16 January 2015
On 12 January 2015, the Inland Revenue Authority of Singapore (IRAS) issued a new form for the annual declaration of Designated Unit Trusts (DUT).
Under the DUT scheme, the income specified under section 10(20) and 10(20A) of the Income Tax Act (“specified income”) derived by a DUT is not taxed at the trustee level. When the DUT makes a distribution out of specified income to a unitholder, the distribution is taxed in the hands of the unitholder unless specifically exempted.
The trustee of a unit trust (new and existing) intending to claim in any year of assessment the DUT tax benefit must complete and submit the following annual declaration form, together with the relevant tax return (Form UT) of the unit trust for that year of assessment.
There are two types of forms for the annual declaration, i.e.:
1. Form A, for:
- a unit trust other than a unit trust included under CPF Investment Scheme (CPFIS), or
- a unit trust that is included under the CPFIS for only a part of the relevant basis period.
2 . Form B, for
- a unit trust included under CPFIS for the whole of basis period in 2014 or thereafter, or
- a new unit trust constituted and included under CPFIS on the same day in the relevant basis period.
To claim DUT tax benefit for any year of assessment, the unit trust must fulfil qualifying conditions throughout the basis period for that year of assessment unless otherwise indicated.
In the case of an umbrella fund with different sub-funds, an annual declaration form for each sub-fund claiming the DUT tax benefit will need to be submitted.
For further details, please refer to the IRAS website.