Author: Christian Iles

It is now more important than ever to carefully consider tax implications when disposing of Australian residential  property (real estate) as a foreign resident. Over the last 6 years Australia has introduced new capital gains tax rules for foreign residents.

In this article, we consider the potential tax consequences of selling Australian residential property as a resident of the UK. The article is split into two segments:

1. Australian tax implications, and

2. UK tax implications.

Please note, the article below is a brief summary of tax legislation in both the UK and Australia. If you are planning to dispose of Australian property as a foreign resident, it is recommended that you seek professional advice specific to your situation and not rely solely on this article.

Australian Capital Gains Tax Implications

In Australia there are two capital gain tax (CGT) reliefs commonly utilised when disposing of residential property.

The first is the ‘main residence exemption’. The main residence exemption means there will generally be no tax liability upon sale of your main residence. Where the dwelling was your main residence for only part of the ownership, the full exemption is proportioned according to the number of days it was not your main residence. Please note, the exemption will remain available where the main residence was vacated and not rented out (and no other main residence election was made).

However, since 30 June 2020 foreign residents who have sold property have no longer been able to benefit from the exemption, unless they have satisfied the requirements of the life events test, covered below.

In order to qualify for the ‘life events test’, both of the following must be true:

  • You were foreign resident for tax purposes for a continuous period of 6 years or less
  • During that period, one of the following occurred:

– you, your spouse or your child under 18 had a terminal medical condition
– your spouse or your child under 18 died
– the CGT event happened because of a formal agreement following the breakdown of your marriage or relationship.

The second frequently utilised capital gains tax relief in Australia is the capital gains tax discount. When you sell or disposes of an asset, you can usually reduce the capital gain by 50% if you owned the asset for at least 12 months.

As with the main residence exemption however, the capital gains discount has now been removed for foreign residents who acquired assets after 8 May 2012.

Where foreign residents either acquired the asset on or before 8 May 2012 or had a period of Australian residency after 8 May 2012, they may apply the discount to part of their capital gain. The discount is then calculated using the ATO worksheet, attached here.

Upon disposing of Australian property and once the capital gains tax calculation has been finalised, foreign residents are liable to tax on their capital gain at a rate of 32.5%.

UK Capital Gains Tax Implications

As a resident of the UK you are normally liable to UK tax on your worldwide income and gains arising in the tax year, this is known as the arising basis of taxation. Therefore, your Australian residential property gain will normally be taxable in the UK.

Until 05 April 2023 the UK capital gains tax allowance is £12,300. However, from 6 April 2023 this is reduced to £6,000 and then again to £3,000 from 6 April 2024. Any taxable gain over the relevant allowance will be liable to residential capital gains tax rates, currently standing at 18% and 28% (depending on the size of the gain and marginal rate of income). Unlike the new rulings for foreign residents in Australia, the proportion of the gain which relates to the period of time where the property was your main residence will be exempt from the UK taxation. This is known as principal private residence relief (PPR relief).

However, where you are resident but non-domiciled in the UK, you can elect to be taxed in the UK on your UK income and gains alone, and pay UK tax on foreign income and gains only if these are remitted (brought) to the UK. This is known as the remittance basis of taxation. Electing to use the remittance basis however, means the loss of your tax-free personal allowances and capital gains tax exempt amount for the year the election is made. In many scenarios, the individual is selling the Australian property in order to purchase property in the UK. In this instance the capital gain would be remitted to the UK and thus UK capital gains tax would apply. Therefore, if you are entitled to use the remittance basis, it is important to calculate the most tax efficient method of taxation.

Where you are taxed on an arising basis (worldwide income) and you’ve paid tax in Australia on your Australian property gain, you may be entitled to a UK foreign tax credit.

Where a ‘UK resident’ has property gain from Australia, the Australia-UK double tax treaty in principle becomes relevant. However, it generally has no impact on the application of domestic law in Australia or the UK.

Contact Us

As evident above, ongoing changes to the rules for foreign residents selling Australian property means it is now crucial to understand the tax implications of disposing Australian property, particularly whilst resident of the UK.

If you require any advice or assistance with UK or Australian capital gains tax, we are here to help. Simply send us an email at the address below or fill in our contact form to arrange a free initial consultation.

For enquiries please contact:
Ned Shelton
Director
Sheltons Accountants
N.Shelton@SheltonsGroup.com

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Are you moving to the UK and renting out your property in Australia?

Below we have covered some popular Australian and UK tax issues and questions that arise when becoming a non-resident landlord of Australia.

Will I be taxed on my Australian rental income in Australia?

Non-residents of Australia are generally taxed on income derived directly or indirectly from sources in Australia (subject to the interaction of a double tax agreement). As a result of this, when you are tax resident of the UK you can be subject to Australian tax on rental income derived from an Australian source.

Gross rental income will be included as assessable income in your Australian tax return. You will then be entitled to a deduction for tax-deductible expenses incurred from renting out your Australian property. Where your deductions exceed the rental income, that loss may be offset against your other taxable Australian sourced income, or carried forward to the following tax year. Where you have generated a profit, you will be subject to tax at 32.5 percent on the first $120,000 (AUD) of net income, and then rates ranging from 37 percent to 45 percent for the remaining income.

Will I be taxed on my Australian rental income in the UK?

As a resident of the UK you are normally liable to UK tax on your worldwide income and gains arising in the tax year. Therefore, your Australian rental income will normally be taxable in the UK.

However, where you are resident but non-domiciled in the UK, you can elect to be taxed in the UK on your UK income and gains alone, and pay UK tax on foreign income and gains only if these are remitted (brought) to the UK. This is known as the remittance basis of taxation. Electing to use the remittance basis however, means the loss of your tax-free personal allowances and capital gains tax exempt amount for the year the election is made. Therefore, if you are entitled to use the remittance basis, it is important to calculate the most tax efficient method of taxation.

Where you are taxed on an arising basis (worldwide income) and you’ve paid tax in Australia on your Australian property income, you may be entitled to a UK foreign tax credit.

Where a ‘UK resident’ has property income from Australia, the Australia-UK double tax treaty becomes relevant.

What expenses can I claim on my Australian property income in the UK?

If this is your first experience of being a landlord whilst resident of the UK, you may be unsure about what expenses are tax deductible. HMRC (UK equivalent to the ATO) provide that for an expense to be allowable for tax purposes, it should be incurred wholly and exclusively as a result of renting out your property. Typical expenses include building insurance, estate agent fees and utility bills (only if not reimbursed by tenants).

In some instances, what you assume are revenue expenses may in fact be ‘capital expenses’. For example, improving or upgrading something that was existing. Capital expenses are not allowable and cannot be claimed against rental income, however you might be able to set them against capital gains tax if you sell the property in the future. You should seek professional advice if you’re unsure on the tax treatment of your property expenses.

Unlike in Australia where mortgage interest is fully tax-deductible, since April 2020, you have no longer been able to deduct any mortgage expenses from taxable rental income whilst resident in the UK. Instead, mortgage interest is used as a tax reducer, where you receive a tax credit based on 20 percent of mortgage interest payments. For example, if you make mortgage interest payments of £5,000 per year, you will receive a tax credit of £1,000 to deduct from the liability incurred on your property income.

Will I receive my Australian personal allowance as resident of the UK?

If you are a non-resident for the full Australian income year (01 July to 30 June), you can’t claim the tax-free threshold. This means you pay tax on every dollar of taxable income you earn from Australia.

If however, you are an Australian resident for tax purposes during the income year, you will receive a part-year tax-free threshold. This may be relevant in your year of exit from Australia.

How do I file my UK self-assessment tax return?

As resident of the UK, when you are in receipt of overseas income it automatically places you into the UK self-assessment regime. The return will be used to calculate any UK tax liability arising from your Australian property income and any additional relevant income.

The tax return deadline in the UK is 31 January following the tax year end (31 October for paper returns). Automatic late filing penalties will apply after the deadlines have passed.

Ways in which you can file a UK tax return:

  • Send your tax return by post
  • Use commercial software
  • Use HMRC online services
  • Get help from a professional

How do I file my Australian tax return?

As non-resident of Australia, the due date for your tax return remains 31 October following the end of the tax year. Non-residents may obtain an extension to 15 May of the following year if they are registered with a tax agent, i.e. tax-year end 30 June 2022 would be due 15 May 2023.

Ways in which you can file an Australian tax return whilst overseas:

  • Lodge your tax return online with MyTax
  • Lodge your return by post
  • Lodge your tax return with a registered tax agent

Contact Us

If you need advice or assistance with your UK or Australian tax obligations, we are here to help. Simply send us an email to arrange a free initial consultation.

For enquiries please contact:
Ned Shelton
Director
Sheltons Accountants
N.Shelton@SheltonsGroup.com

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If you’re a British Citizen in Singapore, you may still be required to file a UK tax return as well as a Singapore tax return, even if you’re considered non-resident in the UK for tax purposes.

Filing UK taxes from Singapore can be confusing. In this blog, our Tax Manager, Christian Iles, answers the most common questions we’re asked when British citizens move to Singapore.

This blog is not just relevant to British citizens, but also individuals who may have lived in the UK or simply have tax compliance obligations in the UK.

In what circumstances will I need to file a UK tax return whilst a resident in Singapore?

There are several reasons why a non-resident of the UK is required to file a UK tax return. These include, but are not limited to:

  • an individual who is in receipt of UK property income
  • an individual who is in receipt of taxable UK dividend income
  • company directors of a UK company who receives remuneration for their duties
  • an individual who sells property or other assets liable to UK capital gains tax

Will I receive my UK personal allowance as a resident in Singapore?

When non-resident of the UK and resident of Singapore, it is only in certain circumstances that you will get a personal allowance of tax free UK income each year. To receive UK personal allowance, you must:

  • hold a British passport,
  • be a citizen of a European Economic Area (EEA) country, or
  • have worked for the UK government at any time during that tax year.

If you are British citizen, holding a British passport, you will be entitled to your UK personal allowance.

What if I did not file UK taxes when I should have been?

If you live in Singapore and forgot, or simply didn’t know that you needed to file your UK tax return, you will still need to file the overdue returns and pay any overdue liabilities. It is important to get up-to-date as soon as possible in order to minimise any penalties and interest charged. In certain circumstances, a letter of appeal can be sent to HMRC to minimise penalties due.

Do I need to declare UK sourced income on my Singapore tax return?

As overseas income is not taxable in Singapore, you are not required to declare UK income on your Singapore income tax return.

Are the UK and Singapore tax years the same?

No. The UK tax year runs from 06 April to the following 05 April, whereas the Singapore tax year runs from 01 January to the following 31 December.

How can I file my UK tax return and when will any liability be due?

The same tax return deadlines apply to non-residents as they do to UK residents – 31 January following the tax year end (31 October for paper returns). Automatic late filing penalties will apply after the deadlines have passed. Any liability you may owe upon filing your UK tax return, will also be due by 31 January following the end of the tax year.

As a non-resident you are unable to use HMRC’s online services to file your return. Instead, you need to:

  • submit your tax return by post,
  • use approved tax software, or
  • seek assistance from a tax agent.

When is my Singapore tax return and liability due?

In Singapore, the filing due date for individual tax returns is 15 April following the end of the tax year. If filed electronically, the deadline is 18 April.

Once your individual tax return has been filed, you will receive your Notice of Assessment or tax bill between May and September. Any tax liability is due in full within 30 days of receiving your Notice of Assessment.

Contact Us

At Sheltons Accountants we have extensive experience providing multi-jurisdictional tax advice, advice on tax treaty issues and cross-border tax efficient structuring.

If you need advice or assistance with your UK or Singapore tax obligations, including dual tax return filings, we’re here to help. Simply send us an email at SG@SheltonsGroup.com to arrange a free initial consultation.

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When moving between the UK and Denmark, it is important to be aware of the differences that each jurisdiction imposes on areas of personal taxation. Failing to comply with the relevant procedures and local tax legislation could leave individuals with a series of penalties.

The table below highlights a list of arguably the most important areas of personal taxation that individuals should be aware of when moving between the UK and Denmark. Whilst both countries tax residents on their worldwide income, this is where similarities cease as from here on, the UK and Danish tax systems function differently in almost every way.

UK Tax System vs Danish Tax System:


UK Tax System Danish Tax System
Tax Year for individuals 6 April to 5 April 1 January to 31 December
Who is required to file a Tax Return In the UK, most individuals who are employed will pay tax on their income through payroll and are not required to file a Tax Return.

Tax Returns are required where:

  • Earnings are over £100,000 in a tax year
  • In receipt of non-UK sourced income
  • In receipt of property income
  • In receipt of taxable savings, investments and dividends
  • Claiming income tax reliefs
  • Need to pay capital gains tax
  • Self-employed or partnership income
  • Liable to high income child benefit charge
  • In receipt of taxable income which has not yet been taxed

In Denmark, most individuals who are employed and pay tax on their income through payroll are not required to file.
Tax Returns are required where:

  • In receipt of non-Danish source income
  • In receipt of property income
  • In receipt of some taxable savings, investments and dividends
  • Income from self-employment
Payroll System In the UK, HMRC operates a Pay As You Earn (PAYE) system where tax is collected by the employer through every payslip. The employer then remits the tax withheld to the tax office (HMRC). In Denmark, if you are an employee, your tax is collected through every payslip and sent to the tax authorities. If you are not an employee, taxes are paid through monthly instalments by the individual.  
Tax Free Allowance UK residents (and in some instances non-residents) receive a tax-free personal allowance each year. In 2022-23, the tax-free personal allowance is £12,750. In certain circumstances this can be reduced or increased. The tax-free personal allowance in Denmark is DKK 46,600 for a full year.
Income Tax The UK operates progressive rates of income tax which include:
  • £0 to £12,570 (personal allowance) – 0%
  • £12,571 to £50,270 (Basic rate) – 20%
  • £50,271 to £150,000 (Higher rate) – 40%
  • Over £150,000 (Additional rate) – 45%
    		•  Denmark operates progressive rates of tax on personal income. The rates for 2022 are as follows:

    State tax:

    • Labour market (AM-bidrag)* 8%
    • Bottom tax rate 12.1%
    • Top tax rate 15% applies to income more than DKK 552,500 per year **

    Local tax rates:

    • Municipal tax rate (average) 24.983

    In Denmark there is however a tax ceiling, which is the maximum tax rate applicable to personal income. This ceiling is designed to ensure that the total income tax does not exceed 52.07% for personal income. Church tax and labour market contributions are not included in this tax ceiling.

    *Applicable on gross salary before tax
    **Pro rata
    Capital Gains Tax

    In the UK there is a Capital Gains Tax allowance of £12,300 per year (2022-23). After this your tax rate will depend on whether you’re a ‘Basic rate’ tax payer or ‘Higher rate’ tax payer:

    Basic Rate: 18% on residential property and 10% other chargeable assets

    Higher Rate: 28% on residential property and 20% other chargeable assets

    		 In Denmark, net positive capital gains income is taxed at 37% up to DKK 47,400 (DKK 94,800 for married couples) and 42% thereafter.
    Inheritance Tax In the UK, the standard Inheritance Tax threshold is £325,000 (which can increase to £500,000 where the home is passed to children of the deceased). Where an estate is valued over £325,000 there is a 40% Inheritance Tax rate. In Denmark, there is no Inheritance Tax on the first DKK 312,500 (2022). The inheritance tax for deceased´s children and descendants, stepchildren and their descendants, parents or cohabitants during the last two years of one´s life is 15%, for others the inheritance Tax is 25%.
    Tax Return Deadline 31 January following the end of the tax year (31 October if filing a paper return) 1 May following the end of the tax year. If you have foreign income or are self-employed it is 1 July.
    Tax Payment Deadline 31 January following the end of the tax year. This is the same as the tax return deadline. 31 December in the tax year if you want to avoid interest/surcharges. If you pay after 31 December but before the deadline 1 July 2022, you will avoid the surcharges and only pay the day-to-day interest of 1.7% from the 1 January till the payment date.
    Assessable on Worldwide Income UK residents, for tax purposes are taxed on their worldwide income*. Danish residents, for tax purposes are taxed on their worldwide income.
    National Insurance/ ATP In the UK, both the employee and employer are required to pay national insurance contributions each month. The rates vary from 0% to 13.8%. National Insurance is also due on self-employed income. In Denmark, both the employee and the employer are required to pay labour market supplementary pension (ATP).
    The employee part is DKK 94.65 per month and the employer part is DKK 189.30

    *Assessable on worldwide income (UK) – Individuals resident of the UK with non-domicile status can opt to claim remittance basis and not be taxed on their overseas income as long as it is not remitted to the UK.

    The UK and Danish Tax Systems: An Overall Comparison

    Determining which country has the more competitive tax system is relatively straightforward.

    Whether your income is subject to income tax or capital gains tax, it is evident from the table above, that the UK offers greater tax-free allowances and lower rates of tax. For example, the UK offers a capital gain allowance of £12,300 with a top rate of tax at 28% (residential property), whereas Denmark has no allowance and a 14% higher tax rate standing at 42%.

    As tax systems in the UK and Denmark are extremely different, it requires in-depth analysis to understand how each system operates and the implications which might then present for an individual on a case-by-case basis.

    Contact us

    If you require any advice or assistance with UK or Danish personal tax, we are here to help. Simply send us an email at the address below or fill in our contact form to arrange a free initial consultation.

    Denmark: John Munch, Tax Manager, Sheltons Accountants (Copenhagen), J.Munch@SheltonsGroup.com

    United Kingdom: Ned Shelton, Director, Sheltons Accountants UK (London), N.Shelton@SheltonsGroup.com

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    Are you moving to Denmark and renting out your UK property? If so, you will be classified as a ‘non-resident landlord’ by HM Revenue and Customs (HMRC).

    Below we have covered some of the popular UK and Danish tax issues and questions that arise when becoming a non-resident landlord in Denmark.

    How do I stop my estate agent or tenant from deducting UK tax at source?

    If you have been determined as a non-resident landlord of the UK, your letting agent or tenant will deduct basic rate tax (20%) from your rent. Once the tax year is complete, your estate agent or tenant will provide you with a certificate certifying how much tax they have deducted in the relevant tax year.

    As a landlord, cash flow is important, therefore it’s likely you would prefer to receive your rent in full and pay any tax due through your UK self-assessment tax return.

    The way in which you can receive your rent in full, prior to any taxation, is to file a non-resident landlord form (NRL1). Once the form has been approved, HMRC will inform your letting agent or tenant to stop deducting tax from your rent. From there on, you will receive your rent in full without UK taxation. Any tax deducted earlier in the year will be refunded on your next rental statement.

    However, it is worth noting that HMRC will only approve your NRL1 application if your taxes are up to date. For example, you have no outstanding tax or tax returns due.

    What expenses can I claim on my UK property income?

    If this is your first experience of being a landlord, you may be unsure about what expenses are tax deductible. HMRC iterate that for an expense to be allowable for tax purposes, it should be incurred wholly and exclusively as a result of renting out your property. Typical expenses include buildings insurance, estate agent fees and utility bills (only if not reimbursed by tenants).

    In some instances, what you assume are revenue expenses may in fact be ‘capital expenses’ for example, improving or upgrading something that was existing. Capital expenses are not allowable and cannot be claimed against rental income, however you might be able to set them against capital gains tax if you sell the property in the future. You should seek professional advice if you’re unsure on the tax treatment of your property expense.

    Since April 2020, you have no longer been able to deduct any mortgage expenses from taxable rental income. Instead, mortgage interest is used as a tax reducer, where you receive a tax credit based on 20% of mortgage interest payments. For example, if you make mortgage interest payments of £5,000 per year, you will receive a tax credit of £1,000 to deduct from the liability incurred on your property income.

    Will I be taxed on my UK rental income in Denmark?

    If you’re classified as a tax resident in Denmark, you will need to declare your worldwide income to skat (HMRC equivalent in Denmark). Therefore, as long as you are resident of Denmark, you will need to declare your UK rental income on your Danish tax return.

    Where you have paid tax in the UK on your UK property income, you may be entitled to a Danish foreign income tax offset. As the Danish tax year runs from 1 January to 31 December, the UK property income/expenses along with any UK tax paid will need to be proportioned appropriately.

    In situations where you own a property, but do not receive rental income, or in instances where rental income is below market rates, a tax on the property will apply, no matter where it is located.

    Where a ‘Danish resident’ has property in the UK, the Denmark-UK double tax treaty becomes relevant.

    Will I receive my UK personal allowance as resident of Denmark?

    When non-resident of the UK, it’s only in certain circumstances that you will get a personal allowance of tax free UK income each year. These include the following:

    • you hold a British passport
    • you’re a citizen of a European Economic Area (EEA) country, or
    • you’ve worked for the UK government at any time during that tax year.

    As Denmark is a country in the European Economic Union, it’s likely you will be entitled to your UK personal allowance. Thus, only the rental income over the UK personal allowance will be taxable in the UK.

    How do I file my UK self-assessment tax return from Denmark?

    Regardless of whether you’re a resident of Denmark, renting out a UK property automatically enters you into the UK self-assessment regime. The return will be used to calculate any tax liability arising from your UK property income and any additional UK taxable income.

    The same Tax Return deadlines apply to non-residents as they do to UK residents – 31st January following the tax year end (31st October for paper returns). Automatic late filing penalties will apply after the deadlines have passed.

    As a non-resident you are unable to use HMRC’s online services to file your return. Instead, you need to:

    • Send your tax return by post
    • Use commercial software
    • Get help from a professional

    Contact Us

    If you need advice or assistance with your UK or Danish tax obligations, we are here to help. Simply send us an email at the address below to arrange a free initial consultation.

    Denmark: John Munch, Tax Manager, Sheltons Accountants (Copenhagen), J.Munch@SheltonsGroup.com

    United Kingdom: Ned Shelton, Director, Sheltons Accountants UK (London), N.Shelton@SheltonsGroup.com

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    Are you moving to Singapore and renting out your UK property? If so, you will be classified as a ‘non-resident landlord’ by HM Revenue and Customs (HMRC).

    Below we have covered some of the popular UK and Singaporean tax issues and questions that arise when becoming a non-resident landlord in Singapore:

    How do I stop my estate agent or tenant from deducting UK tax at source?

    If you have been determined as a non-resident landlord of the UK, your letting agent or tenant will deduct basic rate tax (20%) from your rent. Once the tax year is complete, your estate agent or tenant will provide you with a certificate certifying how much tax they have deducted in the relevant tax year.

    As a landlord, cash flow is important, therefore it’s likely you would prefer to receive your rent in full and pay any tax due through your UK self-assessment tax return.

    The way in which you can receive your rent in full, prior to any taxation, is to file a non-resident landlord form (NRL1). Once the form has been approved, HMRC will inform your letting agent or tenant to stop deducting tax from your rent. From there on, you will receive your rent in full without UK taxation. Any tax deducted earlier in the year will be refunded on your next rental statement.

    However, it is worth noting that HMRC will only approve your NRL1 application if your taxes are up to date. For example, you have no outstanding tax or tax returns due.

    What expenses can I claim on my UK property income?

    If this is your first experience of being a landlord, you may be unsure about what expenses are tax deductible. HMRC iterate that for an expense to be allowable for tax purposes, it should be incurred wholly and exclusively as a result of renting out your property. Typical expenses include buildings insurance, estate agent fees and utility bills (only if not reimbursed by tenants).

    In some instances, what you assume are revenue expenses may in fact be ‘capital expenses’ for example, improving or upgrading something that was existing. Capital expenses are not allowable and cannot be claimed against rental income, however you might be able to set them against capital gains tax if you sell the property in the future. You should seek professional advice if you’re unsure on the tax treatment of your property expense.

    Since April 2020, you have no longer been able to deduct any mortgage expenses from taxable rental income. Instead, mortgage interest is used as a tax reducer, where you receive a tax credit based on 20% of mortgage interest payments. For example, if you make mortgage interest payments of £5,000 per year, you will receive a tax credit of £1,000 to deduct from the liability incurred on your property income.

    Will I be taxed on my UK rental income in Singapore?

    Singapore has a territorial tax system, therefore only income sourced in Singapore is subject to tax. Consequently, if you are a Singaporean resident with UK rental income, it will not be subject to tax in Singapore. However, this exemption does not apply if the foreign-sourced income was received through a partnership in Singapore.

    Do I need to declare my UK property income on my Singapore Tax Return?

    As overseas income is not taxable in Singapore, you are not required to declare UK rental income on your Singapore Income Tax Return.

    Will I receive my UK personal allowance as resident of  Singapore?

    When non-resident of the UK and resident of Singapore, it’s only in certain circumstances that you will get a personal allowance of tax free UK income each year. These include the following:

    • you hold a British passport
    • you’re a citizen of a European Economic Area (EEA) country, or
    • you’ve worked for the UK government at any time during that tax year.

    If you are British citizen, holding a British passport, you will be entitled to your UK personal allowance. Thus, only the rental income over the UK personal allowance will be taxable in the UK.

    How do I file my UK self-assessment tax return from Singapore?

    Regardless of whether you’re a resident of Singapore, renting out a UK property automatically enters you into the UK self-assessment regime. The return will be used to calculate any tax liability arising from your UK property income and any additional UK taxable income.

    The same Tax Return deadlines apply to non-residents as they do to UK residents – 31st January following the tax year end (31st October for paper returns). Automatic late filing penalties will apply after the deadlines have passed.

    As a non-resident you are unable to use HMRC’s online services to file your return. Instead, you need to:

    • Send your tax return by post
    • Use commercial software
    • Get help from a professional

    Contact Us

    If you need advice or assistance with your UK or Singapore tax obligations, including dual tax return filings,  we are here to help. Simply send us an email at the address below to arrange a free initial consultation.

    For enquiries please contact:
    Ned Shelton
    Director
    Sheltons Accountants
    N.Shelton@SheltonsGroup.com

    Click here to read our blog where we compare the UK and Singapore Tax systems

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    10 ways you can reduce your tax liability as a UK resident taxpayer

    1.Take advantage of pension schemes – Pension contributions made through your employment can be deducted from your pay before your wages are taxed (under the net pay arrangement). Alternatively, the government will top-up your pension at the basic rate (20%), commonly known as ‘relief at source’. If you’re a higher or additional rate tax payer, your gross contributions will also extend your basic rate and additional rate bands.

    2. Exploit the Marriage Allowance – If you’re married or in a civil partnership, you may be eligible for the marriage allowance. The allowance permits you to relinquish any remaining personal allowance from the lower-earning partner to the higher earner. A maximum of £1,260 can be transferred in 2022-23, however in order to qualify, the higher earner must be a basic-rate taxpayer.

    3. Utilise your personal savings allowance – The current tax allowances (2022-23) allow you to earn £1,000 of interest on savings tax-free if you’re a basic-rate taxpayer and £500 if you’re a higher-rate taxpayer. You will only pay tax on interest over these thresholds.

    4. Make use of your ISA allowance – All UK residents are entitled to open an individual savings account (ISA) and contribute up to £20,000 each tax year. An ISA is a tax-free savings or investment account shielding your investment from income tax, tax on dividends and capital gains tax.

     5. Self Employed: Include all tax-deductible expenses – Working for yourself can be extremely demanding, leaving little or no time to determine which business expenses are tax-deductible. Typical expenses which self-employed individuals usually miss are: Phone costs, mileage allowance and running costs for your home office.

     6. Dividend Allowance – Although the dividend allowance was reduced from April 2018, you can still earn up to £2,000 in dividend income tax free.

     7. Consider your Capital Gain Allowance – Utilising your capital gain allowance of £12,300 (2022-23 allowance) can save you over £3,000 in capital gains tax. Where you don’t use the allowance in a tax year, it’s lost forever, so it’s important to consider when you come to sell assets (shares, second homes etc)

     8. Invest in Enterprise Investment Schemes – If you purchase shares in a qualifying company, you will be able to reduce your tax bill by 30% of the amount invested in that year. The maximum amount you can invest in EIS companies in a tax-year is £1 million, which could result in saving up to £300,000 in income tax.

    9. Benefit from the Rent-a-room relief – If you are letting out furnished accommodation in your home, or considering doing so, you can earn up to a threshold of £7,500 per year tax-free. 

    10. Landlord: Include all tax-deductible expenses – As a landlord, it’s easy to miss some tax-deductible expenses when completing your self-assessment tax return. For an expense to be allowable for tax purposes, it should be incurred wholly and exclusively as a result of renting out your property. Typical expenses which are missed include buildings insurance, accountancy fees, allowable mileage and replacement of domestic goods.

    If you require any advice or assistance with UK personal tax, we are here to help. Simply send us an email at the address below or fill in our contact form to arrange a free initial consultation.

    Contact us

    Ned Shelton
    Director
    Sheltons Accountants UK (London)
    N.Shelton@SheltonsGroup.com

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    When moving between the UK and Singapore, it is important to be aware of the differences that each jurisdiction imposes on areas of personal taxation. Failing to comply with the relevant procedures and local tax legislation could leave individuals with a series of penalties.

    The table below highlights a list of arguably the most important areas of personal taxation that individuals should be aware of when moving between the UK and Singapore. Whilst both countries operate a progressive income tax system, this is where similarities cease as from here on, the UK and Singapore tax systems function differently in almost every way.

    UK Tax System vs Singapore Tax System:


    UK Tax System Singapore Tax System
    Tax Year for individuals 6 April to 5 April 1 January to 31 December
    Who is required to file a Tax Return In the UK, most individuals who are employed will pay tax on their income through payroll and are not required to file a Tax Return.

    Tax Returns are required where:

    • Earnings are over £100,000 in a tax year
    • In receipt of non-UK sourced income
    • In receipt of property income
    • In receipt of taxable savings, investments and dividends
    • Claiming income tax reliefs
    • Need to pay capital gains tax
    • Self-employed or partnership income
    • Liable to high income child benefit charge
    • In receipt of taxable income which has not yet been taxed

    Tax Returns are required where:

    • Individuals who are tax resident and have annual income of S$20,000 or more 
    • Non-resident individuals who derived income from Singapore 
    Payroll System In the UK, HMRC operates a Pay As You Earn (PAYE) system where tax is collected by the employer through every payslip. The employer then remits the tax withheld to the tax office (HMRC). In Singapore, there is no income tax withheld at source via payroll. It is the employee’s responsibility to file their annual tax declaration and pay directly to the Inland Revenue Authority of Singapore (IRAS), the local tax authority.
    Tax Free Allowance UK residents (and in some instances non-residents) receive a tax-free personal allowance each year. In 2023-23, the tax-free personal allowance is £12,750. In certain circumstances this can be reduced or increased. Tax residents of Singapore receive the first S$20,000 of their income charged at a 0% tax rate.
    Income Tax The UK operates progressive rates of income tax which include:
  • £0 to £12,570 (personal allowance) – 0%
  • £12,571 to £50,270 (Basic rate) – 20%
  • £50,271 to £150,000 (Higher rate) – 40%
  • Over £150,000 (Additional rate) – 45%
    		•  As with the UK, Singapore operates a progressive income tax system. The current individual tax rates in Singapore are as follows:
  • S$0 to S$20,000 – 0%
  • S$20,000 to S$30,000 – 2%
  • S$30,000 to S$40,000 – 3.5%
  • S$40,000 to S$80,000 – 7%
  • S$80,000 to S$120,000 – 11.5%
  • S$120,000 to S$160,000 – 15%
  • S$160,000 to S$200,000 – 18%
  • S$200,000 to S$240,000 – 19%
  • S$240,000 to S$280,000 – 19.5%
  • S$280,000 to S$320,000 – 20%
  • Above S$320,000 – 22%

    • The top marginal income tax rate will be increased with effect from Year of Assessment (YA) 2024 (calendar year 2023). Chargeable income in excess of $500,000 up to $1 million will be taxed at 23%, while that in excess of $1 million will be taxed at 24%; both up from the current rate of 22%.
    Capital Gains Tax

    In the UK there is a Capital Gains Tax allowance of £12,300 per year (2022-23). After this your tax rate will depend on whether you’re a ‘Basic rate’ tax payer or ‘Higher rate’ tax payer:

    Basic Rate: 18% on residential property and 10% other chargeable assets

    Higher Rate: 28% on residential property and 20% other chargeable assets

    		 Singapore has no capital gains tax.
    Inheritance Tax In the UK, the standard Inheritance Tax threshold is £325,000 (which can increase to £500,000 where the home is passed to children of the deceased). Where an estate is valued over £325,000 there is a 40% Inheritance Tax rate. Inheritance tax, also known as estate duty was abolished for deaths on and after 15 February 2008 in Singapore.
    Tax Return Deadline 31 January following the end of the tax year (31 October if filing a paper return) In Singapore, the filing due date for individual tax returns is 15 April following the end of the tax year. If filed electronically, the deadline is 18 April.
    Tax Payment Deadline 31 January following the end of the tax year. This is the same as the tax return deadline. Once your individual tax return has been filed, you will receive your Notice of Assessment or tax bill between May and September. Any tax liability is due in full within 30 days of receiving your Notice of Assessment.
    Assessable on Worldwide Income UK residents, for tax purposes are taxed on their worldwide income*. Overseas income received in Singapore is generally not taxable and need not be declared in the Income Tax Return (‘territoriality’ system) 
    National Insurance/ CPF In the UK, both the employee and employer are required to pay national insurance contributions each month. The rates vary from 0% to 13.8%. National Insurance is also due on self-employed income. Singapore operates ‘The Central Provident Fund’ (CPF). Both employees and employers must contribute to the fund. The statutory rate for employees is 20% and the rate of the employer’s contribution is 17%. (There are caps – above which CPF does not apply)

    *Assessable on worldwide income (UK) – Individuals resident of the UK with non-domicile status can opt to claim remittance basis and not be taxed on their overseas income as long as it is not remitted to the UK.

    The UK and Singapore Tax Systems: An Overall Comparison

    As you would expect, Singapore’s tax system is far more attractive than the United Kingdom’s.

    While the UK and Singapore both operate progressive income tax systems, the rate at which you pay tax in Singapore is substantially less, with the UK’s top rate of income tax over double that of Singapore’s. For example, where an individual earns a salary of £150,000 in the UK, they will pay a total of £52,460 in income tax. Whereas, if a tax resident earns £150,000 (S$250,500) in Singapore they will pay a total of £18,531 (S$30,947) in income tax. The above calculations are for illustrative purposes only, they do not consider any eligible reliefs or deductions in either country.

    Singapore’s tax system also boasts no tax on capital gains, where the UK, although offers a tax free allowance of £12,300, applies tax rates of between 10% to 28% on capital gains above this.

    What’s more, where Singapore has no inheritance tax, the UK still maintains an aggressive tax rate of 40% above the inheritance tax threshold.

    It is therefore evident that where an individual moves from the UK and acquires tax resident status in Singapore,  they can heavily reduce their tax burden.

    If you require any advice or assistance with UK or Singapore personal tax, we are here to help. Simply send us an email at the address below or fill in our contact form to arrange a free initial consultation.

    Contact us

    At Sheltons Accountants Singapore, Australai and the UK we have extensive experience in setting up and administering operations for overseas-based businesses. We provide a broad range of services, from setting up the entity and opening a bank account, to providing the legally required local director and a full range of tax, accounting, company secretarial and administrative services.

    We are also experienced in providing local and international tax advice, advice on tax treaty issues and cross-border tax efficient structures.

    If you need advice or assistance with UK, Singaporean or Australian matters, we’re here to help. Simply send us an email at SG@SheltonsGroup.com.

    Click here to read our blog where we compare the UK and Australian Tax systems.

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    When moving between the UK and Australia, it is important to be aware of the differences that each jurisdiction imposes on areas of personal taxation. Failing to comply with the relevant procedures and local tax legislation could leave individuals with a series of penalties.

    The table below highlights a list of arguably the most important areas of personal taxation that individuals should be aware of when moving between the UK and Australia. Whilst both countries operate a progressive income tax system, with the top tax rate peaking at 45%, this is where similarities cease as from here on, the UK and Australian tax systems function differently in almost every way.

    UK Tax System vs Australian Tax System:


    UK Tax System Australian Tax System
    Tax Year for individuals 6 April to 5 April 1 July to 30 June
    Who is required to file/lodge a Tax Return

    In the UK, most individuals who are employed will pay tax on their income through payroll and are not required to file a Tax Return.

    Tax Returns are required where:

    • Earnings are over £100,000 in a tax year
    • In receipt of non-UK sourced income
    • In receipt of property income
    • In receipt of taxable savings, investments and dividends
    • Claiming income tax reliefs
    • Need to pay capital gains tax
    • Self-employed or partnership income
    • Liable to high income child benefit charge
    • In receipt of taxable income which has not yet been taxed

    		 All Australian residents and non-residents with any Australian sourced income (some exclusions apply)
    Payroll System In the UK, HMRC operates a Pay As You Earn (PAYE) system where tax is collected by the employer through every payslip. The employer then remits the tax withheld to the tax office (HMRC). Australia operates a Pay As You Go Withholding system which deducts tax and is then paid to the tax office. As with the UK, the employer withholds tax when processing payroll and then forwards this to the tax office.
    Tax Free Allowance UK residents (and in some instances non-residents) receive a tax-free personal allowance each year. In 2023-23, the tax-free personal allowance is £12,750. In certain circumstances this can be reduced or increased. There is a tax-free threshold of $18,200 for all Australian resident taxpayers, regardless of the source of income. Foreign and temporary residents are excluded from this threshold.
    Income Tax The UK operates progressive rates of income tax which include:

    • £0 to £12,570 (personal allowance) – 0%
    • £12,571 to £50,270 (Basic rate) – 20%
    • £50,271 to £150,000 (Higher rate) – 40%
    • Over £150,000 (Additional rate) – 45%

    Australia operates progressive rates of income tax which include:

    • $0 to $18,200 – Nil
    • $18,201 to $45,000 – 19%
    • $45,001 to $120,000 – 32.5%
    • $120,001 to $180,000 – 37%
    • $180,001 and over – 45%

    The income tax rates above are for ‘Australian’ Residents only. Different rates apply for ‘temporary’ and ‘foreign’ residents.
    Capital Gains Tax

    In the UK there is a Capital Gains Tax allowance of £12,300 per year (2022-23). After this your tax rate will depend on whether you’re a ‘Basic rate’ tax payer or ‘Higher rate’ tax payer:

    Basic Rate: 18% on residential property and 10% other chargeable assets

    Higher Rate: 28% on residential property and 20% other chargeable assets

    There is a 50% Capital Gains Tax discount for Australian individuals who own an asset for 12 months or more. This means you pay tax on only half the net capital gain on that asset.

    Taxable Capital Gains are added to the individuals assessable income and are taxed at the marginal rate at which the income falls.
    Inheritance Tax In the UK, the standard Inheritance Tax threshold is £325,000 (which can increase to £500,000 where the home is passed to children of the deceased). Where an estate is valued over £325,000 there is a 40% Inheritance Tax rate. Australia does not have any Inheritance Tax.
    Tax Return Deadline 31 January following the end of the tax year (31 October if filing a paper return). In Australia, the due date is 31 October following the end of the tax year. However, if an individual is registered with a tax agent this will usually extend to 15 May of the following year i.e. tax-year end 30 June 2022 would be due 15 May 2023.
    Tax Payment Deadline 31 January following the end of the tax year. This is the same as the tax return deadline.

    In Australia, the tax payment deadline depends on when the tax return is due and the date it is lodged. Where a tax return is due 15 May, the following payment dates will apply when the tax return is lodged:

    • Up to and including 12 February, the payment date is 21 March
    • From 13 February to 12 March, the payment date is 21 April
    • From 13 March, the payment date is 5 June

    If the tax return is not due by 15 May, the payment will be due on the later of 21 days after the:

    • Relevant lodgement due date, or
    • Notice of assessment is deemed received
    Assessable on Worldwide Income UK residents, for tax purposes are taxed on their worldwide income*.

    Australian residents for tax purposes, are also taxed on their worldwide income.

    ‘Foreign’ and ‘temporary’* residents for tax purposes only need to declare income and gains derived in Australia.
    National Insurance/ Medicare In the UK, both the employee and employer are required to pay national insurance contributions each month. The rates vary from 0% to 13.8%. National Insurance is also due on self-employed income. In Australia, individuals must pay a flat rate of Medicare (unless exempt). The Medicare levy is 2% of an individual’s taxable income. An additional Medicare levy of up to 1.5%, unless they pay for private health insurance.

    *Assessable on worldwide income (UK) – Individuals resident of the UK with non-domicile status can opt to claim remittance basis and not be taxed on their overseas income as long as it is not remitted to the UK.
    *Assessable on worldwide income (AUS) – Individuals who are ‘temporary’ resident will also be taxable on income earned from employment or services performed overseas whilst temporary resident.

    The UK and Australian Tax Systems: An Overall Comparison

    Determining which country has the more competitive tax system is no easy task.

    Although income tax is generally lower in the UK (due to the progressive tax bandings), the Australian system includes a considerably lesser Medicare tax in comparison to the UK’s National Insurance rates. What’s more, where Australia allows a 50% discount on net taxable Capital Gains, the rate at which Capital Gains tax is payable in the UK may be under half of what individuals could be liable to pay in Australia (if their annual income exceeds the top tax bracket in Australia).

    In addition, establishing whether an individual is an ‘Australian’, ‘foreign’ or ‘temporary’ tax resident of Australia, or their ‘domicile’ status when tax resident of the UK, heavily dictates their tax liability due at the end of the tax year.

    Since 1978, Australia’s tax system has operated with no inheritance tax –which saw Australia as the first developed country to abolish death duties. In stark contrast, the UK still maintains an aggressive tax rate of 40% above the inheritance tax threshold. It is evident that, where an individual’s assets equate to more than £325,000 on death, the Australian tax system is significantly more attractive.

    As the tax systems in the UK and Australia are extremely different, it requires in-depth analysis to understand how each system operates and the implications which might then present for an individual on a case-by-case basis.

    If you require any advice or assistance with UK or Australian personal tax, we are here to help. Simply send us an email at the address below or fill in our contact form to arrange a free initial consultation.

    For enquiries please contact:
    Ned Shelton
    Director
    Sheltons Accountants
    N.Shelton@SheltonsGroup.com

    Click here to read our blog in regard to renting out your UK property whilst living in Australia.

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