Given the current uncertainty in the world, many Australians living in Singapore may be considering a return to Australia.
For most Australians working in Singapore, a good income coupled with low-income tax usually means that a decent amount of savings will be sitting in the bank at the end of their stint. Whilst tax is low in Singapore, it is certainly not the case in Australia.
Australian’s returning home with significant assets and wealth accumulated while in Singapore, will find the Australian taxation system will hit hard unless they make a plan!
Our Singapore E-team member, CST Tax Advisors will be participating in a webinar with St. James’s Place Wealth Management this Friday to discuss some of the important things you need to plan for while in Singapore to avoid getting bitten by the ATO when returning home to Australia.
Details of the webinar:
Date: Friday 12th June
Time: 1:00 – 1:45pm (Singapore local time)
Please click here to register for the webinar.
In response to the growing concern over the Coronavirus pandemic, the US government has announced a deadline extension for filing federal income tax returns and tax payments. The deadline has been extended from April 15, 2020, to July 15, 2020. All US taxpayers—including individuals, trusts and estates, corporations and other non-corporate tax filers as well as those who pay self-employment income tax—can defer payments until July 15, 2020.
You don’t need to file for an extension or call the IRS to qualify for the extended deadline. The relief is automatically provided to all taxpayers.
As a US expat, you normally receive an automatic extension until June 15, hence, this year you have one additional month until the deadline and all your taxes are extended without interest or penalties. In case you require extra time beyond June 15 to file your taxes, you are eligible to extend your tax return due date until October 15 by submitting IRS Form 4868.
You are eligible for an additional two-month extension, which is specially designed for US expats. This extension is until December 15; however, it is a discretionary extension and not automatically granted. Thus, it is best not to rely on this and only use as a last resort in case you face unexpected circumstances.
Meanwhile, you can stay ahead of updates and follow the IRS coronavirus page where information about the taken measures helping Americans affected by the outbreak is published.
The Chancellor of the Exchequer will unveil the new Government’s first budget on 11th March 2020.
Our London E-Team Co-Group Leader, James Cowper Kreston, are hosting 2 seminars and a webinar at which they will cover the main changes that have been announced and how these will impact you and your business.
During the events particular attention will be given to any changes in:
- Tax efficient profit extraction
- R&D tax relief
- Capital allowances
- Tax planning opportunities
- VAT & Customs Duty
- Tax allowances
- Inheritance tax
- Capital gains tax
Date: Thursday 12 March 2020
Locations and time:
Newbury Racecourse, Newbury, 8.00am -10.30am (local time)
Solent Conference Centre, Southampton, 12.15pm -2.30pm (local time)
Webinar, your desk, 1.00pm -1.45pm (local time)
Please email Lizzie Uzzell stating which event you would like to attend.
Please click here to register for the webinar.
The proposed removal of the main residence exemption on capital gains tax (CGT) for non-residents was met with criticism when it was first introduced in 2017. Although the Bill lapsed, a recent reworking was brought back on October 23rd, 2019.
So, what’s new? More importantly, what does this mean for Australian expats who still own a former main residence?
Changes with the main residence exemption for non-residents
As a revisal of the original Bill, this new proposed measure delays the inevitable loss of the CGT exemption. Two primary changes have been introduced. The first is simply an extension of the transitional concessions.
This concession applies for expats who owned a primary residence on May 9th, 2017. Existing Australian expats now have until June 30th,2020, to sell their main residence under the existing rules. (Previously they had until June 30th, 2019).
The new Bill also introduced some exceptions whereby a non-resident may be able to access the main residence exemption. These exceptions apply in the event of death, terminal medical conditions, or divorce. However, these events must occur within 6 years of becoming a non-resident. This ensures that the 6-year absence rule can still be accessed by expats who face such unexpected life events.
Retrospective application means there will be no expat CGT main residence exemption for any foreign resident.
It’s not all that often that major tax changes are applied retroactively. In this case, it does. Anyone who purchased their primary residence before a hint of these changes existed will still be caught by them.
Were you a foreign resident with a main residence property held on May 9th, 2017? The main residence exemption will only apply for non-residents if you sell prior to June 30th, 2020. Of course, you still need to meet the usual requirements for main residence CGT exemptions. If you wait, then you’ll miss out. You won’t even be able to apply for a partial main residence exemption.
No relief for long-term main residence
Imagine this scenario.
You purchase and live in a home from 1989 through to 2019. You’re then given the opportunity of a lifetime and make a permanent move overseas. You put your home up for sale immediately. However, by the time your property sells, you are a non-resident for Australian tax purposes. This means you are hit with a CGT bill on the capital gain. It doesn’t matter how long you previously lived in the property. You don’t qualify for any exemption. On top of this, you’re missing out on potential capital gains reductions. That’s because you didn’t think it was necessary to keep the relevant records for the 20 years that you lived in the property.
Anyone who purchased their main residence after May 9th, 2017 will be caught under the new laws when they sell as a non-resident. Whether they sell now or next year, they will be subject to the full CGT.
Time To Act
While the Bill hasn’t passed into law yet, it is important to strategise. Be prepared for what it may mean for your situation and plans so that you have your contingencies ready and, if necessary, put any immediate plans into action. While CST Tax Advisors and other accounting bodies will continue to address the concerns with this measure, it’s important that you understand how these measures could impact you.
Contact CST Tax Advisors to discuss your current situation and assess your options.
Our Paris Group Leader, Bruno Hicke of BH & Associés, recently provided much needed advice to a This is Money UK reader.
The reader’s elderly mother was having difficulty closing a French bank account and was being charged fees as a consequence of the delay.
Read Bruno’s advice on the This is Money website.
With the Coalition’s victory in May 2019 Federal elections, the immigration system is expected to continue the past six years trends. Prior to the election, Prime Minister Scott Morrison announced a cap of 160,000 migrants per year for the next 3 years.
Out of this number 30% will be allocated to the Family migration while the remaining 70% will be dedicated to the Skilled migration stream.
Out of the latter category, 39,000 visas in 2019-20 will be allocated to Employer Sponsored skilled visas, which shows an increase of almost 3, 500 places. However, the Government introduced stricter labour market testing, so that skilled migration is only used where an Australian worker is not available and stronger English language, age and work experience requirements are required.
Introduction of two new regional visa categories
Within the Employer Sponsored skilled visa scheme, a particular focus will be on the regional areas. The Government will introduce two new regional visa categories (Subclass 491 Skilled Work Regional (Provisional) visa and Subclass 494 Skilled Employer Sponsored) in November 2019.
Under these two schemes, skilled migrants will be priority processed and afforded access to a larger pool of jobs on the eligible occupation lists compared to those who live in the major cities. Also, skilled migrants will have a pathway to permanent residence under the Subclass 191 Permanent Residence (Skilled Regional).
Skilled Work Regional Scheme
This regional scheme will be reinforced by the Designated Area Migration Agreements (DAMA), which target specific skilled migrants to work in the regional areas of need.
With the DAMAs, the Federal government this year is aiming to provide more attractive incentives to the new settlers in Australia to avoid the big cities and settle in the areas that are not so populated and still requires the new migrants’ skills and expertise.
For this purpose, they have allocated a number of places, to encourage the new migrants to settle in the Northern Territory, the Great South Coast of Victoria, the Orana region in New South Wales, South Australia and Kalgoorlie-Boulder in the Western Australia’s Goldfields.
What this means for you as an expat moving to Australia
Expats seeking to move to Australia now have a greater opportunity to apply for a visa under the two new regional visa categories as there is a larger pool of jobs on the eligible occupation lists .In addition, their visas will be processed more quicker than other applicants as they are afforded priority processing. Expats in Australia who hold these visas will also have a pathway to permanent residence under the Subclass 191 Permanent Residence (Skilled Regional) Visa.
The team at Migration World are ready to and can assist you with all your questions and enquiries regarding the granting of a visa to enter and live in Australia
As an expat moving to New Zealand arranging your banking is important for a number of reasons
You need a bank account to work
If you are moving to NZ to work, you are required by law to have an Inland Revenue Department (IRD) number. Without an IRD number your employer will deduct tax from your earnings at the highest tax rate.
The issuing of an IRD number in NZ is best facilitated online when you have provided Inland Revenue with proof of a fully functioning local bank account. This may be done by providing them with a copy of your local bank statement, showing proof of deposits and withdrawals from the account.
In addition, a local bank account is required in almost all cases to be paid your salary and earnings by your New Zealand employer.
It is therefore important to open a New Zealand Bank account promptly when moving to New Zealand.
Opening a bank account outside of New Zealand
The good news is you are able to open a bank account before you actually move to New Zealand.
Bank of New Zealand (BNZ) allows you to open a bank account up to 12 months prior to your arrival into NZ, thus alleviating any delay in the process.
The procedure for opening an account is straightforward involving a simple online application with no fees or deposit required.
You simply submit an application at www.bnz.co.nz/movingtonz. Shortly afterwards, BNZ will provide you with notification that your application has been submitted and what steps you need to take next. All correspondence with the BNZ prior to your arrival is by email with the BNZ Migrant Banking Department.
Such emails will contain your account details, information on how to transfer funds into the account and what further steps you may need to take. You will need to inform the Bank of such details as your arrival date, visa category and your current tax identification number (such your National Insurance Number if you are from the UK or your Social Security Number if you are from the US).
Be aware of the conditions
While an account can be opened up to 12 months prior to arrival, you can only withdraw funds after your arrival into New Zealand provided you have attended the initial “activation” meeting with the Bank. At this meeting your bank account is activated for all operational purposes.
At the initial activation meeting, you are required to provide the bank with your passport (for identification purposes) and other documents which prove your home country address, such as your home country bank statements or utility accounts.
Joint accounts can be applied for but can only be activated if both you and the co-applicant attend the initial activation meeting after arrival into NZ.
When moving to NZ, particularly for work, you should act promptly in establishing a NZ bank account so as to facilitate the obtaining of an IRD number and payment of your salary and wages.
BNZ makes this process easy for you by enabling you to open a bank account before you move – just complete an application form at www.bnz.co.nz/movingtonz.
Any enquiries or questions in relation to setting up an account whilst overseas can be emailed to firstname.lastname@example.org and a reply will be made promptly.
Members of our Singapore E-Team took part in HWA’s annual Wheel Walk or Jog and Family Carnival.
Held on 27th April at the Esplanade Park, the event includes a family carnival followed by a walk or jog with HWA wheelchair-bound members along a scenic route not more than 3.5km.
Volunteers are paired with HWA wheelchair-bound members and assist them throughout the day.
A big thank you to all the E-Team volunteers. A great day was had by all.
The foreign exchange market is a global decentralized market also known as an over-the-counter market where bank dealers make the market to determine the interbank exchange rate, i.e. the rate the banks use when trading with one another.
The interbank rate is the mid-point between the buy and sell rate for a currency on the open market and is the most accurate rate of exchange at any given time. You can easily check this at any time using the XE Currency Converter.
Unfortunately for most of us, this rate is reserved solely for banks and large financial institutions trading in large amounts of foreign currency.
For retail or business banking customers looking to make smaller international money transfers, a margin (or spread) will be applied to the interbank rate to ensure a profit for the service making the transfer. As a retail banking customer, this margin may be anywhere between ~4-5% of the interbank rate.
The graph below illustrates the rate that a customer may expect to receive from the bank when converting their AUD or NZD to GBP.
What determines whether I receive a competitive rate?
Naturally, when sending money abroad, it’s in your best interests to ensure you keep as much of your money as possible by locking in a favorable rate of exchange.
The exchange rate you receive will be based on a number of factors, including:
- Volume – the amount you are converting
- Currencies exchanged
- Knowledge and awareness
- Frequency of transactions – ongoing or one-off
However, one of the most sure-fire ways to ensure you are receiving a competitive rate is to look at using a money transfer specialist like XE who provides a much sharper rate of exchange than you would otherwise receive from the banks.
Why you should look beyond your bank
XE works closely with our broad network of referring partners to provide their clients with a competitive, secure money transfer solution.
As such, when you choose XE Money Transfer via one of our partners, you will receive preferential rates of exchange that are more competitive than you would receive from other providers.
…It’s not just about the rate
At XE, we pride ourselves on delivering our clients value beyond a great rate, providing a much more comprehensive service than they could expect to receive from the banks.
Exchange rates fluctuate at any given minute and as such our expert team is on hand to be your eyes and ears in the market and advise on how to ensure you lock in the best rate possible.
We also offer a range of products typically not made available to retail banking clients, including Market Orders and Forward Contracts, that will help you reduce your exposure to currency risk.
Whatever your needs or situation, feel free to get in touch with the team at XE to discuss the best approach to your foreign currency needs.
There are many challenges with relocating, with some challenges rating higher on the stress scale than others. Once the logistics of the move are over and you are no longer stepping over boxes or searching for teaspoons, settling in is the next hurdle.
By settling we don’t just mean sorting out your new home, but how do you make your new environment ‘feel’ like home?
It can be daunting with family and friends no longer near at hand. The ‘euphoria’ of arriving safely with your belongings is quickly overtaken by the realization ‘that’s it, I’m here, what now?’
The settling in period can be quite different for those who have relocated for work and for those who have accompanied their partners. Your new work environment is your new routine and you tend to hit the ground running.
Many companies offer support and programs to assist with settling in. These are really worthwhile participating in, especially if language or cultural differences are a challenge with the new job.
Social or sports clubs attached to your company are a great way to meet people initially. Meeting up with people who have the same interests will broaden your social circle, while you slowly build your own network. If you have relocated overseas, seek out expat groups to join.
Expats have already done what you’re doing and can be a wealth of information and may even prevent you from making mistakes due to your inexperience. Remember this is not about trying to etch out a piece of home in a foreign land it’s about finding a support system to help, in what can be for some, a lonely settling in period.
Don’t neglect opportunities to form friendships within your local community too, it’s the best way to assimilate and feel part of your new environment. If on the other hand, you are relocating because of your spouse or partners job, it presents with its own kind of challenges.
You may not be able to work, due to visa restrictions, unrecognized qualifications or having young children. You may find yourself somewhat isolated, in the initial phase, while your partner’s days are full and busy with their new job.
You may be waiting for them to return home from work ready to hear all their news only to be met by an exhausted partner, whose day has been full of learning new systems, meeting new colleagues, navigating new roads or transport systems, and all in another language.
You, on the other hand, may not have spoken to another adult all day! It can put a strain on the relationship.
It’s important for both parties to see what challenges the other is facing. Good communication is key to understanding and acknowledging what the other is going through.
For it to be a success, both parties need to feel supported and listened to, while navigating their new life. It is not uncommon for a couple or family to return home because they were not prepared for the possible struggle of the early months.
It can be a painful learning curve to know that it needs to work for both, for it to work at all.