Transfer of Assets between Associated Entities

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 are companies, limited liability partnerships (LLP), statutory bodies and registered business trust (RBT)

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 are companies, limited liability partnerships (LLP), 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 ≥ 75% voting share capital and > 50% voting rights in the other entity or
  • when ≥ 75% voting share capital and > 50% voting rights in both of these entities are held by a common holding entity.

Relevant provisions and conditions are:
a. Section 15(1)(b) of the Stamp Duties Act
b. Stamp Duties (Relief from Stamp Duty upon Transfer of Assets between Associated Permitted Entities) Rules 2014

Conditions for the Relief

With effect from 11 Mar 2017, Stamp Duty Relief will not be granted on transfers involving residential Property-Holding Entities where Additional Conveyance Duties is applicable under section 23 of the Stamp Duties Act.

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, it may be associated with its immediate holding entity for less than 12 months but can still qualify. 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. one entity is 100% owned, directly or indirectly, by the other), 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) in 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

a.    For an instrument that is executed in Singapore, the claim is made within 14 days of the execution

b.    For an instrument that is executed overseas, the claim is made within 30 days of the execution

c.    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.

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:

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

S15(1)(b) Scenario A_v2

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

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 

    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 is 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

    How to Apply

    To apply for relief, submit an application with the supporting documents within the stipulated time frame to:

    Commissioner of Stamp Duties
    55 Newton Road
    Revenue House
    Singapore 307987

    List of Supporting Documents and Information Required

    1. Copy of the Sale and Purchase Agreement and Transfer documents for which relief is sought
    2. Copy of the latest audited statement of accounts of the Transferor, the Transferee and the target entity
    3. Applicant's opinion on the value of the property or net asset value of the shares
    4. Graphical presentation of the structure of the entities in the group  immediately before and after the disposal/ acquisition of the assets
    5. Business profiles of the Transferor, the Transferee and the associated intermediary entities from the Accounting and Corporate Regulatory Authority (ACRA) or the equivalent.
    6. Copy of the share registers of the Transferor, the Transferee and the associated intermediary entities
    7. 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
    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 NEW!
      • 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

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