In a group of associated entities, property or shares (collectively known as “assets”) may be transferred from the owner (Transferor) to the recipient (Transferee).
Entities eligible for the relief must be the permitted entities defined under the Stamp Duties (Relief from Stamp Duty upon Transfer of Assets between Associated Permitted Entities) Rules. The permitted entities are companies, limited liability partnerships (LLP) where the contributed capital of the partnership is entirely held by permitted entities, statutory bodies and registered business trust (RBT). BSD and SSD reliefs may be granted on the instruments to transfer the assets if certain conditions are met.
Two entities are associated
- when one entity holds, directly or indirectly, ≥ 75% voting capital and > 50% voting power in the other entity or
- when ≥ 75% voting capital and > 50% voting power in both of these entities are held, directly or indirectly, by a common holding entity.
Please note that relief of stamp duty under Section 15 of the Stamp Duties Act does not apply on instruments to transfer the assets between Variable Capital Companies. A request for stamp duty remission will be considered on a case-by-case basis under Section 74 of the Stamp Duties Act.
a. Section 15 of the Stamp Duties Act
b. Stamp Duties (Relief from Stamp Duty upon Transfer of Assets between Associated Permitted Entities) Rules
Conditions for the relief
1. Instrument on the transfer of assets
The instrument is in connection with or for the purpose of transferring the beneficial interest in the assets between the associated entities.
2. Purpose of the transfer
The transfer of the assets is made for a bona fide commercial reason.
3. Required period of association
The Transferor and the Transferee have been associated for at least 12 months prior to the date of the instrument.Exception: If the Transferee was incorporated specially to acquire the asset, the pre-association period between the Transferee and its immediate holding entity can be less than 12 months. However, every other permitted entity that forms the association links between the Transferor and Transferee (other than the Transferee’s immediate holding entity) must still be associated for at least 12 months prior to the date of the instrument. For this relief, a shelf entity purchased to acquire the assets is not considered as an entity incorporated specially for the acquisition and will not qualify.
4. Whether the consideration should be at market or book value
If the Transferor and the Transferee are wholly associated (i.e. where 100% of the voting capital of one entity is held, directly or indirectly, by the other entity, or where 100% of the voting capital of both entities are held, directly or indirectly, by a common holding entity), the consideration for the assets may be at the Transferor's book value. Otherwise, the consideration must be at market value.
5. Settlement of the consideration
The consideration can be settled in cash, shares (for company) or partnership interest (for LLP) by the Transferee. If the Transferor and the Transferee are wholly associated, the consideration may be taken as a debt owing to the Transferor.6. Obligation of the Transferee
The consideration is paid or payable by the Transferee. Where the acquisition of the assets is financed with a loan, the loan is obtained from an associated entity or a financial institution.7. Obligation of the Transferor
The Transferor has to transfer all that it owns in the asset to the Transferee. For example, if the Transferor owns 10,000 shares in a company, it has to transfer all 10,000 shares to the Transferee.8. Stamp Duty obligation has been fulfilled
The Transferor has paid Stamp Duty on the instrument to acquire the assets unless remission or relief has been allowed for that instrument.9. Time frame for relief claim
- For an instrument that is executed in Singapore, the claim is made within 14 days of the execution
- For an instrument that is executed overseas, the claim is made within 30 days of the execution
- Where in-principle approval for the relief was granted before the instrument was executed, the instrument is executed within 4 months from the date of the in-principle approval
10. Time frame for completion
The instrument to transfer the legal interest in the assets is executed within 12 months from the date of the instrument that transfers, conveys or assigns the beneficial interest in the assets.
11. Requirement to remain associated
The Transferor and the Transferee to remain associated for 2 years from the date of the instrument.
Exception: The Transferor and the Transferee to remain associated for a period of 2 years from the date of the instrument, except where the change was due to:
- reconstruction
- amalgamation or
- liquidation, if the following conditions are met:
Conditions
If the Transferor and the Transferee cease to be associated as a result of liquidation, the following conditions must be met for the scenarios below:
A. Liquidation of the Transferor
A1. if the Transferor is a holding entity of the Transferee, the Transferee remains associated with the immediate holding entity of the Transferor for 2 years from the date of the instrument
A2. if the Transferee is the holding entity of the Transferor, the Transferee remains associated with the immediate holding entity of the Transferee for 2 years from the date of the instrument
A3. if the Transferor and the Transferee are associated through a common holding entity, the Transferee remains associated with the immediate holding entity of the Transferor for 2 years from the date of the instrument
(b)-scenario-a.jpg?sfvrsn=fe30ee9e_0 "s15(1)(b) scenario a")
B. Liquidation of the Transferee
B1. if the Transferee is a holding entity of the Transferor, Transferor remains associated with the immediate holding entity of the Transferee for 2 years from the date of the instrument
B2. if the Transferor is the holding entity of the Transferee, the Transferor remains associated with the holding entity of the Transferee for 2 years from the date of the instrument
B3. if the Transferor and the Transferee are associated through a common holding entity, the Transferor remains associated with the immediate holding entity of the Transferee for 2 years from the date of the instrument
(b)-scenario-b_v5.jpg?sfvrsn=a9e24ed9_0 "s15(1)(b) scenario b_v5")
12. Retention of assets
The Transferee to retain the acquired assets for 2 years from the date of the instrument
Conditions
If the Transferee disposes of any transferred assets within 2 years from the date of instrument as a result of liquidation, the following conditions must be met:
- the assets are distributed in specie to the immediate holding entity of the Transferee
- the immediate holding entity of the Transferee retains the assets and remains associated with the Transferor for at least 2 years from the date of the instrument
In the event that- any declaration or evidence furnished was subsequently found to be untrue; or
- conditions (10), (11) or (12) were not met,
the Transferor and the Transferee are required to inform the Commissioner of Stamp Duties within 30 days of the event. BSD and SSD with interest become payable immediately. The interest is computed at 6% per annum accordingly:- For an instrument that is executed in Singapore, the interest is computed from the date of the instrument
- For an instrument that is executed overseas, the interest is computed from the date that the instrument was first received in Singapore
- If duty had been paid prior to the Stamp Duty relief, the interest is computed from the date of refund
- any declaration or evidence furnished was subsequently found to be untrue; or
Link to legislation
Please refer to Stamp Duties (Relief from Stamp Duty upon Transfer of Assets between Associated Permitted Entities) Rules for the relief rules.
How to apply
You can apply for the relief via the e-Stamping Portal > “Request” > “Apply for Section 15 Relief". You will have to login with your SingPass (under Individual or Business user).
Please note that adjudication fees will be payable, irrespective of whether the instrument qualifies for relief under Section 15 of the Stamp Duties Act.
List of supporting documents and information required
- Copy of the Sale and Purchase Agreement and Transfer documents (e.g. Share Transfer form) for which relief is sought.
- Copy of the latest audited statement of accounts and/or latest certified management accounts of the Transferor, the Transferee and the target entity.
- Applicant's opinion on the value of the property or net asset value of the shares.
- Graphical presentation of the group structure which clearly show the relationships among the Transferor, the Transferee and the target entity immediately before and after the disposal/ acquisition of the assets.
- Business profiles of the Transferor, the Transferee, the associated intermediary entities and the target entity from the Accounting and Corporate Regulatory Authority (ACRA) or the equivalent.
- Copy of the share registers of the Transferor, the Transferee and the associated intermediary entities.
- Documentary evidence to substantiate that duty has been paid, remitted or granted relief on the instrument where the assets was previously acquired by the Transferor.
Please refer to the following supporting documents to provide for scenarios where:
Duty has been paid
- Copy of the Certificate of Stamp Duty; or
- Instrument(s) bearing an adhesive or impressed stamp
Relief was granted
- Certificate of Adjudication
8. A written declaration for the application of relief containing the following information:
- The Sale and Purchase Agreement or Transfer documents is not liable to ACD
- How each of the conditions for relief has been/ will be met
- Whether there is any intention of the Transferee to dispose of the assets acquired within 2 years from the date of the instrument
- Whether there is any intention of the Transferor and Transferee to cease to be associated within 2 years from the date of the instrument
- Whether the document to transfer the legal interest in the assets will be executed within a period of 12 months from the date of the instrument