Tax & Property Investment - Sydney to Singapore

[Sydney]

Hi guys,

I have 2 investment properties in Australia and have been presented with the opportunity to work in Singapore for the next 5 years. I was wondering what are the taxation ramifications of my relocation?

I understand that Singapore has a taxation treaty with Australia - so does this mean that I can avoid double taxation on my property income?

Also, where will this property income be taxed - in Singapore or Australia? Do I have a choice of which regime I can be taxed under and am I still able to negative gear this investment?

Please help, as I am required to make a decision about whether to accept the opportunity in 2 weeks time.

Many thanks!

[swing]

Hi Sydney,

With regards to your tax queries, do check out this web site: http://www.iras.gov.sg/tax%20treaties/d ... liaDTA.htm

As for your banking query, the local banks usually charge a minimum of $20 for the telegraphic transfer charges and an additional commission for buying the foreign currency. You may therefore wish to consider sending your money back over every few months instead of on a monthly basis. There could be other alternatives but that's all I know.

Hope this helps.

Ciao.

[Sydney]

Hi Swing,

Thank you. I appreciate the direction and it does help alot.

For other people's benefit, the link to the Singapore-Australia Double Taxation Agreement effectively states that:

1. Double taxation on property income is indeed avoidable.
2. The property income will be taxed in the country in which it is located (in my case under the Australian tax regime).
3. Choice is not available when it comes to the question of which tax regime the property income will be taxed under.
4. Negative gearing is still possible but in my case is irrelevant since I do not have any other Australian income to offset the deductions against.

I'm still chasing up the banking options but at this stage, it doesn't look too promising. None of the so-called "global" banking institutions I've approached in Sydney actually cater for the international financing services I'm looking for.

But I'lll keep trying and see if there is any better way to service a mortgage in one country while working in another. There should be, given how internationalised the workforce has become these days. Very surprising.

Cheers, Sydney

[pevans]

My wife's company have set us up with a Singapore tax agent all ready plus we are meeting an Australian one soon.

From what i can gather so far, and in answer to some of your questions

1. You continue on with negatively gearing your properties in Aus, but ofcourse with you only earning an income at home from your rental returns you won't have anything to gain a return from. However these claims then turn into tax credits which you can start claiming when you return to Aus. Effectivley depending on how long you are away you might have your first year or two back in aus tax free..

2. Another point that i have yet to get clarification on is that you capital gains on any shares or investment houses are calculated on the day you leave the country. So from that day on any growth in your share portfolio or property portfolio is capital gains free....

[Sydney]

Pevans,

Thanks. That's really useful information! I'll definitely follow up the points you made.

With relation to point 1 (negatively gearing claims turning into tax credits), I'd be interested in how long you can keep these tax credits for. I assume it will be limited by time - perhaps 5 years? If I find a definitive answer or if anyone else finds out, please post it here.

On point 2 (growth in your share/property portfolio being capital gains free once you leave), I guess that will require you to request a judgement from the Australian Tax Office as to the worth of your property at the time of departure. I'll investigate further and post any information I find.

Cheers, Sydney

[Sydney]

Just an update on one of the issues I raised above:

1. Tax losses can indeed be carried forward indefinitely.

See http://www.ato.gov.au/individuals/conte ... /19903.htm

Cheers, Sydney

[Peteman]

I am in a similar situation - several negatively geared properties in Sydny which leave me in a tax-negative situation in Australia. What happens when I work (for my Australian company) in Singapore, but still paid through Australia ? are there limits under which Singapore tax would not be payable ?

[SYDNEY2]

Are you able to claim the losses on your properties from the Sing tax department?

[Sydney 3]

The answer for Sydney2 is NO you can't claim the losses on your properties from the Sing tax department, as those income from your australian properties are not of part of your singapore income.

Sydney, have you managed to find out how to calculated the capital gains from the day you leave to get capital gains tax examption ? I have three investment properties and I have been working in singapore over a year now.

[pencilcase]

Hi guys and girls,

I am kinda new at this but i want to find out if this forum can be used to help discuss topics such as singaporeans looking to buy property in australia. as you know, many of them have children studying overseas.

i was wondering if there are any forums dedicated or specialize in that area of topic?

[sierra2469alpha]

Pencilcase - the best bet would be to post in General Discussions. The moderators may then suggest it be moved depending on which way the thread goes.

There certainly are a number of both Singaporean and Australian companies promoting residential property in AUS at the moment.

One word of caution - be VERY aware of what the exchange rate hedging mechanism (if any) is.

Hth, Mr. P