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Q. I am Australian and new to Singapore…what are some top tax and financial tips I should be aware of?

  1. Make the most of your time in Singapore: Singapore may have a low tax rate but do not be tricked by this, as it is one of the most expensive cities in the world to live in. Set a sensible budget, including savings, holidays and entertainment and stick to it.
  2. Changes in Capital Gains Tax: You may not be entitled to a principal place of residence exemption on the sale of your family home if you sell it while you live offshore. Know the facts before you decide to sell property and get the right advice.
  3. Take advantage of tax concessions on investing offshore: Singapore has no tax on dividend payments or Capital Gains Tax (CGT). There are also ways to structure your offshore investment to be CGT free when you return to Australia if you hold them for 10 years with no tax during accumulation, in comparison to the top marginal rate of tax at 49% in Australia.
  4. Family protection: It is important your insurance still covers you during your time abroad. Singapore is one of the most competitive insurance markets in the world, offering cost effective and international personal insurance products.
  5. Know the residency rules and seek the right advice: The Australian Tax Office (ATO) have complex and sometimes ambiguous tax residency rules. It’s important to understand your residency position and seek advice if you decide to live cross border to your family, as this could quickly undo any savings you are gaining from the low tax rates in Singapore. A good example of this is deeming sale of your shares on exit of Australia.
  6. Continue to build your savings: Remember that you generally don’t receive any superannuation contributions during your time as an expat so it is important to continue to save for your retirement, children’s education or future property purchase while offshore.
  7. Think before you pay off your deductible debt: The ATO considers a repayment of your loan a permanent event, and even though a loan may be secured to a property, redrawing the loan could re-classify it and remove the ability to deduct interest payments in the future.
  8. Multijurisdictional wills: Consider an international will to assist in a faster and streamlined probate process. Furthermore, a temporary guardianship can help avoid your children being placed into the care of the state should the unthinkable occur.
  9. It’s important to seek the right advice and make the most of your time here in Singapore, as it is a wonderful place to live and work. Ensure that you have no regrets and leave in better financial shape than you arrived.

Please contact Tristan for an obligation free discussion of your Australian taxation and planning needs on +65 9108 6398 or tristan.perry@selectinvestorsaustralia.sg

** The levels and bases of taxation, and relief from taxation can change at any time. The value of any tax relief depends on individuals’ circumstances. You are advised to seek independent tax advice from suitably qualified professionals before making any decision as to the tax implications of any investment.