Take care of your dollars and cents

CHRIS POTTER from Chartwell Associates explains why you need to think a tax year ahead when it comes to getting your finances in order.

What’s the general tax advice on Singaporeearned income?

Most authorities will tax “events” such as income and capital gains in the tax year in which they occur. If you return to your home country after making substantial capital gains in Singapore – which, in Singapore, would be free of capital gains tax (CGT) – and you become tax resident in your home country, those gains may be subject to CGT there. If a gain was made in the tax year before your return, then you’d be in the clear.

What should I do with the savings I have in managed funds in Singapore? Do I need to pay tax on them before I leave?

Singapore doesn’t have capital gains tax, so you shouldn’t have to pay tax on any savings or investments. Whether you should cash these in and take them with you will really depend on where you’re moving to. It may be better for these assets to remain in Singapore. The best thing is to take advice from someone who is familiar with the tax regime you’re going to.

Who do I need to tell in Singapore that I’m leaving?

The two main things to do are: terminate your Employment Pass ( EP) and pay your outstanding tax bill. If you are employed, then your employer will cancel your EP and give you a white temporary visit pass, which you will surrender when you leave Singapore. Your employer will also give you an Inland Revenue Authority of Singapore (IRAS) form – an IR21 – that you must file with the IRAS for tax clearance.

Should I liquidate all Singapore assets before leaving, so as to avoid paying tax in my home country, or should I sell at a later date?

This will also depend to a great degree on the tax regime you’re moving to, and how the investments have performed. If they’re showing a loss, you may not want to crystallise that loss. Again, take advice from someone familiar with the tax regime that you’re going to.