IRAS issues guide to “Income Tax Treatment of Trusts (2nd Edition)”

8 January 2012

IRAS has, on 5 January 2012, issued a second edition of the e-Tax guide, “Income tax treatment of trusts”. First published in November 2006, the guide explains the provisions relating to trusts, as well as the income tax treatment of trusts as provided in the Income Tax (Amendment) Act 2007.

The revised edition of the Guide has been updated to changes contained in the Income Tax (Amendment) Act 2007. The changes are:

  • Beneficiaries, who are residents of Singapore and entitled  to the trust income, are accorded concessions, exemptions and foreign tax credits as if the beneficiaries had received the trust income directly (sections 13T, 43X and 50B)
  • Income from a trade or business carried on by the trustees is subject to a final tax at the trustee level (sections (43(2A)(c) and 35(16)(c))
  • Amendments to section 46(1)(b). As a result of the earlier amendments, section 46(1)(b) which is to provide for beneficiaries to claim a credit of the tax imposed at the trustee level where the beneficiaries are taxable on the distribution, has become redundant.

More details on the e-Tax Guide can be found here.

Source: This article was extracted from the Inland Revenue Authority of Singapore (IRAS) website.