Through The Looking Glass: What Happens If We Move?
This is not one of the main topics of mastery for the Finance pillar here at Prident, but this has been a question raised a couple of times and warrants some research.
The objective(s) do not include making a case for LGBTQ+ folk in Singapore to move overseas, or to stay. Instead, the focus will be on picking up one Financial Consultant’s way of “how to think” about several financial implications of moving overseas, and then creating your own system and framework. This is a small part of what our work as Financial Consultants look like, albeit in a less tailored, more vague fashion. I’m just wrecking havoc, aren’t I.
An easy way would be to break the financial aspect down to 3 areas:
A. Cost of living in various LGBTQ+ friendly places, taxes and others
TLDR:
- Look at cost of living comparison table
- Do up a will with a practitioner
- Read C. Having assets globally and speak to a FC
A. Cost of living in various LGBTQ+ friendly places, taxes and others
Cost of living
Personal Income tax and others
Taxes upon death
Same sex couples – Same entitlements? Taxes, reliefs, grants and others
Cost of living
30 LGBTQ+ friends participated in an informal poll and these countries were voted to be the countries they would consider living in – Canada, Australia, Taiwan and Thailand.
The vagueness of the data irritates me, but it is necessary in order to cater to most of us reading this. Average income will not be particularly useful due to industry differences and more. It will be more effective to use the difference in cost of living to “translate” and ask for a certain package when negotiating income. Doing that will allow at least a similar standard of living in a new country.
How to read this – if you’re spending SGD800 on food a month here, it is likely you will spend SGD912 in Aussie. You can estimate the total of what you need in total. Tweedledum and Tweedledee, expenses will be high wherever you will be.
Personal Income tax and others
Figure 2
Tax brackets and percentages above are based on individuals who are residents. This generally refers to people who reside or have stayed in that place for more than 180-183 days in that year.
Residents are subject to Canadian income tax on their worldwide income. If any income is due to services performed outside Canada and is subject to foreign tax, relief from double taxation is available by claiming foreign tax credits.
If a resident’s non-Taiwan sourced income exceeds TWD1,000,000, such income is subject to Basic Tax generally referred as Alternative Minimum Tax (AMT) at 20%.
Types of taxable income in most places include your annual income, cost-of-living allowance, expatriation premium, relocation allowance, and sometimes group life insurance payments made by your employer on your behalf. It seems that respective Labor Insurances and National Health Insurances are not taxable.
Singapore has no capital gains tax (a tax on profit from the sale of property or an investment) . As for the other countries mentioned, capital gains are subject to the normal personal income tax rates.
Taxes upon death
Singapore generally does not impose inheritance tax or estate taxes. However, there are tax implications for certain residential property sales, gifts and estates that continue to generate income after death and trusts.
Australia generally does not impose all those mentioned above as well. In some circumstances, an immediate income tax liability can arise. This includes when assets are transferred on death to a foreign resident – there may be capital gains tax (CGT).
There are no estate taxes in Canada. However, there is tax when real estate is transferred. Nonresidents may also be liable for tax at the time of death if they own taxable Canadian property. Do note that Canada has quite a few tax exemptions and reliefs.
Inheritance and gifts are taxed in Taiwan at a flat rate of 10% upon transfer of the estate upon death. Foreign national donors are also liable to this tax should they own property in Taiwan.
There is inheritance tax in Thailand of 5-10%. One exception is when you are a legal spouse. This means that if you are in a same-sex relationship, your partner will be subjected to taxes. Properties which are acquired as a gift or inheritance are subject to capital gains tax and are assessed separately.
Same sex couples – Same entitlements? Taxes, reliefs, grants and others
Generally, Canada extends most, if not all, legal rights to same sex registered or de facto partners. This includes social security, pension, inheritance, and tax benefits. For example, a lesbian couple in Canada can make spousal Registered Retirement Savings Plan (RRSP) contributions (similar to Singapore’s Supplementary Retirement Scheme) for income tax purposes and can make tax free RRSP rollovers in the same way that hetero couples can.
The same goes for Australia. It even has a Dad and Partner Pay scheme which is a new payment under the Australian Government’s Paid Parental Leave scheme. It’s now available to eligible working dads or partners who care for a child born or adopted. It provides up to two weeks of government-funded pay at the rate of the national minimum wage.
If you’re looking at Australia, some other tax matters relevant to couples include – liability and relief for the Medicare levy surcharge, entitlement to the 20% medical expense offset based on the combined expenses of couples, Senior Australians Tax Offset and Education Tax Refund.
Thailand does not recognize same-sex marriages, civil unions, domestic partnerships, unregistered cohabitations, or any other form of same-sex unions.
As for Taiwan, same-sex marriage will have most of the rights and obligations of a marriage between a man and a woman, with the exception of co-adoption of a child and marriage to a foreign national.
For Canada, Australia and Taiwan, all employment-related laws that cover marriage and spouse will also apply to same-sex married couples. Companies should provide or at least be moving towards providing equal benefits to employees and making adjustments to internal diversity and inclusion policies along the way.
While heterosexual couples enjoy the right to marry, adopt children, and receive their partners’ pension benefits after death, homosexual couples in Singapore, Taiwan and Thailand face discrimination in all of these categories and more.
Laws of intestacy for couples
Degree of legal protection
Your expectations of how fast these places will progress on the LGBTQ+ front
When it comes to legal matters, there are at least 3 areas to pay attention to – laws of intestacy, level of protection for LGBTQ+ and to what extent would the environment remain like that.
Laws of intestacy for couples
If an individual does not have a valid will in relation to an asset, he is ‘intestate’. When an individual dies ‘intestate’, he loses control over who will inherit his estate and default provisions will automatically kick in instead. The applicable intestacy rules will turn on where the assets are located and the domicile of the individual who has passed. For e.g. In Singapore, since same-sex marriage is not legalised, your money will not go to your partner automatically in event of your passing.
In Canada, same-sex marriage is legal nationwide and has no residency requirement for marriage (though it does have a one-year residency requirement for divorce). Canada has 13 provinces with different legislations. Generally, most provinces have a ‘preferential’ share, which means a certain % of the deceased’s estate will go to the surviving spouse first, before the remainder gets split up between family members. The surviving spouse will be entitled to receive the ‘preferential share’ and a portion of the remaining estate.
The right to marry nationwide in Australia is not determined by sex or gender. You don’t need to live in Australia permanently or be a citizen in order to get legally married there. If a person dies intestate, their spouse is entitled to the whole of the estate. A spouse can include a husband, wife, de facto partner, or civil partner. Same-sex marriage is included. When determining the viability of a de facto relationship, the law considers several factors, including the length of the relationship (must be together a minimum of 2 years) and the nature of the living arrangements.
Taiwan same-sex marriage is only available to Taiwanese citizens or a citizen of a foreign country that recognizes same-sex marriage who seeks to marry a Taiwanese citizen. For example, a Taiwanese national and his or her same-sex partner can be married in Taiwan if the person is from the US or Australia, where same-sex marriage is legal. If the foreign partner is from Singapore, where it is not legal, the couple cannot be married in Taiwan. Foreign same-sex couples in Taiwan can apply for a non-legally binding marriage certificate in Taipei.
Despite being known for being LGBTQ+ friendly, same-sex marriage is not recognised in Thailand. The Cabinet approved a bill in 2020 that permits same-sex civil partnerships, although it has yet to be passed by parliament. This legislation does not grant same-sex couples the same rights as heterosexual couples. For example, under the proposed law, civil partners would be able to adopt children, jointly own property and pass on inheritance. However, they would not enjoy all the other rights and benefits provided to heterosexual married couples.
Same-sex married couples in many countries do not share all of the same rights and benefits as different-sex married couples, such as the right to adoption.
Huh, means what?
If you have not done so, do up a will and complete your nominations. You can consider multiple wills and/or a worldwide will when it comes to estate planning if you have assets in different jurisdictions so that your assets can go to whoever you want.
A worldwide will, also known as multijurisdictional will, is a document that states who gets your assets located in several jurisdictions and part (or all) of the things you own around the world. Multiple wills, also called “situs” wills, are separate documents for assets located in different legal jurisdictions. They are usually executed in that area according to local laws.
Some practitioners favour the approach that an individual should have different wills for each jurisdiction, and others have a preference for as few wills as possible. Those who favour the multiple wills approach tend to do so on the basis that multiple wills speed up matters post-death: probate or the equivalent procedures can be pushed for in more than one jurisdiction at the same time. With multiple wills, care must be taken to avoid gaps (i.e. missing jurisdictions) and to steer clear of ‘accidental’ revocations (valid destroying of a will). An effective will should also address the burden of debts and taxes. If an individual has more than one will, the wills should be consistent across the board.
Degree of legal protection
Most countries’ constitutions protect people regardless of sex, religion, race or ethnicity, but do not extend the same legal protections to the LGBTQ+ community. Although this arguably does not contribute much to the financial aspects of choosing a place of residency, it matters a lot when you will be spending lots of time working and living there as a queer individual.
Three sections above cover the different levels of legal protection against discrimination based on sexual orientation.
Constitutional Protection: the text of the Constitution explicitly prohibits discrimination based on sexual orientation.
Broad Protection: protections against discrimination based on sexual orientation cover at least three of the following fields: Employment, health, education, housing and provision of goods and services.
Employment: legislation in force explicitly protects workers from discrimination based on their sexual orientation in the workplace. The scope of such protection varies from country to country and may or may not cover issues of unfair dismissal, social security, benefits, and so on.
Limited/Uneven Protection: This category groups a set of countries where protections do not amount to any of the criteria listed above, or where employment or broad protection is only available unequally in a few subnational jurisdictions.
Your expectations of how fast these places will progress on the LGBTQ+ front
Broadly speaking, it seems that places selected are moving in a good direction for the LGBTQ+ folk across the globe. However, we shall skip a deep dive into that because this is not a discussion about navigating countries and their contradictions.
C. Having assets globally – what happens?
Cash/near cash accounts
Property
CPF
Policies and anything that requires regular financing
Global coverage
Wills and trusts
Cash/near cash accounts
We will start with the simplest – offshore bank accounts. You can keep multiple accounts around the world. With fuss free international transfers, this will be helpful in keeping your ongoing payments in Singapore going. Banks may require information on the source of your deposits.
Property
Owning property in Singapore and purchasing another in one of the aforementioned places
HDB owners – You can only buy overseas property after MOP
If you bought a HDB flat (BTO/resale), you will need to wait out the five-year Minimum Occupation Period (MOP) before you can buy an overseas property. Do note that this rule only applies for residential properties. If you wish to buy an overseas property, you will need to sell your HDB flat within 6 months of the purchase of your flat.
General rules
You don’t need to pay ABSD for overseas property
For Singaporeans, the Additional Buyer’s Stamp Duty ABSD is an extra 12- 15% tax on the 2nd and subsequent property purchases in Singapore. This does not apply for property overseas.
Purchasing property in one of the aforementioned places and then purchasing property back in Singapore
If you already own an overseas property, you cannot buy an HDB flat
If you wish to buy an HDB resale flat after buying overseas property, you will need to sell additional private property (whether in Singapore or overseas) on hand within 6 months.
CPF cannot be used to pay for overseas property, but local banks offer overseas property loans
If you go with a bank in Singapore, the Total Debt Servicing Ratio (TDSR) applies. Your mortgage will count towards your monthly debt obligations, which in total, cannot exceed 60% of your gross monthly income.
Notes about property purchase in aforementioned places
In Canada, citizens, residents, or non-residents can purchase property. That means that even as a non-resident who lives full-time in another country, you will be able to buy land in Canada. Only non-residents (in the country for under six months at a time or a foreign individual who is living in another country) have to pay speculation tax, if your property is in Ontario and BC. You also will be required to pay higher taxes on any rental income you collect from your property.
If you are a temporary resident in Australia (individuals who hold a temporary visa that permits them to stay for more than 12 months or have applied for a PR and hold a bridging visa: You cannot buy established dwellings as investment properties. You can also only purchase one, which must also be your primary place of residence. You are not allowed to rent any part of the property. As long as the Foreign Investment Review Board (FIRB) grants approval, you can buy as many new dwellings as you desire.
There are no FIRB restrictions for Australian PRs. Australian permanent residents share the same treatment as citizens with regards to the purchase of residential property in Australia.
Non-residents can only buy new dwellings and not established ones and have to be granted permission by the FIRB.
Singaporeans are not allowed to own land in Taiwan and thus they can not buy houses. Nevertheless, Singaporeans may acquire apartments for residential use.
A foreigner cannot own land in Thailand, he can own the house or apartment built thereon. Buyers of expensive real estate (minimum transaction amount is 10 million Thai Baht) will receive a residence permit for 5 years. Such a residence permit will be called Elite Visa Flexible One. Its owners will be able to enter Thailand without a visa and live in the country for the duration of the status. This is similar to programs in Greece and Malta.
CPF
Planning to keep your Singapore citizenship/PR
If you’re moving overseas for a short while or a couple of years for work and more, your CPF accounts will remain active. The amounts will continue to earn interest but there will be no more contributions since you and your boss are not required to do so.
Medisave cannot be used to pay for your medical expenses while you’re overseas. However, you can still use that to pay for a portion of hospital bills for your family members who are in Singapore, except well, your same-sex partner.
Since your CPF accounts are accumulating interest, you can consider making periodic voluntary contributions to your Medisave and via the Retirement Sum Topping-Up Scheme for tax reliefs.
Planning to leave Singapore for good
If you intend to renounce your citizenship or PR status, you can withdraw all your CPF savings (Ordinary Account, Special Account and Medisave).
Investments made via the CPF Investment Scheme (CPFIS) will be transferred to your Central Depository (CDP) account. You can then keep or liquidate them. Your country of residence will not affect your ability to make any investments under CPFIS.
If you do withdraw all your CPF savings, you are not required to refund any savings that you may have used for your property or education loan.
For those with the CPF LIFE plan already in effect, you can apply to terminate the plan and receive the remaining unused premiums, or opt to remain in the CPF LIFE Scheme and continue to receive monthly payouts to your Singapore bank account.
CPF Savings and Property
If you bought property in Singapore and are paying your housing loan installments (either to HDB or a bank) using your CPF-OA savings, you can choose to continue repaying the loan from your OA. For both OA and cash installments, do monitor and make arrangements for payments.
If you wish to sell your property before leaving Singapore and if you used your CPF savings to finance it, you will have to refund the principal amount and accrued interest, back to the CPF account that you used.
CPF Insurance Schemes
The Dependants’ Protection Scheme and provide a little coverage for your loved ones in Singapore should you pass on or become permanently unfit for work. You will still be covered unless you opt out or do not renew them. You have the option of using your CPF savings or cash to pay the premiums for these insurance schemes. The same applies for the Home Protection Scheme.
Returning to Singapore
You have given up your Singapore citizenship or your status as a PR, but wish to return as a PR. To do this, you will need to refund the full CPF amount you withdrew, along with earned interest. This will not apply if you return as a foreigner.
Regardless of where you choose to stay, you should continue to set aside funds to build up your retirement funds. Do appoint the necessary Power of Attorneys to perform any transactions on your behalf when you are unable to do so, should you reside overseas.
Policies and anything that requires regular financing
Insurance policies and investment plans mostly cover worldwide, except for a short list of excluded countries.
Policies that provide lump sum coverages can and should be stacked up. This means you can have a policy that covers SGD500k critical illness here, and obtain another policy in Australia that covers you for another AUD200k in the event of a critical illness. If there is a need to, you will be able to claim both amounts separately and the process is really simple.
The only area that might present a duplication of coverage would be anything based on a ‘reimbursement basis’ because you can only claim the expense once. This refers to mostly hospital coverage and medical expense reimbursement. For example, if the hospital bill chalks up to 100k, you will only be able to claim that 100k, whether it’s from one insurer or separate insurers.
Benefits of keeping multiple plans worldwide include worldwide coverage, varying coverages and definitions, hedging against currency risks and diversification. The disadvantage is having to set up automatic payments or remembering to pay payments in different currencies.
Global coverage
Most insurance and investment plans provide global coverage. This will work together with local health insurance schemes and company insurance.
It takes a while to become a permanent resident or citizen overseas. In the meantime, local health insurance may not cover individuals adequately depending on your needs. Company group policy coverages can vary largely as well. Due to that, one can consider having coverage from private insurers wherever you reside. If you identify as LGBTQ+, do remember to check the definitions of ‘spouse’ and ‘family’!
Wills and trusts
The LGBTQ+ community cannot rely on intestacy laws around the world. Consider setting up a will and completing your insurance nominations. You can consider multiple wills and/or a worldwide will should you have assets in different jurisdictions. Prident did a series on Estate Planning, which covers wills and trusts. You can read more on the site!
Ending note
Through The Looking Glass ends with a poem with the last few lines –
“In a Wonderland they lie,
Dreaming as the days go by,
Dreaming as the summers die:
Ever drifting down the stream—
Lingering in the golden gleam—
Life, what is it but a dream?”
My polite answer – A rather difficult situation, if you’re queer. Speak to financial consultants, lawyers and estate planners. This write-up was tough due to the need to keep it simple and extremely vague for it to not be leading. Feel free to reach out to share your ideas and questions!
Notes and Recommended Resources:
1 Through The Looking Glass represents imagination and options, but according to the rules of chess. The chess game provided Lewis Carroll the conceit for Alice’s adventures, because his writing is governed by logic and mathematics (he was a mathematician at Oxford). Enjoy your options, but must have some logic sometimes ok.
Figure 1 Numbeo – Cost of living
Healthcare costs were excluded because the price, access level, and quality of health care available to expats change significantly from country to country, and even from city to city.
In some places health care is provided by the government and financed via employer contributions, or employee contributions, or direct taxes, or a mix of these. In some other places you will need to purchase insurance that can be paid as a % of your salary, as a fixed cost, as a premium + variable, etc. Yet in other places it depends on your kind of employment, your demographic group, family circumstances, whether you are self employed, or employed by a small firm, or by a large firm, etc.
This variability makes it very difficult to get a comparable standard price for health care across cities, countries and expats.
2 Cost of living is just 1 measure of the quality of life. I found this website useful. It allows you to change the weightage of what you deem important, and then rank countries based on those factors.
3 The Global Economy – Cost of living
4 Worldwide Estate and Inheritance Tax Guide by EY (2021)
5 Cross Canada Complexities for Estate Planning
6 Canada’s Succession Laws – See page 13 for intestate rights breakdown according to jurisdiction
8 Singaporeans buying overseas properties
9 Canstar – Australian property market rules
10 Brighten – Australian property market rules
11 CFR’s Paul J. Angelo and Dominic Bocci unpack the changing landscape of global LGBTQ+ rights
12 Human Rights Watch provides extensive coverage on global LGBTQ+ rights
13 ILGA’s examines laws regarding same-sex relations around the globe
About the Author
Wan Yi is in her 6th year of providing holistic financial planning services, which includes insurance, investments, family and retirement planning, business and estate planning. To do this, she partners with law firms, general insurance firms as well as investment platforms to ensure top notch service.
Her aim is to equip people with the clarity and confidence to execute decisions. There is a lot of noise, but money does not have to be complicated. Wherever you’re at, let’s make a plan and adapt along the way. You can reach out to her through Prident, LinkedIn or Facebook.
Disclaimer: The views expressed belong solely to the individual contributors in their individual capacities and do not necessarily reflect those of their respective employers, organisation or other group. Any information provided does not constitute legal, financial or any kind of advice. You should obtain specific advice suitable for your circumstances from an appropriate professional before taking any action. Although we try our best to ensure the accuracy of the information on this website, you rely on it at your own risk. We welcome feedback relating to factual accuracy via email at info@prident.co.
