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
Resident beneficiaries must declare their share of taxable income in their Individual Income Tax Returns under 'Others' as a charge or estate income.
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.