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Acquisition of equity interests in the PHE
Additional Conveyance Duties for Buyers (“ACDB”) will apply on qualifying acquisitions of equity interests in the PHE (“Target”) based on the market value of the underlying residential property. This is in addition to existing stamp duty on shares.
(NEW!) For ACDB purposes, where the equity interest in the PHE is held on trust such that the beneficial owner of the equity interest in the trust is not identifiable (i.e. a non-bare trust beneficiary), the beneficial owner of the equity interest in the trust is deemed to be the trustee.
ACDB is also payable on qualifying acquisitions where the trustee distributes the equity interest to a beneficiary of the trust, who did not have beneficial ownership of the equity interest as at the time of the declaration of trust or when equity interest is transferred into a trust.
1% x U/V x W1 x X
+
1% x U/V x W2
2% x U/V x W1 x X
+
2% x U/V x W2
3% x U/V x W1 x X
+
3% x U/V x W2
4% x U/V x W1 x X
+
4% x U/V x W2
Z%^ x U/V x W1 x X
+
Z%^ x U/V x W2
^Z% is: –
Note: The above table is a simplified version. For the full version and the terms used, please refer to IRAS e-Tax Guide on Stamp Duty: Additional Conveyance Duties (ACD) On Residential Property-Holding Entities (PDF, 755KB).
Note: We are in the process of updating the e-Tax Guide to include the ACD treatment for trusts. The revised e-Tax Guide will be uploaded by mid-2022.
On 20 Mar 2017, Mr and Mrs T acquire 30% and 40% equity interest in Company A that directly owns a prescribed immovable property valued at $8M. Company A’s total tangible assets is $10M.
STEP 1: Determine if the target is a PHE
Asset percentage = $8M/$10M = 80%
Company A is a Type 1 PHE as 80% of its total tangible assets is prescribed immovable property.
STEP 2: Determine the grantees’ associates
Mr and Mrs T are associated as they are husband and wife.
STEP 3: Determine if the 50% significant ownership is met
Mr and Mrs T’s equity interest acquired will be added together as they are associated and together, they are significant owners since 30% + 40% cross the 50% significant ownership threshold.
STEP 4: Compute the ACDB payable
Assuming that the prescribed immovable property is a part of an entire building used for residential purposes and the value of it is $8M,
More examples with scenarios involving non-bare trust beneficiaries will be updated in mid-2022.
Note: We are in the process of updating the e-Tax Guide to include the ACD treatment for trusts. The revised e-Tax Guide will be uploaded by mid-2022.
© 2022, Government of Singapore
Last updated on 30 June 2022