

(3) GBP 7,000 for emergencies doesn't seem like enough. I'll return to this under (5).

(4) No requirement to generate GBP income.

(5) I believe that hospitals providing insurance for farangs was an administrative mistake, and that it no longer happens. At your age it's probably impossible (or cost-prohibitive) to get medical insurance now, so you'll have to put aside money for any medical emergency. In another topic Sheryl suggested that if self-insuring one should have THB 3,000,000 available. (You may want to check that figure, it's from memory.) That's about GBP 55,000. So you'll need to have that amount, plus a few months living expenses readily available. I don't know what your lifestyle will be like in Thailand, but I would have thought an extra GBP 20,000 might be about right.

(6) I presume that your will is in line with your intention of half your estate going to your wife and half to your daughter should you die before your daughter reaches university age. If not, you probably should make a new will. Given that it's a little complex (if your daughter has already had the university money when you die, you may want her to receive less than 50%) I'd recommend using a solicitor, rather than trying to do it yourself.

Would you be concerned about your daughter's ability (with help from her mother) to manage her inheritance? If so, you should discuss the possibilities with a solicitor and make suitable provision in your will. (It could be specified, for example, that she can only inherit once she reaches 18.)

So, for actual investments, I'd suggest putting THB 4,100,000 into long term (2/3/4 year) fixed deposits here. That's your emergency/medical emergency money. You'll lose some interest if you have to withdraw the money prematurely, but in an emergency you won't be too bothered about that. You might want to split that across a number of banks since the depositor protection limit is going to be lowered to THB 1,000,000 in a few years' time.

Put your slush fund amount into shorter term deposits (3-12 months). If you shop around you can get better interest rates with special offers. Bangkok Bank, for example, sometimes has 4 and 11 month deposits available with a 200,000 Baht minimum deposit. When you need to dip into your slush fund you could find that a deposit is about to mature. And if not, the actual amount of interest you'll lose by withdrawing early is negligible.

As for the remaining cash, invest it within a wrap account - preferably one that allows you to hold both unit trusts and investment trusts/ETFs.

Choosing appropriate investments that are suitably conservative and don't lead to foreign exchange risk against the Baht is pretty much impossible. Therefore it is probably best to choose investments that are exposed to a basket of currencies.

I'd suggest a (very traditional) 60:40 split between equities and fixed interest. (Given your age a higher proportion of bonds would be conventional wisdom. However, you're really investing for your family's future, rather than your own.)

Given that you'll already have 32% of your money in cash, I'd put the remaining 8% (GBP 19,000) into a bond fund. I'd suggest the iShares Global AAA-AA Government Bond ETF. It gives broad exposure to top quality government bonds across the globe.

(If you want to take a bit more risk, then I like iShares J.P. Morgan $ Emerging Markets Bond ETF.)

As for the equity portion, I'd split it two ways. Some (perhaps 10%, GBP 23,500) I'd put in an investment which gives direct exposure to the Thai stock market. Aberdeen New Thai investment trust has an excellent record in this area. (Just one caveat, there's some speculation at the moment that the trust may be wound up.) The rest I'd allocate between products that are managed conservatively to maintain value and have multicurrency exposure which is not fully hedged back to Sterling. Possibilities here that I like include:

- CF Ruffer European (fund)

- Personal Assets Trust (investment trust)

- Troy Trojan (fund)

- Newton Real Return (fund)

(Some people would advocate absolute return funds such as Standard Life Global Absolute Return here. Personally I don't like absolute return funds, but many people do.)

If you don't mind a bit more exposure to the UK I also like:

- Consistent Practical (investment trust)

- Ruffer Investment Company (investment trust)

- Ruffer Total Return (fund)

This selection of investments won't produce spectacular returns, but it also shouldn't produce dramatic falls in value. All being well it should have grown nicely in value by the time it comes to selling investments to fund your daughter's education.

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