Aidan Bailey provides taxation tips for UK citizens who’ve chosen to make Singapore their home.
Get organised before leaving the UK If you’re renting out your UK property, submit a P85 form for the Non-Resident Landlord Scheme. Also, assess your income tax position for the full tax year of your departure – to ensure you claim any allowances you’re entitled to. If you arrive in Singapore midway through a tax year, you may still be able to recover some of the tax you’ve already paid.
UK tax allowances If you’re not a UK resident, are entitled to non-UK resident tax allowances but have continuing sources of UK income, ensure any fixed assets situated in the UK – such as property – are held in joint names with your spouse. Also, if you have movable assets in the UK – such as cash on deposit – it may be beneficial to transfer the funds offshore to the Channel Islands or Isle of Man, which sit comfortably outside the UK tax system but within the UK banking system. This will remove the bank interest from a charge to UK tax, whilst you remain a non-UK resident.
Maintain non-resident status Living abroad may not guarantee non-resident status, you also need to ensure you’re not maintaining a family in the UK or performing employment duties there. Keep an accurate record of your movements to and from the UK, spending no more than 91 “midnights” in the UK per tax year to maintain non-resident status.
Exporting UK pension rights You can now transfer rights in any UK occupational pension scheme or Personal Pension Plan to a Qualifying Recognised Overseas Pension Scheme without incurring a charge to your UK income tax.
Seek local advice While it’s important to achieve non-resident status and closely monitor your UK tax position, it’s also vital you look after your tax affairs in the country you move to. Before executing any UK tax efficient recommendations, ensure your local tax position won’t be jeopardised in the process. Always seek local support from a reputable local advisory, or speak to a global company that can support you wherever you are.
Plan your return Having successfully extricated yourself from the UK tax system as a non-resident, real care is needed if you ever decide to return. Any tax exposure needs to be planned carefully – particularly where substantial assets and shareholdings are concerned. Ensure your arrival is disclosed and documented accordingly and proper tax planning is taken so liabilities are minimised. With a little forward thought, this is possible.
Aidan Bailey BA (Hons) CertPFS AWPCM
General Manager Singapore, International Division