International tax advice wanted

[akay]

I was born in Hong Kong, hold a British passport, working in Singapore, have properties / rental income from the UK. I'm sure I can be more tax efficient here. I'm looking for international tax advice. Any recommendations?

[Strong Eagle]

I have no tax specialist to recommend, except to say that you will be best served by engaging a tax specialist in which your properties are located.

As a general rule, international tax law follows two general principles.

a) Earned income is taxed in the country in which it is earned. You work in Singapore, you get taxed in Singapore.

b) Passive income, ie, real estate, is generally taxed in the country where the property is located. Example: You work and live in Singapore but own property in the USA. Singapore doesn't tax your earnings from your property but the USA does.

[PNGMK]

As the Panama Papers showed this is a highly specialized field. I would look into setting up trusts, offshore holding corporations for your income producing assets and taking advantage of living in a very low tax regime (Singapore). A lot of this type of discussion needs to happen face - face; because people are conflating tax minimisation with tax evasion the good advisers come recommended by word of mouth now. I am going through a similar issue.

[Kelman]

A lot depends on your domicile and if you remit the income into another country, but Strong Eagle's rule of thumb isn't far off. Trusts or holding companies may help, but it really depends on your specific situation.

One left field option, depending on the type of property, would be to hold them in a pension fund. Not particularly sophisticated, it can be effective.

[PNGMK]

A lot depends on your domicile and if you remit the income into another country, but Strong Eagle's rule of thumb isn't far off. Trusts or holding companies may help, but it really depends on your specific situation.

One left field option, depending on the type of property, would be to hold them in a pension fund. Not particularly sophisticated, it can be effective.

That's actually an excellent point. Australians can set up SMSF and hold properties in those funds for example.

[Strong Eagle]

A lot depends on your domicile and if you remit the income into another country, but Strong Eagle's rule of thumb isn't far off. Trusts or holding companies may help, but it really depends on your specific situation.

One left field option, depending on the type of property, would be to hold them in a pension fund. Not particularly sophisticated, it can be effective.

That's actually an excellent point. Australians can set up SMSF and hold properties in those funds for example.

What is the benefit of doing this, PNGMK? Is this like setting up a self directed IRA in the USA where I can buy and manage real property, and not assume any tax consequences until I withdraw money from the IRA?

[PNGMK]

A lot depends on your domicile and if you remit the income into another country, but Strong Eagle's rule of thumb isn't far off. Trusts or holding companies may help, but it really depends on your specific situation.

One left field option, depending on the type of property, would be to hold them in a pension fund. Not particularly sophisticated, it can be effective.

That's actually an excellent point. Australians can set up SMSF and hold properties in those funds for example.

What is the benefit of doing this, PNGMK? Is this like setting up a self directed IRA in the USA where I can buy and manage real property, and not assume any tax consequences until I withdraw money from the IRA?

Super is CPF in short. You can push in funds that have a high marginal tax rate and receive a discounted rate on tax (15%) instead. The SMSF can buy and hold property (or other investments) and even borrow funds. After retirement age funds can be withdrawn at a concessional tax rate. It's not as good as the IRA fund but is all Australia has. I see a lot of multi family dwellings bought by these funds. They have taken up the gap between family trusts and private corporations for individuals.

[Girl_Next_Door]

A lot depends on your domicile and if you remit the income into another country, but Strong Eagle's rule of thumb isn't far off. Trusts or holding companies may help, but it really depends on your specific situation.

One left field option, depending on the type of property, would be to hold them in a pension fund. Not particularly sophisticated, it can be effective.

The controversial revolving Panama papers are individuals setting up holding companies, of which some to hold assets, and a handful to evade taxes. Setting up and ongoing maintenance of trust or holding companies can be expensive. It all depends on how much assets you own. If you only have 1 or 2 properties, a simple tax adviser would suffice. I also have a London property, and the tricky part is, you need to be VERY disciplined towards your tax filing. There is no letter, no communication or any sort, to remind you to do the tax filing. If you are based in Singapore (like us), it is too easy to conveniently forget to do the tax filing. This is a conscious effort that needs to be put in, for a reminder.

All the big 4 accounting firms have a tax department, so you can contact them, for a tax adviser. I am not a fan, but they have international connections, so they can get complex questions answered than a smaller tax firm.