Our five tips to help you manage your finances, by Huw Wedlock, Director, The Fry Group Singapore.
If you’re moving to Singapore for a new life, among the many things you’ll be doing to get settled, it’s important not to forget your finances. Follow this short list to ensure you’re prepared:
1. Your pension
You may not receive tax relief on contributions to a UK pension to the same extent as before, though you could still make some form of contribution for a limited time – subject to conditions.
Seek advice about starting a fund in Singapore if you’re planning to stay several years. Because employers must pay into local employees’ Central Provident Fund (CPF), some provide non-Singaporean employees with a similar amount to invest at their discretion.
If you already have a foreign pension, think about next steps. If this is your last destination as an expat before returning to the UK, find out what will happen to your foreign pension when you move. The UK government is strict about moving pension pots in and out of the UK so check to avoid a tax penalty.
2. Tax considerations
To start your period of non-residence, download a P85 Form from HM Revenue & Customs’ website to submit when you know your new address. This will get you off on the right foot with your non-resident status and tax.
To be classified non-resident, you must satisfy the conditions under the Statutory Residence Test. The number of days you can spend in the UK is reduced by the number of ‘ties’ you have there. But if you make a “lock, stock and barrel” move away from the UK, you will probably break UK residency from the date you leave. However, as each case is different, do look at your own situation in detail.
During your non-residence period, earnings from non-UK sources are generally exempt from UK tax – there are a couple of rare exceptions to this rule, with one being if you work for the British Government.
3. Your property
Most expats with UK properties will rent them out. Consider joining the Non-Resident Landlord Scheme to prevent your rental agent from withholding Income Tax on the income they administer for you. Profits must still be reported in your annual UK Income Tax return.
If you’ll be in Singapore for a while and decide to sell, research the capital gains implications. Non-residents still pay Capital Gains Tax on profits from selling UK residential property, although if it was your Principal Private Residence, you do receive a degree of relief. Any Capital Gains Tax only applies to gains accumulated after 6 April 2015 for those who are long term non-UK residents.
4. Health Insurance
Healthcare in Singapore can be expensive. If your company provides coverage for you and your family, check its extent. Most expats, particularly those with children, take out another policy. If you will be travelling internationally, consider a global policy.
5. Your Will
Seek legal advice about whether your Will and any Power of Attorney are valid in both the UK and Singapore. If the unthinkable occurs and you and your spouse pass away, your children may be placed under local authority care, so it’s worth understanding what this would entail.
Moving to Singapore is a well-trodden path and a great place to live! If you’re unsure about your financial situation, it’s always best to contact an experienced financial adviser.