Singapore Expats Forum

Guaranteed Exchange rate - would you take it?

Discuss about the latest news & interesting topics, real life experience or other out of topic discussions with locals & expatriates in Singapore.

ayrej2
Newbie
Newbie
Posts: 8
Joined: Tue, 01 Jul 2008
Location: London, UK

Guaranteed Exchange rate - would you take it?

Postby ayrej2 » Wed, 23 Jul 2008 4:33 am

Ok,

So you have to make the choice:

a) Have your UK salary paid to you in Singapore Dollars at a gauranteed exchange rate of 2.8173.

Avoid any downside, but miss any up.
Like now, if the exchange rate slips you're quids in (2.7046)
If it goes the other way though, you're not seeing the benefit.

b) Have your UK salary paid to you into your UK bank account and exchange what you need yourself via the daily exchange rate.

Ride the market and pay any fees.

Obviously, to pick the correct answer you need a crystal ball.

http://finance.yahoo.com/currency/convert?from=GBP&to=SGD&amt=1&t=5y

Looking at the past 2.8 doesn't seem that good, but where are we heading in the future?

Ed

User avatar
durain
Director
Director
Posts: 3666
Joined: Thu, 23 Aug 2007
Location: Location: Location: Location:

Postby durain » Wed, 23 Jul 2008 4:59 am

what's this week lottery number then? :roll:

User avatar
Saint
Director
Director
Posts: 3535
Joined: Thu, 16 Jun 2005
Location: The Juban Stand, Boat Quay
Contact:

Postby Saint » Wed, 23 Jul 2008 5:14 am

Where do you want to be taxed?

ayrej2
Newbie
Newbie
Posts: 8
Joined: Tue, 01 Jul 2008
Location: London, UK

Postby ayrej2 » Wed, 23 Jul 2008 5:17 am

dunno durain, obviously you'd need a crystal ball to answer that :roll:

Dosn't stop people every week from trying to guess though :wink:

User avatar
Saint
Director
Director
Posts: 3535
Joined: Thu, 16 Jun 2005
Location: The Juban Stand, Boat Quay
Contact:

Postby Saint » Wed, 23 Jul 2008 5:20 am

ayrej2 wrote:dunno durain, obviously you'd need a crystal ball to answer that :roll:

Dosn't stop people every week from trying to guess though :wink:


i'll say again, where you want to pay tax?

ayrej2
Newbie
Newbie
Posts: 8
Joined: Tue, 01 Jul 2008
Location: London, UK

Postby ayrej2 » Wed, 23 Jul 2008 5:23 am

Saint wrote:Where do you want to be taxed?


In this case, it's not really a consideration. My company calculates everything on a Hypothetical tax basis. Tax neutral I think they call it.

Basically, they work out my UK Net pay, add any uplifts etc on that and pay me net where ever I elect. The Tax liability/benefit is theirs and as such I will not see any tax benefit from avoiding UK banks.

Hope that makes sense?

Edit: sorry Saint, I was replying to the first post when you posted. Wasn't ignoring you :)
Last edited by ayrej2 on Wed, 23 Jul 2008 5:35 am, edited 1 time in total.

User avatar
Saint
Director
Director
Posts: 3535
Joined: Thu, 16 Jun 2005
Location: The Juban Stand, Boat Quay
Contact:

Postby Saint » Wed, 23 Jul 2008 5:34 am

ayrej2 wrote:
Saint wrote:Where do you want to be taxed?


In this case, it's not really a consideration. My company calculates everything on a Hypothetical tax basis. Tax neutral I think they call it.

Basically, they work out my UK Net pay, add any uplifts etc on that and pay me net where ever I elect. The Tax liability/benefit is theirs and as such I will not see any tax benefit from avoiding UK banks.

Hope that makes sense?


Have you looked into the current Singapore tax rates?

ayrej2
Newbie
Newbie
Posts: 8
Joined: Tue, 01 Jul 2008
Location: London, UK

Postby ayrej2 » Wed, 23 Jul 2008 5:37 am

yep I know, sucks to be me :lol:

On the flip side, if they ever send me to Norway....

User avatar
Saint
Director
Director
Posts: 3535
Joined: Thu, 16 Jun 2005
Location: The Juban Stand, Boat Quay
Contact:

Postby Saint » Wed, 23 Jul 2008 5:46 am

ayrej2 wrote:yep I know, sucks to be me :lol:

On the flip side, if they ever send me to Norway....


So what do you want the answer to then?!

User avatar
durain
Director
Director
Posts: 3666
Joined: Thu, 23 Aug 2007
Location: Location: Location: Location:

Postby durain » Wed, 23 Jul 2008 5:47 am

it's a gamble in your situation with the exchange thing. i just ride with the exchange. i exchange more if the rates are better and vice versa. you win some, you lose some.

i still dont get how your company work out your tax. either way, tax is singapore is low, UK is high and norway is super high!

ayrej2
Newbie
Newbie
Posts: 8
Joined: Tue, 01 Jul 2008
Location: London, UK

Postby ayrej2 » Wed, 23 Jul 2008 7:54 pm

durain wrote:i still dont get how your company work out your tax. either way, tax is singapore is low, UK is high and norway is super high!


well, they say it's to remove any incentive for staff to favour certain work locations as we work all across the world (as in everyone wanting to go to Sing & not getting anyone to go to Norway).

In reality, I'm sure its the most tax/cost efficient method for the company. As an example, say I earned 100k GBP, in the uk that's what they'd pay me and out of that, I pay 40k in tax.

Abroad they'd pay me 60k GBP (-40% UK tax) and pay my tax for Sing (15% = 15k GBP) and so I only cost them 75k, however I would still see the same take home pay. What's the incentive then? Well, they do pay me an uplift, accomodation allowance, transport allowance, my uk NI etc so my overall take home goes up. However, there isn't any tax benefit for me.

When I worked in Azerbaijan, my emplyoment company was registered in the US and my bank payroll was Jersey. Still the same deal though.

Saint wrote: So what do you want the answer to then?!


well, if I pick the gauranteed rate, the exchange rate continues to fall., and If I don't, that it goes back to where it was 1 year ago :lol:

Seriously, I know there is no correct answer to this. However, some people I have spoken to have a general belief that the Sing dollar will continue to fall for a little while. I was wondering if this belief was widespread?

go on, what would you do? pick one! :wink:

User avatar
banana
Reporter
Reporter
Posts: 961
Joined: Tue, 24 May 2005

Postby banana » Wed, 23 Jul 2008 8:21 pm

Pick the guaranteed rate. Life is too short to be spending that much attention on a few percentage points.
some signatures are more equal than others

User avatar
Wind In My Hair
Manager
Manager
Posts: 2306
Joined: Tue, 19 Jul 2005

Postby Wind In My Hair » Wed, 23 Jul 2008 8:41 pm

I do have a crystal ball. It tells me you don't like losing. So pick the guarantee if you're happy to work for a salary at the 2.8 exchange rate offered. In the best case, you won't lose by getting a lower salary than you agreed to work for. In the worst case, you would have missed out on a bonus that was never promised you in the first place and that wasn't necessary for you to decide to work here. Complicated, but simple.

Personally I would let it float. Life has no guarantees and that's part of the fun. But I am not you. I'm happy that my income fluctuates every month. It keeps me on my toes, but not everyone likes it. So it really depends if you're the kind who prefers stability or surprises.

User avatar
ksl
Governor
Governor
Posts: 6005
Joined: Mon, 19 Jul 2004
Location: Singapore
Contact:

Postby ksl » Wed, 23 Jul 2008 9:23 pm

I was under the impression, that foreign Companies, that set up office in Singapore, actually reap many tax benefits on income earned outside of the Country. the 183 day rule applies in your case, for residential and tax purposes. Personally I don't see how they can pay 15% singapore tax, when you are resident in another Country, you will still be liable, and not the Company if in the UK longer than 183 days.

You need to be careful your company isn't trying to pull a fast one, because ignorance is not bliss, if you are living and working in other Countries.

I disc Jockey I knew worked in Greece, while the night club said they would pay all his income tax, after his season stint. They payed nothing and the DJ was on the red carpet in UK, when he returned, he had to pay UK tax on his income earned overseas, because he hadn't been out of the Country long enough. So it turned out the night club screwed him, taking so called tax, when they shouldn't have done. So much confusion.

There is also the benefit of when you do leave the UK, you qualify for a tax rebate, depending on your planned departure, unless that rule has already changed. I would get advice from an international accountant, who should know the ins and outs for employees, Just ask your Company which accountants they use, they probably have the best anyway, may even have their own!
Last edited by ksl on Wed, 23 Jul 2008 9:34 pm, edited 1 time in total.

User avatar
Saint
Director
Director
Posts: 3535
Joined: Thu, 16 Jun 2005
Location: The Juban Stand, Boat Quay
Contact:

Postby Saint » Wed, 23 Jul 2008 9:32 pm

This might sound a silly question and there's probably a very simple answer, but....

If you get paid in the UK, pay tax etc, you wont actually be earning a salary in Singapore. So how are you going to be able to legally work in Singapore? No salary, no EP?

I await young SMS or SE to come up with the obviously simple answer :? :D


  • Similar Topics
    Replies
    Views
    Last post

Return to “General Discussions”

Who is online

Users browsing this forum: No registered users and 8 guests

cron