SRS investment options

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smoulder
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Re: SRS investment options

Post by smoulder » Thu, 26 Aug 2021 1:48 pm

malcontent wrote:
Thu, 26 Aug 2021 12:56 pm
And since this is an expat forum, take note that the maximum annual SRS contribution for EP holders is $35.7k (considering you don’t have CPF). Also note that an EP holder can withdraw their SRS in full after 10 years without penalty and you’ll only pay tax on half of the withdrawn amount. If you are no longer resident in Singapore at the time of the withdrawal you will pay 15% on half of the first $320k withdrawn (effectively 7.5%), or resident tax rates if it’s more. The tax savings is essentially the difference between your top tax rate and the future effective tax payable. If you have SPR/SC, even better, you could possibly avoid tax completely on withdrawal.
Yes good point. The upper limit for SRS contributions is higher for EP holders.

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Re: SRS investment options

Post by malcontent » Thu, 26 Aug 2021 2:08 pm

oceanphilic wrote:
Thu, 26 Aug 2021 10:27 am
Just curious, is there any online guide to performing the SRS > CDP > DTC transfer? Should we approach IBKR or CDP for advice? Just concerned that IBKR would log it under S27 instead of SPY (unless it doesn't really matter once it's in IBKR since there's international access and it's basically the same thing).
It’s basically two forms to fill out.

1. The SRS to CDP transfer is done when you withdraw from your SRS operator. This is called an in-kind transfer or withdrawal in the form of investments.

From Jul 2015, SRS members will be able to apply to their SRS operators to withdraw an SRS investment by transferring the investment out of their SRS accounts (e.g. into their personal Central Depository (CDP) account), without having to liquidate their SRS investments.

https://www.ifaq.gov.sg/mof/apps/fcd_fa ... x#FAQ_1605

2. Once the shares are in your CDP account, submit the form below to do a cross-border transfer to the US.

https://api2.sgx.com/sites/default/file ... logo_0.pdf

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Re: SRS investment options

Post by Wd40 » Thu, 26 Aug 2021 3:49 pm

malcontent wrote:
Thu, 26 Aug 2021 12:56 pm
And since this is an expat forum, take note that the maximum annual SRS contribution for EP holders is $35.7k (considering you don’t have CPF). Also note that an EP holder can withdraw their SRS in full after 10 years without penalty and you’ll only pay tax on half of the withdrawn amount. If you are no longer resident in Singapore at the time of the withdrawal you will pay 15% on half of the first $320k withdrawn (effectively 7.5%), or resident tax rates if it’s more. The tax savings is essentially the difference between your top tax rate and the future effective tax payable. If you have SPR/SC, even better, you could possibly avoid tax completely on withdrawal.
EP holders better stay away from SRS altogether unless you are in like 200k salary range. Also, you might end up having to pay tax in your home country at the point of withdrawal. The risk and uncertainty of locking in for so long in a country which is not your home, is not worth it.
Last edited by Wd40 on Thu, 26 Aug 2021 3:58 pm, edited 1 time in total.

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Re: SRS investment options

Post by smoulder » Thu, 26 Aug 2021 3:58 pm

Wd40 wrote:
Thu, 26 Aug 2021 3:49 pm
malcontent wrote:
Thu, 26 Aug 2021 12:56 pm
And since this is an expat forum, take note that the maximum annual SRS contribution for EP holders is $35.7k (considering you don’t have CPF). Also note that an EP holder can withdraw their SRS in full after 10 years without penalty and you’ll only pay tax on half of the withdrawn amount. If you are no longer resident in Singapore at the time of the withdrawal you will pay 15% on half of the first $320k withdrawn (effectively 7.5%), or resident tax rates if it’s more. The tax savings is essentially the difference between your top tax rate and the future effective tax payable. If you have SPR/SC, even better, you could possibly avoid tax completely on withdrawal.
EP holders better stay away from SRS altogether unless you are in like 200k salary range. Also, you might end up having to pay tax in your home country at the point of withdrawal. The risk and uncertainty of locking in for so long in a country which is not your home, is not worth it.

BTW, this is not really an expat forum anymore. Expats don't really have any forum for discussion in SG anymore as we don't see any pathway in SG.

This forum is for kind of people who are in the middle, neither locals nor foreigners.
Out of curiosity, would you end up paying tax on SRS withdrawals in India whenever you go back? How would it be different from taking back your non - SRS investments back?

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Re: SRS investment options

Post by Wd40 » Thu, 26 Aug 2021 4:02 pm

smoulder wrote:
Thu, 26 Aug 2021 3:58 pm
Wd40 wrote:
Thu, 26 Aug 2021 3:49 pm
malcontent wrote:
Thu, 26 Aug 2021 12:56 pm
And since this is an expat forum, take note that the maximum annual SRS contribution for EP holders is $35.7k (considering you don’t have CPF). Also note that an EP holder can withdraw their SRS in full after 10 years without penalty and you’ll only pay tax on half of the withdrawn amount. If you are no longer resident in Singapore at the time of the withdrawal you will pay 15% on half of the first $320k withdrawn (effectively 7.5%), or resident tax rates if it’s more. The tax savings is essentially the difference between your top tax rate and the future effective tax payable. If you have SPR/SC, even better, you could possibly avoid tax completely on withdrawal.
EP holders better stay away from SRS altogether unless you are in like 200k salary range. Also, you might end up having to pay tax in your home country at the point of withdrawal. The risk and uncertainty of locking in for so long in a country which is not your home, is not worth it.

BTW, this is not really an expat forum anymore. Expats don't really have any forum for discussion in SG anymore as we don't see any pathway in SG.

This forum is for kind of people who are in the middle, neither locals nor foreigners.
Out of curiosity, would you end up paying tax on SRS withdrawals in India whenever you go back? How would it be different from taking back your non - SRS investments back?
I would take my money back to India within 2 year of leaving SG, during the RNOR period, where you are not taxed on your foreign earnings.

When you are a tax resident in India you are liable to pay tax on your foreign generated income. So good luck explaining to Indian tax authorities that if was income you earned while you were in SG. Anyways on the capital gains you have to pay tax in India.

The whole hassle is not worth it.

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Re: SRS investment options

Post by smoulder » Thu, 26 Aug 2021 4:42 pm

Yes quite a hassle. They will try to tax you on the way in and try to stop you on the way out (the second scenario is what I'm going to face in a few years).

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Re: SRS investment options

Post by malcontent » Thu, 26 Aug 2021 6:07 pm

Wd40 wrote:
Thu, 26 Aug 2021 3:49 pm
EP holders better stay away from SRS altogether unless you are in like 200k salary range. Also, you might end up having to pay tax in your home country at the point of withdrawal. The risk and uncertainty of locking in for so long in a country which is not your home, is not worth it.
I used to think the same way and never touched SRS all these years, but starting last year my employer started forcing it on us, so either I accept SRS or forego the money. From a US tax perspective, it’s no different than depositing my compensation into an ordinary bank account. For that reason, there won’t be any US tax to pay at the end other than capital gains taxes if I sell S27… but I don’t plan to sell, in 2030 I will just pay the 7.5% tax to Singapore and transfer the shares to my US broker and keep holding them as part of my overall portfolio. In the future, if I’m able to keep my spouse outside of the US tax system, I can gift her the shares and then she can sell them tax free.

Since S27 is not a PFIC there are no complex tax or reporting issues for me. Last year I even got a refund on my US tax return for the 30% dividend withholding tax, so it all seems to be working better than I imagined.

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