Trust structures have long been used in Singapore for estate planning, wealth management, and safeguarding assets for beneficiaries. However, recent changes to Stamp Duty rules on properties held in trust have altered the financial and compliance landscape. If you are a trustee, settlor, or beneficiary, these updates are crucial to understand to avoid unexpected tax costs.
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📌 1. Understanding Stamp Duties for Properties in Trust
In Singapore, property transfers attract various stamp duties such as Buyer’s Stamp Duty (BSD), Additional Buyer’s Stamp Duty (ABSD), and in some cases, Seller’s Stamp Duty (SSD). When a property is acquired through a trust, stamp duty rules apply differently compared to personal ownership.
💡 2. What Changed Recently?
As of recent legislative updates by the Inland Revenue Authority of Singapore (IRAS):
- ABSD on Trusts: Trustees acquiring residential properties must pay ABSD (Trust) at a flat rate of 65% on the property’s value, unless they obtain an exemption or remission.
- ABSD Refund Conditions: Refunds are possible if the trust is structured to meet fixed and irrevocable beneficiary conditions, and the application is submitted within the prescribed timeline (commonly 6 months).
- Additional disclosure requirements for identifying all beneficiaries in the trust deed to qualify for ABSD remission.
📊 3. Types of Stamp Duties Applicable
Buyer’s Stamp Duty (BSD)
Payable on all property purchases in Singapore, including those acquired via trust, calculated on the higher of purchase price or market value.
Additional Buyer’s Stamp Duty (ABSD – Trust)
Introduced to deter property speculation through trusts. High fixed rate applies unless beneficiaries meet specific conditions.
Seller’s Stamp Duty (SSD)
May apply if the trust sells a property within the SSD holding period, calculated based on the selling price or market value.
📝 4. How to Calculate BSD and ABSD (Trust)
For example, if a property valued at S$2 million is purchased through a trust:
- BSD: Calculated using prevailing BSD rate tiers (1% to 6% depending on property value).
- ABSD (Trust): 65% × S$2 million = S$1.3 million (unless remission applies).
⚠️ 5. Key Compliance Requirements
- Stamp duty must be paid within 14 days of executing the trust property transfer (or 30 days if executed overseas).
- Trust deeds must clearly identify beneficiaries for ABSD remission purposes.
- Refund applications must be made promptly with all supporting documents.
🔍 6. Common Scenarios
- Parents buying property in trust for minor children.
- Wealth planning for multi-generational family estates.
- Protecting property from creditors through trust ownership.
📜 7. Exemptions & Remission Possibilities
You may qualify for ABSD remission on a property in trust if:
- The trust is fixed and irrevocable.
- Beneficiaries are identifiable individuals with legal entitlement to the property.
- Application for remission is filed within 6 months from the date of trust property acquisition.
💼 8. Why This Matters for Trustees & Beneficiaries
With the 65% ABSD (Trust) rate, the cost of acquiring property via a trust has risen sharply. Trustees must carefully assess whether the trust structure remains beneficial after factoring in stamp duties and legal compliance.
📍 Final Thoughts
Recent changes to stamp duty rules for properties in trust are aimed at closing loopholes in the property market. While trusts remain a powerful estate planning tool, the financial implications have shifted. Always consult a qualified tax and legal advisor before proceeding with trust-based property acquisitions.
