The assets left behind by a deceased may continue to produce income after his death. Income derived during the period one day after death till the end of the administration period is termed as estate income.
Trust income may arise from assets held in trust by trustees of:
- Private trusts created by way of Trust Deeds/Settlements
- Trusts created under the Wills of deceased persons
- Intestate estates (In the case where the deceased died without a will)
Examples of estate/trust income are:
- Rental income from property. For expenses, please refer to 'Rental & Net Annual Value expenses'
- Net Annual Value of property occupied free of rent on behalf of the executor/ administrator (removed with effect from Year of Assessment 2010)
- Net Annual Value of property occupied by the executor/administrator in excess of $150,000 (removed with effect from Year of Assessment 2010)
- Interest income from bank/finance company (including deposits with POSB)
- Share of profit from a partnership+
- Profit from a sole-proprietorship business+
- Dividends from shares declared after death (excluding exempt/one-tier dividends)
- Director's fee & non-contractual bonuses declared after death
- Income distributions from Unit Trusts/Real Estate Investment Trusts (REITS)
- Gains from Share Options exercised after death
- Royalties
- Foreign-sourced income remitted into Singapore*
- Other gains or profits of an income nature
+ With effect from Year of Assessment 2008, tax at
trustee level is final.
*Foreign-sourced income remitted during 22 Jan 2009 to 21 Jan 2010
As announced in the 2009 Budget Statement, tax exemption will be granted on all foreign sourced income accrued outside Singapore on or before 21 Jan 2009 and received in Singapore by resident non-individuals and resident partners of partnerships in Singapore during the period 22 Jan 2009 to 21 Jan 2010 (both dates inclusive).
For the purpose of the tax exemption on foreign-sourced income remitted to Singapore during the said period, the "subject to tax" and 'foreign headline tax rate" conditions specified in Section 13(9) of the Income Tax Act will be temporarily lifted.
All expenses incurred in respect of the foreign-sourced income received in Singapore which qualifies for tax exemption shall be deducted against those foreign-sourced income, and will not be available for deduction against any other taxable income.
For details, please refer to the e-Tax guide, Temporary Liberalisation of Income Tax Exemption for Foreign-Sourced Income Received in Singapore From 22 Jan 2009 to 21 Jan 2010 (93KB).
How to claim for tax exemption
You are required to make a declaration in your tax returns by giving the nature and amount of the foreign-sourced income that was remitted to Singapore. You are also required to complete the Declaration Form For Foreign-Sourced Income Received in Singapore From 22 Jan 2009 to 21 Jan 2010 (45KB) for submission to IRAS.
Joint bank accounts
For joint bank accounts, upon the death of a joint account holder, the balance in the account will go to the surviving joint account holder(s) as the account has lapsed to the survivor(s). In this case, any interest income earned after the date of death is not the income of the estate.
Properties held in joint names
In the case of properties held under joint-tenancy, the surviving owner is required to declare the full share of income for the period after the death of the first owner from such properties in his personal income tax returns. For properties held under tenancy-in-common, please declare the deceased's share of income in the estate's returns.