Singapore imposes 35% ABSD on residential property transferred into a living trust

Announced

8 May 2022

Effective

9 May 2022

Issuing authority

Ministry of Finance, Inland Revenue Authority of Singapore

Category

Tax policy

Affected market

Any conveyance, assignment or transfer of residential property in Singapore to a trustee of a living trust, including a settlement or a declaration of trust by an existing owner, where the first instrument effecting it is executed on or after 9 May 2022. A living trust is one created by a settlor during his or her lifetime. Trustees for collective investment schemes, trustee-managers of business trusts and trustees for housing developers are outside the new profile and stay under the entity or housing developer rates. Property already held on trust before 9 May 2022 is not reached.

Primary source

Additional Buyer's Stamp Duty (ABSD) For Residential Properties Transferred Into A Living Trust

On Sunday 8 May 2022 Singapore announced Additional Buyer's Stamp Duty (Trust) of 35% on any transfer of residential property into a living trust by an instrument executed on or after 9 May 2022. Until then a transfer into a living trust bore Buyer's Stamp Duty, and ABSD only according to the profile of its beneficial owners, so a trust with no identifiable beneficial owner at the time of transfer paid no ABSD at all. The new duty is payable upfront by the trustee whatever the trust's beneficiaries. A trustee may claim a refund of the difference between 35% and the rate of the highest-rated beneficial owner, but only where every beneficial owner is an identifiable individual whose interest has vested and cannot be varied or revoked, and only on application within six months of execution. The Ministry of Finance described the change as closing a gap found in a periodic policy review. No other ABSD rate moved, and the 35% matched the rate already charged on entities.