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There are many features of Singapore that attract new expats to its shores: it’s safe, clean, efficient, boasts diverse cultures, a vibrant entertainment scene, incredible food and – very importantly – low taxes!
- No capital gains tax
- No estate tax
- No tax on dividends
- No tax on foreign sourced income
- Low corporate and individual taxes compared to other developed countries
With so many financial benefits, Singapore provides an opportunity to set yourself and your family up for a comfortable life when the time comes to return to Australia. To do so with financial confidence, it’s important that you spend your time as an expat considering how your money and investments can best be structured, invested and held to enable on-going tax free or tax concessional treatment in the future. Some options include:
- Holding investments through an investment linked life-insurance bond
This platform allows you to hold investments that you would otherwise hold in your personal name but with the added benefit of a life insurance element. Plus, where earnings and gains are accumulated within the bond for at least 10 years, the total amount can be withdrawn when you’re back in Australia tax free. Unlike superannuation, access is not based on reaching retirement age, and as such still provides you with flexibility over your money.
- Establishing a private foreign superannuation fund
Setting up for your retirement should not be ignored. The structure of Australian superannuation funds means that you’re restricted in how much you can contribute each year towards your retirement. A fund established outside of Australia is not subject to Australia’s rules and as such does not have these restrictions or limitations. There is greater flexibility on the types of assets that can be held.
- Australian superannuation
Although restricted in the amount of contributions allowed to be made each year, all earnings within the fund are taxed at 15% (10% on gains) and post-retirement age, tax free (up to a balance of approximately $1.7m). Therefore, thinking ahead can allow an accumulation of investments which, upon reaching retirement age, are accumulated tax free.
- Property investment
It’s common for Australians to want to maintain a foot in the Australian property market. However, the associated taxes go hand in hand. Consideration of owning property in other countries with a different tax system may be beneficial. One such country is New Zealand where their capital gains rules are more ‘relaxed’ than Australia’s.
In summary, there are a few key tax planning considerations that can help reinvent your financial journey as an expat in Singapore, through to a move back to Australia. If you’d like to learn more, Ilana Kramarov, Director of Tax for Select Investors Australia, would be delighted to arrange a private consultation. Contact Ilana via email at firstname.lastname@example.org to discuss your tax planning opportunities in more detail.
This information has been prepared in good faith, is in the nature of general comment only, and neither purports, nor is intended, to be advice on any particular matter. You should not act or rely upon any matter or information contained in or implied without taking appropriate professional advice which relates specifically to your particular circumstances. Select Investors (Australia) Pty Ltd expressly disclaim all and any liability to any person (whether a reader or not) who acts or fails to act as a consequence of reliance upon the whole or any part of this information.
If you would like to reach out for a complimentary review of your personal financial situation, please email email@example.com to arrange a consultation.
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.