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You may be considering if you should continue to live in Singapore given the rising cost of living and reduced expat benefits. Especially when you have three kids going to international school, the tax advantage of being in Singapore reduces. Once you make that decision, it is all about planning your move to Australia, understanding the tax impact and your obligations.
Singapore exit tax
You are required to clear all giro tax payments and the year-to-date tax bill. Employers will withhold payment of all monies due to you, to cover this. If you have any existing share options or awards which have yet to be exercised or vested, you will be deemed to have derived gains from these at the point of tax clearance. This also applies to those with selling restrictions.
Residency and 183 days rule
The Australian Tax Office looks at when you start to reside in Australia as the date your tax residency starts, which is commonly referred to as part year resident. This is important to establish as worldwide income will be taxed from that date and your tax-free threshold will be adjusted.
Bonus related to work outside of Australia but received in Australia
If this is paid after you have become an Australian tax resident, the bonus should be reported as foreign income.
Income tax losses
You can’t control the amount of losses you wish to utilise. For example, you have income tax loss of $20,000 from the prior years. You become a tax resident in June and your total income is $8,000. You are required to utilise $8,000 of the loss even though this is within the tax-free threshold. Therefore, your carried forward income tax losses will now be $12,000.
Moving into one of your rental properties
Repairs must be made and paid for in the same financial year you last received rent. A common expense is repainting, and should the service include exterior walls you will need to get a cost break down as only the cost to repaint the interior is considered maintenance and deductible against rent.
Transferring cash from a bank account
No tax implications. When the value is more than A$10,000 you need to advise AUSTRAC.
Shares purchased whilst you were living overseas
The market value of shares on the date you become a tax resident becomes your cost base. For the discount capital gains to apply, you must hold it one year from this date.
Offshore life insurance bond
The policy year does not reset because of a change in residency. The 10-year period starts from the policy start date provided the 125% rule was not breached. Any withdrawals from the 11th year will be tax free in Australia subject to the bond being an eligible policy.
Private health insurance
To avoid paying Medicare levy surcharge (MLS), when your income for MLS purposes is above a certain threshold, you must be covered by an Australian based registered health insurer.
Given that every individual situation and circumstances differs. Please contact us to discuss your specific circumstances on diana.chua@sjpp.asia or +65 8807 2552.
The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax relief depends on individual 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.
The ‘St. James’s Place Partnership’ and the titles ‘Partner’ and ‘Partner Practice’ are marketing terms used to describe St. James’s Place representatives. Members of the St. James’s Place Partnership in Singapore represent St. James’s Place (Singapore) Private Limited, which is part of the St. James’s Place Wealth Management Group, and it is regulated by the Monetary Authority of Singapore and is a member of the Investment Management Association of Singapore and Association of Financial Advisers (Singapore). Company Registration No. 200406398R. Capital Markets Services Licence No. CMS100851. St. James’s Place Wealth Management Group Ltd Registered Office: St. James’s Place House, 1 Tetbury Road, Cirencester, Gloucestershire, GL7 1FP, United Kingdom.Registered in England Number 02627518.
