On or about 10 Mar 2021, the Inland Revenue Authority of Singapore (IRAS) has published the third edition of the e-Tax Guide on Income Tax Treatment of a Trust registered under the Business Trusts Act. It replaces the second edition published on 8 Jan 2019.
This e-Tax Guide provides details on the income tax treatment of a trust which is registered under the Business Trusts Act and is applicable to trustee-managers or unit-holders of a registered business trust.
A trust registered under the Business Trusts Act (“registered business trust”) will be treated like a company for income tax purposes and is taxable at the trustee level. It is a final tax and the unit-holders of the registered business trust will not be taxed on their entitlement of trust income.
This guide sets out how certain corporate tax features are to be applied to a registered business trust:
- group relief;
- application of “shareholding test”;
- election of section 24 for the sale of property;
- mergers and acquisitions scheme; and(e)gains on disposal of shares.
In this third edition, the following revisions were made:
(i) Updated paragraphs 3.8 and 8.1 of the guide to reflect tax changes announced in Budget 2020 on the extension of the M&A scheme to 31 December 2025 and the lapse of stamp duty relief for instruments executed on or after 1 April 2020 ; and
(ii) Inserted footnote 5 in paragraph 9.1 of the guide for clarity .
Source: IRAS, 13 Mar 2021