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Estate tax on the deemed value of an estate at death has been removed for deaths after 15 February 2008. For deaths prior to this date, estate tax was payable on the principal value of all property that passed or was deemed to pass to the beneficiaries, subject to exemptions of S$9 million for residential properties and S$600,000 for nonresidential assets.

1.1 Inheritance tax — stamp duty

As of 19 February 2011, fixed duty for most instruments upon the distribution of property to a beneficiary of a deceased’s estate has been abolished. However, if the document was executed before 19 February 2011, a nominal fixed duty remains payable.The fixed duty is payable if the properties are distributed in accordance with the individual’s will or the Intestate Succession Act or the Muslim Law of Inheritance; in these cases only a fixed stamp duty of S$10 applies,

If the distributions are not in accordance with the above, then the documents are regarded as a transfer by way of gift (see Section 1.2). In such cases, full duty will be charged on the excess entitlement acquired by the beneficiary.

For example, under the Intestate Succession Act, if a widower died without leaving a will and was survived by 4 children, these children would be entitled to equal shares of the estate. If the distribution was made in line with this, then there would either be no fixed duty payable (post-19 February 2011) or S$10 (pre-19 February 2011). However, if the whole property is transferred to only 1 child, then the excess transfer (75%) will be subject to full duty.

Documents are required to be stamped within:

• 14 days from the date of execution provided the document was signed in Singapore.
• 30 days of its receipt in Singapore provided the document was signed overseas.

A penalty of up to 4 times may be imposed if the documents are stamped late or insufficiently.

1.2 Gift tax — stamp duty

For any conveyance or transfer operating as gifts, the documents shall be chargeable with stamp duty as if it were a conveyance or transfer on sale. In such instances, for transfers involving immovable properties, the stamp duty will be computed based on the market value of the immovable properties. For transfers involving shares, stamp duty will be computed on the net asset values of the shares transferred.

The full duty rates are as follows:

• S$1 for every S$100 or part thereof for the first S$180,000.
• S$2 for every S$100 or part thereof for the next S$180,000.
• S$3 for every S$100 or part thereof of the remainder.

The stamp duty rate for the transfer of shares is 0.2% on the purchase price or net asset value, whichever is higher.

A document can be presented for stamping at any time before signing of the document. However, once a chargeable document is signed, duty must be paid within:

• 14 days from the date of signing of the document (which is the date of the document).
• 30 days from the date of receipt in Singapore if the document is signed overseas.

A penalty of up to 4 times may be imposed if the documents are stamped late or insufficiently.

If full duty is payable (i.e., transfer by way of gift), then the submission for stamping should be as follows:

• Documents executed (signed) before 1 January 2009
  • The document must be submitted to the Commissioner of Stamp Duties for adjudication. Adjudication and valuation fees will be charged accordingly. Neither taxpayers nor agents are permitted to e-stamp such documents.
• Documents executed (signed) on or after 1 January 2009
  • If a document is signed relating to a transfer of property by way of a gift on or after 1 January 2009, then it is not required to submit such documents for adjudication. Instead the individual may e-stamp the document based on the market value of the property at the date of execution or signing of the document. An individual can stamp the document via the e-stamping system using the transfer of immovable property, land, stocks and shares by way of a gift module.

1.3 Real estate transfer tax

For residential properties acquired on or after 20 February 2010, there may be the Seller’s Stamp Duty (SSD) payable upon the sale of a property that was transferred to a beneficiary at death. SSD is also due for any other form of sale or transfer of residential property outside of that transferred via inheritance.

For residential property transferred because of inheritance or right of survivorship in joint tenancy, the SSD will be payable if the property is disposed of within a year of the property being acquired by the deceased (if acquired by the deceased after 20 February 2010), within 3 years if acquired on or after 30 August 2010 or within 4 years if acquired on or after 14 January 2011.

The rate of the SSD in this scenario is applied to the market value of the residential property, as follows:

Between 20 February 2010 and 29 August 2010 (inclusive)

• Within 1 year:
  • 1% on the first S$180,000.
  • 2% on the next S$180,000.
  • 3% on the remainder.
• More than 1 year:
  • No SSD payable

Between 30 August 2010 and 13 January 2011 (inclusive)

• Within 1 year:
  • 1% on the first S$180,000.
  • 2% on the next S$180,000.
  • 3% on the remainder.
• More than 1 year and up to 2 years:
  • 0.67% on the first S$180,000.
  • 1.33% on the next S$180,000.
  • 2% on the remainder
• More than 2 years and up to 3 years:
  • 0.33% on the first S$180,000.
  • 0.67% on the next S$180,000.
  • 1% on the remainder.
• More than 3 years:
  • No SSD payable

On or after 14 January 2011

• Within 1 year:
  • 16%
• More than 1 year and up to 2 years:
  • 12%
• More than 2 years and up to 3 years:
  • 8%
• More than 3 years and up to 4 years:
  • 4%
• More than 4 years:
  • No SSD payable

On 11 January 2013, the Government announced that SSD will be imposed on industrial properties, which are bought or acquired on and after 12 January 2013 and sold or disposed of within 3 years. The SSD rates in these cases are as follows:

• Within 1 year:
  • 15% of the market value or price (whichever is higher)
• Within 2 years:
  • 10% of the market value or price (whichever is higher)
• Within 3 years:
  • 5% of the market value or price (whichever is higher)

For industrial properties acquired prior to 12 January 2013 no SSD will be levied.

There are various exemptions/reliefs that may be available in certain scenarios.

The SSD is generally payable within 14 days of signing the sales agreement or when it is executed overseas, SSD must be paid within 30 days of the receipt of the Contract or Agreement in Singapore.

Penalties of up to 400% may be imposed if under-reporting is discovered.

1.4 Endowment tax

There is no endowment tax in Singapore.

1.5 Transfer duty

There is no transfer duty in Singapore.

1.6 Net wealth tax

There is no net wealth tax in Singapore.

1.7 Estate income

The assets left behind by the deceased may continue to produce income after their death. Income derived during the period from one day after death until the end of the administration period (for deaths on or after 15 February 2008, the period of administration is taken as one day after the date of death to 31 December of the year in which the Grant of Representation is issued by the courts) is termed estate income.

When an estate is no longer under administration and there are more investments and assets left in the estate, these will be held in trust for the beneficiaries. Income derived from assets belonging to the trust is covered in Section 7.

Examples of estate and trust income are:

• Rental income.
• Interest income.
• Share of profit from partnership (tax at trustee level is final).
• Profit from sole-proprietorship business (tax at trustee level is final).
• Dividends from shares declared after death (excluding exempt or one-tier dividends).
• Director’s fee and non-contractual bonuses declared after death.
• Income distributions from unit trusts and real estate investment trusts (REITs).
• Gains from share options exercised after death.
• Royalties.
• Other gains or profits of an income nature.

For joint bank accounts, upon the death of a joint account holder, the balance in the account will go to the surviving joint account holder(s), as the account lapses to the survivor(s). In this case, any interest income earned after the date of death is not the income of the estate and hence shall not be taxable under this provision.

In the case of properties held under joint tenancy, the surviving owner is required to declare the full share of income for the period after the death of the first owner from such properties in their personal income tax returns. For properties held under tenancy-in-common, the deceased’s share of income should be declared in the estate’s return.

The Income Tax Act 2007 enables beneficiaries, who are residents of Singapore and entitled to trust income, to be accorded the concessions, exemptions and foreign tax credits as if the beneficiaries had received the trust income directly. In other words, it is deemed to have retained the nature of the underlying trust income. No tax will be imposed at the trustee level, except in the case of income from a trade or business, in which case it is subject to a final tax at the trustee level and distributions are then considered nontaxable capital.