Non-Resident Beneficiary
If you are a non-resident beneficiary of an estate, tax on your share of income distribution will be paid by the personal representative of the estate.
Resident Beneficiary
When the personal representative of an estate distributes income from an estate under administration, the source of the income has changed. In the hands of the beneficiary it is a distribution of estate income. Therefore, tax exemptions applicable to individuals do not apply to income derived from estates that are still under administration.
Income distribution from an estate is taxable on the beneficiary in the year he/she receives it and not the year the income is accrued to the personal representative.
Example
Year of Assessment 2010
Estate income in 2009 |
$ 5,000 |
Less distribution in 2010 |
$ 4,000* |
Chargeable income |
$ 1,000 |
Tax on executor : $ 1,000 at 17% |
$ 170.00 |
The beneficiary will be assessed on the income distributed to and received by him/her ($ 4,000*) at his/her personal tax rate in the Year of Assessment 2011 since he/she received it in 2010.
How to declare
If you are in receipt of taxable estate income, you are required to declare the amount in your personal income tax returns under 'Others' as a charge. Generally, capital receipts (such as sale proceeds from properties/shares, insurance monies) are not taxable. Please do not declare such receipts.
FAQs
Q1. I am assessed on income from an estate but I have not received any money from the trustee. What should I do?
Either the trustee or the beneficiary has to pay tax on the trust income. The income of a trust is assessable on the trustee. However, a Singapore resident beneficiary who is entitled to a share of the trust income may be charged at his personal income tax rate instead of at the trustee rate. Please refer to the trustee regarding distribution of your share of income.
Q2. Is a beneficiary who is a minor required to pay tax on his share of entitlement?
All resident beneficiaries (including minors) who are entitled to income from an estate/trust in their own right will have to pay tax if the executor/trustee has not been taxed on the same income.
For a minor taxpayer, the income tax returns and notices of assessment will be issued in the name of the guardian.