1) What is the Duty that I need to pay as a Buyer of Property-Holding Entities (PHEs)?

In addition to existing stamp duty on shares, the Additional Conveyance Duties for Buyers (ACDB) will apply on qualifying acquisition of equity interests in the PHE (“Target”) based on the market value of the underlying residential property.

Additional Conveyance Duties for Buyers (ACDB) Rates

      (A) If the Target is a Type 1 PHE   

 

Market value of the underlying residential property own by the Target 
 
ACDB is the sum of (i) & (ii)
 Before 20 Feb 2018On or after 20 Feb 2018 
(i)  On first $180,000On first $180,0001% x U/V x W
     On next $180,000On next $180,0002% x U/V x W
     Exceeding $360,000On next $640,0003% x U/V x W
  Exceeding $1,000,0004% x U/V x W
       
(ii)   15% on the entire value15% x U/V x W
     
   (B) If the Target is a Type 2 PHE      

 

 Market value of the underlying residential property own by the Target ACDB is the sum of (i) & (ii)  
 Before 20 Feb 2017On or after 20 Feb 2018 
(i)  On first $180,000On first $180,000

1% x U/V x W1 x X

+

1% x U/V x W2 (if target owns PIP directly)

     On next $180,000On next $180,000

2% x U/V x W1 x X

+

2% x U/V x W2 (if target owns PIP directly)

 Exceeding $360,000On next $640,000

3% x U/V x W1 x X

+

3% x U/V x W2 (if target owns PIP directly)

  Exceeding $1,000,0004% x U/V x W1 x X

+

4% x U/V x W2 (if target owns PIP directly)

       
(ii)   15% on the entire value  

15% x U/V x W1 x X

+

15% x U/V x W2 (if target owns PIP directly)

 

    Note: The above table is a simplified version. For the full version and the terms used, please refer to IRAS e-Tax Guide on Stamp Duty: Additional Conveyance Duties (ACD) On Residential Property-Holding Entities.

     

    2) How does ACDB work?

    Example on ACDB

    On 20 Mar 2017, Mr and Mrs Tan acquire 30% and 40% equity interest in Company A that directly owns a prescribed immovable property valued at $8M. Company A’s total tangible assets is $10M.

    STEP 1: Determine if the target is a PHE

    Asset percentage = $8M/$10M = 80%

     

    Company A is a Type 1 PHE as 80% of its total tangible assets is prescribed immovable property.

    STEP 2: Determine the buyers’ associates
    Mr and Mrs Tan are associated as they are husband and wife.

    STEP 3: Determine if the 50% significant ownership is met

    Mr and Mrs Tan’s equity interest acquired will be added together as they are associated and together, they are significant owners since 30% + 40% cross the 50% significant ownership threshold.

    STEP 4: Compute the ACDB payable 

    Assuming that the prescribed immovable property is a part of an entire building used for residential purposes and the value of it is $8M,

    • Mr Tan: ACDB x 30% x $8M
    • Mrs Tan: ACDB x 40% x $8M

    For more information on examples and computation, please refer to IRAS e-Tax Guide on Stamp Duty: Additional Conveyance Duties (ACD) On Residential Property-Holding Entities.

       

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