Additional buyer's stamp duty of 35% to apply on any transfer of residential property into living trust from May 9

SINGAPORE — Additional buyer’s stamp duty (ABSD) of 35 per cent now will apply on any transfer of residential property into a living trust occurring on or after May 9, the Ministry of Finance (MOF) announced on Sunday (May 8). 

ABSD will be payable even if there is no identifiable beneficial owner at the time the residential property is transferred into a trust, MOF said in a media release late on Sunday. 

An identifiable beneficial owner of a trust residential property refers to a person identified in the trust deed or document as a beneficiary of the residential property and who, because of the trust, has beneficial ownership of the residential property that is not, under the terms of the trust, revocable, variable, or subject to any condition subsequent.

Currently, buyer’s stamp duty (BSD) is payable when a residential property is transferred into a living trust. 

ABSD may also be payable, depending on the profile of the beneficial owners of the residential property transferred into the trust. 

"Where the living trust is structured such that there is no identifiable beneficial owner at the time when the residential property is transferred into the trust, ABSD currently does not apply," said MOF. 

"Arising from its periodic policy review, the Government will introduce ABSD (Trust) at 35 per cent, to address and close this gap," it added. 

As ABSD aims to promote a "stable and sustainable residential property market", it should apply to transfers of residential properties into all living trusts, the ministry said. 

This is regardless of whether there are identifiable beneficial owners of the residential properties transferred into such trusts, it added. 

ABSD (Trust) is to be payable upfront, when the residential property is transferred into any living trust.

As a concession, a trustee may apply to the Inland Revenue Authority of Singapore (Iras) for a refund of ABSD (Trust), provided that all beneficial owners of the residential property are identifiable individuals and that beneficial ownership of the residential property has vested in all of these beneficial owners at the time of property transfer into the trust.

In addition, the beneficial ownership cannot be varied or revoked, or be subject to any condition subsequent, under the terms of the trust, said MOF.

The refund amount will be based on the difference between the ABSD (Trust) rate of 35 per cent and the ABSD rate corresponding to the profile of the beneficial owner with the highest applicable ABSD rate, said the ministry. 

"The application for the refund must be made to Iras within six months after the instrument is executed," it said, adding that more information is available on the Iras website. CNA