NnnI recently attended a seminar on saving for retirement at the Emerald Hotel. During one talk, the speaker mentioned a "reverse mortgage" as an alternative that Thailand urgently needs. What does this mean? And how could it help those who have not saved enough for retirement? I didn't have the guts to ask at the seminar.
— Badmboi
Answered by ...Teera Phutrakul CFP
A reverse mortgage is essentially a loan to a homeowner that enables the conversion of part of the value or equity in the home to cash. The product was conceived as a means to help retirees with limited income use the accumulated wealth in their home to pay for basic living expenses and health care. That said, there is no restriction on how the proceeds may be used.
The loan is called a reverse mortgage because the traditional mortgage payback stream is reversed. Instead of making monthly payments to a lender, as with a traditional mortgage, the lender makes payments to the borrower.
You are not required to pay back the loan until the home is sold or otherwise vacated. As long as you live in the home, you are not required to make monthly payments towards the loan balance, but you must remain current on your property taxes, homeowner's insurance and condominium fees (if you live in a condo).
nnnIt's time to file personal income tax forms, and I am looking for tips to save as much as possible. I maxed out the LTF/RMF and insurance policy rebates. Thanks.
— Deva
Answered by ...Teera Phutrakul CFP
The overall objective of tax planning is to structure your affairs to legally minimise the amount of tax you have to pay. You can accomplish this by adhering to the four Ds of taxation: deduct, defer, diminish and divide.
Deduct: Take advantage of all possible tax deductions and allowances on top of your LTF/RMF and insurance premium namely: personal, spouse, child, education, parents and health care allowances. If you have a mortgage, interest payments are deductible as well. If you are a member of Social Security Fund, your contributions are also tax deductible up to Baht 9,000. The same applies to charitable contributions but not exceeding 10% of the income after standard deductions and the above allowances.
Defer: Let's suppose you have a big bonus. If possible, choose to receive the bonus in January instead of December. In this way, the amount will be deferred to another tax year.
Diminish: Position investments in investment vehicles such as LTFs, RMFs, which attract the least amount of tax, having full regard for your risk tolerance and asset allocation strategy.
Divide: Split income among family members or business partners to the maximum degree possible while considering other personal objectives. However, this strategy is being heavily scrutinised by the Revenue Department. So make sure your financial affairs are in order and be prepared to be audited by the tax man.
nnnLast year I worked in two foreign countries for three months each on contract work. The remaining six months I worked in Thailand, so I earned from three different companies in three countries. How do I file my taxes and pay as little as possible? Do I have to report my income in all three countries?
— Sima
Answered by ...Teera Phutrakul CFP
Taxpayers are classified into "resident" and "non-resident". Resident means any person residing in Thailand for a period or periods aggregating more than 180 days in any tax (calendar) year. A resident of Thailand is liable to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand. A non-resident is subject to tax only on income from sources in Thailand.
I would think you would be classified as a resident since you are in Thailand for more than six months.
The Thai Financial Planners Association is the Certified Financial Planner (CFP) trademark licensing authority in Thailand. It is a self-regulated, non-profit group of financial advisers and experts from various organisations set up to give advice to investors. Questions can be submitted through wealthcare@bangkokpost.co.th or the TFPA webboard, www.tfpa.or.th