5.5 Investment choices – Tax saving Fund – RMF

LTF stands for Long Term Equity Fund and RMF stands for Retirement Mutual Fund which is a special fund that gives the investor rights to use the yearly capital to reduce the tax. Details are as follows.

RMF

1. What is RMF?
RMF stands for the Retirement Mutual Fund is a mutual fund type (mutual
fund means collecting capital from many investors and have a professional that is a company managing investment funds according to policies set forth)
which has a special purpose different from common mutual fund. RMF is a tool in saving the money to use in retirement, it is officially support and tax benefits to investors as a motivation

2. RMF suits anyone?
It suits people of all groups to save money for retirement. Especially People who have no savings for retirement benefits such as provident funds or Government Pension Fund (GPF) to support, or they may have it but also has the savings power to increase more than that.

3. What are RMF Investment policies?
There are many policies of investments like the mutual funds from the general fund with low risk, focused investments in debt instruments such as bond, funds with moderate risk that may be a combination of investments in debt securities and equity, to funds with high level of risk which focus on investment in equity shares such as share purchase warrants (warrant).

4. What are the differences between the RMF and the other funds?
1. If the conditions are fully invested, tax benefits.
2. No pledge or transfer the units to be a guarantee.
3. No dividend.

5. What are the RMF Investment conditions?
To receive tax benefits form RMF investment, the following conditions must be achieved:
• continuing to accumulate money by buying RMF Investment unit not less than once a year.
• invest a minimum 3% of yearly income, or 5,000 baht (depending on whichever is lower).
• invest up to 15% of yearly income, or up to 500,000 Baht
• must not suspend the purchase of units over a consecutive year (excluding years without any income because 3% of 0 income was 0).
• The redemption can be made when the investors are at least 55 years old and have invested not less than five years.

6. What are the RMF tax benefits?
If you follow the terms of investment, investors are entitled to RMF tax benefits in two ways:
First way: Income tax from bought units in the RMF will be except as actually paid up to 15% of funds in each year when combined with savings from one fund or Pension Fund (GPF) it should not exceed 500,000 Baht PVD / GPF + RMF (? 15% of money)? not exceed 500,000 Baht
Second way: The earnings from the redemption (capital gain) are free of income tax

7. What are the wrong conditions of RMF?
1. Suspend the purchase of unit trusts more than one consecutive year.
2. Minimum investment is not as the criteria defined.
3. Redemption before the minimum of 55 investor ages.
4. Redemption prior to full investment.
If the five year follow either one is considered an error investment condition, unless the investors are death or disability, making them impossible to abide by these conditions will not be considered wrong investment condition.

8. What happens to investors if investors broke the terms of investment?
Investors will not receive tax benefits anymore.
And they must do the following:
1. If the investment is less than five years, and breach of condition
• must refund the tax exemption in the past five years (from calendar year).
• The redemption must pay Net surplus (capital gain) tax by the earnings received from the sale sum up with the total income of the year. In practice, when the investors redeem, the asset fund management will deduct withholding tax of 3% profit surplus, then when the investors are to apply the tax, they will be calculated once again whether they have to pay additional taxes or not
2. If investment since five years, and a breach of condition
• must refund the tax exemption in the past five years (from calendar year).
Payment of a tax in section 1 and 2 must be paid by March of next year in the wrong conditions and/or Redemption. Otherwise they will have to pay an additional penalty payment.

9. Checklists before investing in the RMF
Answer yourself that you want to save money for retirement, discipline of regular savings and long-term continuity.
Know yourself – know your investment objective, how much money to save and accept any incoming investment risk.
Know products – knowledge of RMF investment policy of interested such as which are the low, moderates or high risk investments.
Know the company – Including quality of services, management fee and other expenses.
Select the appropriate investment in RMF that suits you, also remember the principle of diversification in investment “Do not put your eggs in one basket leaves”.