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Australian working in Singapore - Income Tax issues

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Nath21
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Postby Nath21 » Tue, 15 Feb 2011 11:55 am

Sorry MS dont get your question on putting in trust account. What are you referring to?

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Postby Mad Scientist » Tue, 15 Feb 2011 3:32 pm

Nath21 wrote:Sorry MS dont get your question on putting in trust account. What are you referring to?


I hold OZ citizenship but I have not been living there for sometime. My daughter is studying in Melbourne. All my assets in OZ are placed under family trust account . We did not claim any rebates whatsoever. During the early days we can ring fence on the Capital Gain Tax. Not sure now.

So what if I do it this way. Am I still OK under ATO ?
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Postby Nath21 » Tue, 15 Feb 2011 3:45 pm

Your getting out of my comfort zone but I will take stab - As far as I understand a trusts tax residence is very much bound up with the residence of the people who formed the trust or administer it. For tax purposes a trust is categorised as either a resident trust or a non-resident trust.

I found this:

Resident Trust
A trust formed will be an Australian resident trust where at any time during the income year (1 July to 30 June) a trustee is an Australian resident or alternatively where the trust is managed and controlled in Australia.

Non-Resident Trust
This is a trust where no trustee is resident in Australia at any time during the income year and the management and control of the trust is also outside Australia throughout the income year. Non-resident trusts can only be taxed in Australia on income derived from sources in Australia.
Capital Gains Tax ("CGT")
Australia taxes capital gains arising from certain assets. Upon becoming an Australian tax resident, each CGT asset will be deemed to have a value equal to its market value when its owner becomes an Australian tax resident. When the asset is sold, CGT is payable on the difference between the sale proceeds and the asset's market value when its owner became an Australian tax resident.

Based on the limited information I have presumed that your daughetr is over 18 and that the rest of your family are non-tax residents. If the trust was formed before you left you should have capital gain (deemed disposal of assets) when all the trust members went non-resident so does the trust, hence treated the same as individual. Cpaital gain on deemed disposal should be in the trust and loss can offset this but youy obviously havent made a distributon? so paying high rate of tax in the trust as usually undistrubuted income tax at highest rate.

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Postby Mad Scientist » Tue, 15 Feb 2011 5:29 pm

Nath21 wrote:Based on the limited information I have presumed that your daughetr is over 18 and that the rest of your family are non-tax residents. If the trust was formed before you left you should have capital gain (deemed disposal of assets) when all the trust members went non-resident so does the trust, hence treated the same as individual. Cpaital gain on deemed disposal should be in the trust and loss can offset this but youy obviously havent made a distributon? so paying high rate of tax in the trust as usually undistrubuted income tax at highest rate.


Thanks for that but you make me more confused now.
Yes my daughter she is 23 now. All of us are Non Tax Resident except my daughter as she is in the Uni in Melbourne.
But I set up the Family Trust with a Trust Fund trailing behind. I was advised b4 that the proceed of rents on our homes should go to Trust Fund to reduce the tax incurred.It also protect you on discretionary tax..
Unlike NZ where they have LAQC; Loss Attributing Qualifying Company where basically you do not need to pay CGT upon sale proceed done.
Am I right on this ?
Although we are not residing there but there are income earned from rents and others they were channelled to the trust fund.
I do agree on your thoughts about changing the tax to non resident including the bank but what you said will make my trust fund stick like a sore thumb. I thought by doing this you are considered NON RESIDENT.
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Nath21
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Postby Nath21 » Tue, 15 Feb 2011 8:14 pm

If you set up the trust fund as a resident and transferred assets into then you become non-resident your trust should just mimic your status. Trust doesent by itself mean you have intention to return to aus and your time away is significant however you would have deemed disposal of assets for cgt in the trust to which you could offset future tax losses from rental income etc. If you had bank accounts you still should have to tell the bank to take withholding tax from shares dividends and interest as the trust is non-resident. There really is no reason for family trust other than protection of assets for personal liability and to distribute income to different people and reduce overall tax.

But for tax residency sounds like zero impact. If you didnt do the cgt deemed disposal you might get back tax for that if you get audited but I think they would treat you as non-resident.

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Postby Mad Scientist » Wed, 16 Feb 2011 1:17 am

thanks mate, you have assured me what I had done was right

So I am OK until such time I return to Ozzie and sell my assets
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Postby ushers » Fri, 25 Feb 2011 6:04 pm

To the original poster.

We are in the same boat as you although we are kiwis moving from Aust to Singapore in 2 weeks.

I also practice in tax law and can tell you that as long as you cut links with Australia (see a useful post above) and are working overseas fror a non-Aust entity then you won't get caught by the new section 23AG.

Make sure that you meet the singaporean 183 day rule for this calender year to avail yourself of the lower sing tax.

As for the house, as long as you do not buy another principal place of residence then you can run it as a loss and carry those losses forward to offset against income when you come back. Also, the ATO allows up to 5- years for you to live overseas (not buy overseas) and rent out your house and, if you sell your house, then there will be no CGT for the period that you are away - how good is that!.

Hope that helps

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1 year contract?

Postby dumadiscount » Mon, 28 Feb 2011 3:43 pm

Hi, I have been offered a 1 year contract (in house lawyer) in singapore and wondering what is the likely scenario for me taxation wise?

I own a PPR here which I would rent out while I'm gone and not married.

Am I correct in assuming with a contract for only 12 months I am likely to be seen as a Australian resident and will be taxed at Australian rates?

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Postby Nath21 » Tue, 01 Mar 2011 4:43 pm

Its not clear cut but on the balance of things most likely no. Depending on your timing of entry and exit you may not even be treated as a tax resident of singapore but that will only impact the amount of tax credit and top up tax you pay in australia.

Especially no if your working for the same company and you have a job back in OZ at the end of the 1 year. That would show intention to live in Oz.

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Postby dumadiscount » Wed, 02 Mar 2011 8:29 am

Hi Nath,

Thanks for your advice!

Any possibility if the contract was a 12 month contract with automatic renewals and therefore 'indefinite' that would help my cause to being a non-resident?

I note it is a different company (would resign from previous co).

The aussie tax is a big hindrance to accepting the role at the moment.

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Postby atago » Wed, 11 May 2011 6:52 am

I have a similar situation but a bit more complicated. I have recently returned from hkg after being there for just over 2 years. I have been back in oz 4 about 4 months. I was a non resident in hkg for oz tax purposes.
Sydney life is very slow so I have applied for a job in Singapore and now have a job offer.

I am worried I will attract the attention of the ato, especially if the Singapore job doesn't work out. Should I accept the Singapore job? Anyone had a similar experience?

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help required as well

Postby misonca » Sun, 15 Apr 2012 11:45 am

I also have a scenario related to this topic

I am an australian and still remain an australian resident.

I moved to singapore in sept 2011 and have been working here since. Im thinking of cutting my trip early and thinking of coming back to aust in oct this year.

Now lets just say i come home in oct ,made 50k sgd and already paid 2k in sg tax for the year.

When i return to aust, what will i be taxed for? Will i be taxed at the aust tax rate for the full 50k?

Thanks in advance for anyones help

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Postby MattBell » Sat, 21 Apr 2012 12:04 pm

yeh I'm in a simlar situation - I had live/worked in Singapore for almost 2years but when I got back (to Australia) I was liable for tax at the Aus rate for income earned in Singapore. It was an open ended contract that I chose to terminate - but aparently lots of small things like still having a bank account and shares and loans made me a tax-resident.

This is a tricky one to get my head around because it's the difference of having to price yourself ~35% more expensive as an option to employers!

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Postby sundaymorningstaple » Sat, 21 Apr 2012 1:00 pm

Welcome to the realm of US taxpayers who are ALWAYS taxed on their world wide income. In fact, it is even difficult to renounce your US citizenship if your are a born US citizen as the gahmen tend to see it as nothing more than a tax dodge. At least, if you follow the numbers, you do get some relief.


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