Q. I HAVE inherited $15 million, and the money is currently deposited in a British bank.
I am the beneficiary of funds from a deceased friend, who was from Mexico. If I transfer the money from Britain to Singapore, am I subject to an estate duty or a tax that is payable?
A. AS A rule, an inheritance is in the nature of a capital, so transferring it to Singapore should not attract an income tax.
A Singapore citizen will generally be domiciled in Singapore, and even more likely so if he was born here.
If Singapore is your domicile, your assets here and abroad - apart from immovable properties overseas, which are not subject to Singapore law - are liable to an estate duty here when you pass on.
The first $600,000 worth of movable properties and the first $9 million worth of residential properties are exempt from an estate duty.
Beyond these thresholds, however, the duty is 5 per cent on anything up to $12 million and then 10 per cent in excess of that amount.
Allowing for an exemption on the first $600,000, the duty on $15 million in cash - assets in movable form - will be $840,000.
It may be that $15 million is more than you can use in your lifetime, in which case you may wish to consider planning your estate.
Since the law exempts from duty up to $9 million worth of Singapore residential property, there will be less duty on your estate if you invest some of the funds in a residential property in Singapore.
As well, funds that you 'settle' in a trust, so that you personally no longer benefit from them, are not dutiable after five years.
A Singapore permanent resident or, more generally, a person with a right and an evident intention to return to a home country, may not be domiciled in Singapore.
If you happen not to have Singapore as your domicile, then there will be no duty on your estate - at least in this country - save for any immovable property in Singapore, which is subject to Singapore law regardless of your domicile.
In that case, there is no limit to the cash or other movables your beneficiaries can inherit from you free of Singapore estate duty.
Finally, it is worth noting that an estate duty has become a very minor part of revenue for many economies.
There is also no longer any estate duty in Hong Kong and Malaysia. It is possible that Singapore will follow.
Advice provided By
KhattarWong
Leon Kwong Wing Co-Head, Tax Department
Harleen Kaur Associate, Tax DepartmentAdvice provided in this column is not meant as a substitute for comprehensive professional advice. E-mail questions to lorna@sph.com.sg
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