56-year-old Mdm Ng Chiew Yen (“Ng”) and her son, 26-year-old Tan Kai Wen, Keith (“Tan”) have been sentenced for giving false and misleading information to IRAS during an audit of a two-step “99-to-1” property purchase arrangement. 

This is the first conviction involving taxpayers providing false and misleading information to IRAS during an audit of the two-step “99-to-1” property transactions.

Both Ng and Tan were convicted of two charges each under section 65(2) of the Stamp Duties Act 1929. They also consented to three similar charges being taken into consideration for the purposes of sentencing. These offences are punishable with a maximum sentence of a fine not exceeding $10,000 or to imprisonment for a term not exceeding two years or both. Both Ng and Tan were each sentenced to two weeks’ imprisonment.

Facts of the Case

This case is part of IRAS’ ongoing audit into the two-step “99-to-1” property transactions for possible tax avoidance. Investigations in the subject case revealed that Tan had purchased a residential property in his sole name on 24 Sep 2021. Subsequently, Tan sold a one per cent share of the property to Ng. IRAS commenced an audit into the transactions in 2023.

During the audit, IRAS sought information from Tan via email concerning the transactions. Tan was asked why he did not jointly purchase the property with Ng at the outset. In Tan’s email reply, he falsely stated that:

• He made a hasty decision to purchase the property with the understanding that his family would support him financially. 
• His family was unable to do so subsequently and thus Ng had to be added as a joint owner in order to take a loan.

Tan’s answer was false as the reason they did not purchase the property jointly at the outset was actually to avoid ABSD. Tan and Ng had drafted different versions of the email reply and discussed the drafts before Tan sent the email reply to IRAS.

Subsequently, when IRAS requested Tan to provide the WhatsApp messages between Ng and the banker, Tan provided misleading information to IRAS in the form of WhatsApp messages, which he represented as “[Ng’s] WhatsApp chat correspondence with her banker”. The WhatsApp messages were misleading as the messages were incomplete.

Tan and Ng had gone through the WhatsApp messages with the banker and deleted messages which they felt contradicted their initial falsehoods to IRAS.

For the above, both Tan and Ng were convicted of two charges each for conspiring to provide the misleading information and responses to IRAS. Three other charges were taken into consideration for the purposes of sentencing.

Any person convicted of providing false and misleading information to IRAS under Section 65 (2) of the Stamp Duties Act shall be fined up to $10,000 or jailed for up to two years or both.

Offence Uncovered During IRAS’ Audit

IRAS conducts regular audits on taxpayers for property transactions to detect non-compliance and tax avoidance. The two-step “99-to-1” audit is part of IRAS’ regular audits to uncover arrangements entered into for the purpose of reducing or avoiding stamp duty. Whether a case is deemed to be tax avoidance depends on the facts and circumstances of each case.

The two-step “99-to-1” property purchase arrangements typically involve individuals without any prior property count buying residential properties in their name initially, and within a very short period of time, selling a small share of the property, such as one percent share to another individual who has a higher Additional Buyer’s Stamp Duty (ABSD) profile. By structuring the transaction in this manner, ABSD would be payable only on the one per cent share of the property, rather than on the full value of the property if the purchase was done jointly at the onset.

Should IRAS determine that tax avoidance has occurred, IRAS will recover the rightful amount of stamp duty from the buyers, and may impose a surcharge of 50 per cent of the additional duty payable. There is no statutory time limit for stamp duty audits.

When audited, individuals should cooperate and be upfront with IRAS. Providing false statements or misleading information (e.g. information that has been tampered with) is considered a criminal offence, carrying penalties such as fines and/or imprisonment, if convicted.

Voluntary Disclosure

Purchasers who entered into two-step “99-to-1” property purchase arrangements should voluntarily disclose their arrangements to IRAS. Depending on the circumstances, IRAS is prepared to consider such cases more favorably. Please refer to the IRAS website for more information on voluntary disclosures.

Cash Rewards for Informants

A reward based on 15% of the tax recovered, capped at $100,000, will be given to informants if the information and/or documents provided lead to a recovery of tax that would have otherwise been lost. All payments are at the discretion of the Commissioner. IRAS will ensure that the identities of informants are kept strictly confidential. Those who wish to report malpractices may make their submissions via this form.

Inland Revenue Authority of Singapore