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When Estate Duty was a Consideration in Singapore

This article was originally posted on 14 October 2007.

Back then, if a Singapore Citizen who passed away in Singapore, your money in your estate is subjected to estate duty.

Estate duty is a tax on the total market value of a person’s assets (cash and non-cash) at the date of his or her death. It does not matter if the person has a will or not, the assets are still subject to estate duty.

Estate Duty has been removed for deaths on and after 15 Feb 2008.

This saved financial planners here some complexity, which also lessens the value of financial planners in Singapore.

I chanced upon this question and answer in the Sunday Times 12.5 years ago. If you do not know what is the big deal of estate tax, this article should give you some idea.

I can appreciate as a person with at least some net wealth, there will be an anxiousness about how I should think about estate duty. Singaporeans do not have to worry about this now.

Would the government restored estate duty? I am not sure how effective it is versus income tax and goods & services taxes.

The Question: Are there Estate Duty Payable on Funds from Mexican Deceased?

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?

The Answer

As a rule, an inheritance is in the nature of a capital, so transferring it to Singapore should not attract any 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.

  1. The First $600,000 worth of movable properties are exempt from estate duty
  2. The first $9 million worth of residential properties are exempt from estate duty

Beyond these thresholds, however, the duty is 5 percent on anything up to $12 million and then 10 percent 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.

Funds that you “settle” in a trust, so that you personally no longer benefit from them, are not dutiable after 5 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 to not have Singapore 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.

Taken from ST Sunday.

The advice provided in this column is not meant as a substitute for comprehensive professional advice.


I tested myself by trying to answer this question without looking at the answer and my answer would be the gift from the reader’s deceased friend should be net of any Mexican inheritance / estate taxes (if there is any).

Thus this clarification answer was meant more to educate on who will be taxable in the Singapore context.

The 5% and 10% estate duty is much milder versus the 40% inheritance/estate taxes in the United States and UK. The minimum quantum for property is also pretty high.

You can see the big advantage if you invest in properties versus if you invest in equities.

The possible solutions to address the estate duty may also be more manageable. Assume you have $2 mil in equities, that means $1.4 mil is subjected to 5% tax. This comes up to $70,000 in potential estate duty.

You can purchase a term life insurance that covers $100,000 so that you do not lose so much. The premiums can range from $65 a year to $160 a year depending on your age. Very manageable solution before age of 65.

I invested in a diversified portfolio of exchange-traded funds (ETF) and stocks listed in the US, Hong Kong and London.

My preferred broker to trade and custodize my investments is Interactive Brokers. Interactive Brokers allow you to trade in the US, UK, Europe, Singapore, Hong Kong and many other markets. Options as well. There are no minimum monthly charges, very low forex fees for currency exchange, very low commissions for various markets.

To find out more visit Interactive Brokers today.

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