Moving out of UK but currently own a house here - what to do?

[Sathereend]

Hi!

I was offered an internal job posting within my company based in their Singapore office, however, I currently own my house in the UK and will be putting it up for rent. However, I'm confused how income tax would work on that. If I had it paid into my Singapore account so I can actually use the money, will it be subject to income tax in Singapore or in the UK? Looking at sites like this tax calculator I would be over the personal allowance amount with just the money from the rent in the UK, and with my income there's no question I'd be subject to tax in Singapore.

Can anyone advise? Thanks!

[Strong Eagle]

Generally, passive income, ie, which includes rents from properties, is taxed in the country in which the property resides. Therefore, your rental income is taxable in the UK, not in Singapore.

Conversely, active income, ie, earned income such as salary and commissions, is taxed in the country in which you are resident. So, the salary you are being paid in Singapore is taxable only in Singapore.

Note that these are the general rules... specific countries have enacted additional rules and regulations covering residency, real estate ownership, etc.

[PNGMK]

My general advice is to sell your home. Sounds crazy but not really. It's one less thing to worry about in your absence and it means absolutely no issues establishing tax residency in Singapore and cutting it in the UK. I see a lot of Aussies doing this now and I think more Brits are starting to do it. SE is correct but there are nuances around tax residency in the UK I am not familar with.

[Strong Eagle]

My general advice is to sell your home. Sounds crazy but not really. It's one less thing to worry about in your absence and it means absolutely no issues establishing tax residency in Singapore and cutting it in the UK. I see a lot of Aussies doing this now and I think more Brits are starting to do it. SE is correct but there are nuances around tax residency in the UK I am not familar with.

While you need to carefully check your overall residency status, I am pretty sure that for the UK, so long as you are not in the country for more than 183 days, you will not be tax resident for active (earned income purposes). You will be liable for taxes on all other income. I refer you to two websites.

https://www.litrg.org.uk/tax-guides/mig ... esident-uk

https://www.gov.uk/government/publicati ... basis-rdr1

While there is merit in PNGMK's advice to sell to reduce your complications in life, there is another side to consider. In my case, I kept my house in the USA, rented it out to cover the mortgage, and moved back into it when I returned to the USA. I did this for two reasons. First, all the American expats I talked to where near unanimous in keeping a primary residence in the USA unless you knew for sure you wouldn't be coming back.

And second, properties were appreciating in Houston, such that I could not find an alternative investment (especially after sales and closing costs), that would return the same rate as my house appreciation. And that meant, I'd be coming back to the USA behind the eight ball. My cash nest egg from the sale's appreciation would not have kept up with the increase in the price of homes, meaning that I would end up in a poorer house or having for fork out more cash in order to buy what I left behind.

So certainly, a careful analysis of your circumstances is warranted.

[PNGMK]

Agreed SE that losing pace in a rising market is a concern.