Beneficiaries must declare their share of income in their individual income tax returns as estate/trust income. As an administrator or trustee of an estate, you must notify all beneficiaries of this requirement.
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Beneficiaries are people who are legally entitled to the income/capital of an estate/trust by virtue of a will; trust deed or the Law of Intestacy (i.e., when a person dies without a will).
Share of income declaration requirements
Resident beneficiaries
Beneficiaries who are Singapore tax residents and
- derived estate income distributions by virtue of the will of the deceased or the Law of Intestacy; or
- entitled to a share of trust income by virtue of the trust deed, will of the deceased or the Law of Intestacy
must pay taxes for their share of entitlement of income at their personal income tax rates. They are also given the same tax exemptions and concessions as if they had derived or received income directly.
Resident beneficiaries must declare their share of taxable income in their Individual Income Tax Returns under 'Others' as a charge or estate income.
Resident beneficiaries do not need to declare estate / trust income in their Individual Income Tax Returns, if such income is exempted from tax had it been received by the resident beneficiary directly.
Example: Exempted Income
Where the nature of estate / trust income relates to interest income from deposits with approved banks in Singapore, such interest income is tax exempt had it been derived or received directly by the resident beneficiary whom is an individual. The estate / trust income relating to such interest income need not be reported in the resident beneficiary’s Individual Income Tax Return.
Capital receipts (such as sale proceeds from properties/shares, insurance monies) are not taxable. Please do not declare such receipts.
Non-resident beneficiaries
For non-resident beneficiaries, the tax on their share of entitlement or distribution of income is assessed and paid at the estate / trustee level. No further action is required by non-resident beneficiaries.
Administrators/trustees are required to pay the taxes assessed on the non-resident beneficiaries’ shares of entitlement at the prevailing trustee rate for that year of assessment. They should ensure that income tax is paid within 1 month from the date of the Notice of Assessment (NOA)1.
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1 As the NOA will be issued in subsequent years (i.e. in the years following the year in which the income is earned), administrators/trustees are required to ensure that there are sufficient funds retained to pay the taxes when they are due.