Financial Advice Please - Young couple relocating confused about taxes/saving etc

[mosesandhelmut]

Hello,

I am hoping someone here will be able to give some sound advice as we have done some research online and are quite confused about our tax status, best ways to save etc.

Our background -

My husband and I will be relocating to Singapore in October. My company is sending me out to open our Singapore office & I will be the first employee there. We have a Singapore entity and at present it looks as though I will be paid in SGD, our company will be paying our rent. My husband will be joining me on a dependents pass, however it looks as though there is a strong chance he will be receiving a job offer in the coming weeks for a recruitment firm with offices in Singapore - at this stage we are unsure what currency he will be paid in but again SGD looks likely. At present we only intend to relocate for 1 year, perhaps 2. If my husband is approved for this job, we would like to put the majority of his earnings into a savings account.

Since we are recently married, we have received some money as a wedding gift (approx 5000 GBP) which we are looking to place into a UK help to buy government scheme account, that we can pay into from Singapore. Our hope is that when we return to the UK we will have saved enough to be a lot closer to the dream of buying our first home.

With this in mind we are a little confused about what our tax situation will look like whilst we are abroad in Singapore, will we be paying SG tax only or still UK or both? Furthermore we have read some information about potentially needing to pay taxes in both countries depending on what time of year we relocate? In addition, is there any paperwork or applications we need to complete in advance to help with this. Another issue we have is that an advisor at our local bank branch mentioned that many UK help to buy government schemes are invalid for young people who have spent time abroad within 3 years from taking out a mortgage - although this is the first time we have heard this.

We are very inexperienced in this area and could really do with a 'dummies guide'. We really appreciate any advice you may have for a young couple starting out and hoping to do some hardcore saving the next 12 months.

Thanks in advance!

[ecureilx]

We are very inexperienced in this area and could really do with a 'dummies guide'. We really appreciate any advice you may have for a young couple starting out and hoping to do some hardcore saving the next 12 months.

Thanks in advance!

If you want to calculate Singapore tax rates, check at http://www.iras.gov.sg

There's a simple tax calculator there

Can't answer the rest but a search here may throw some results, as I recall the UK/SG taxation issue was brought up a few times.

[MikeJones]

For the tax year in which you re-locate you will need to pay tax on your UK earnings up until you leave the UK, if you are not self employed this is likely already being paid via PAYE. When you leave you fill in a P85 tax form, available from https://www.gov.uk/government/publicati ... -right-p85, and any tax refund or relief will be calculated for the tax year based on your earnings up until the time you left. As you are leaving in October and have therefore only been earning for just over half the UK tax year you will likely receive a refund on your UK tax. Personally I left the UK in November 2014 and the refund was something like half a months pay equivalent, however the amount will vary widely depending on your earnings and applicable tax rates.

Once you've arrived in Singapore you will be paying taxes on your Singapore earnings at Singapore rates as per the calculators Ecurelix has referenced. If you are in the country less than 183 days for the first year (Singapore tax years run January to December) you may be charged the 15% non-resident rate, however if your contract and/or employment pass is for 2 years or more IRAS may tax you at the lower resident rates. In my case I only worked for a month in the first tax year and my earnings were under the $20,000 tax free threshold so I paid no tax for that first month. In any case budget for the 15% tax rate just so you are covered if that is what is applied.

Mike

[BBCWatcher]

To answer the home savings part of your question, I assume you're referring to the Help to Buy ISA. You can open and contribute to such an ISA while you are still a U.K. resident, up to the maximum initial deposit plus any subsequent months (at up to 200 pounds/month) while you're still a U.K. resident. However, you have to stop contributing to all U.K. ISAs while you're living outside the U.K. unless you're working for the Crown.

I'm not aware of any Help to Buy ISA waiting period when you return. It appears you can resume contributions as soon as you return and withdraw funds to buy your first home, with whatever bonus you qualify for (maximum 3,000 based on total contributions of 12,000 or more). Check that, of course. Of course it's harder to get up to 12,000 (or more) while you're living overseas and cannot contribute.

So yes, you'll have to take loss of ISA contributions into account when planning your finances. That's just how it works. You'll probably have to raise your U.K. taxable savings to compensate for the loss of the U.K. tax advantaged contributions while you're away.