Buying or Acquiring Shares

Stamp Duty is charged on the document signed when you buy or acquire shares. The duty is payable on the actual price or value of the shares, whichever is higher. 

Manner of Acquisitions

Shares may be acquired in the following manner:

  1. By way of purchase
  2. By way of gift including a voluntary declaration of trust and settlement

    Declaration of Trust / Trust Deed 

    A fixed duty of $10 is payable on the Declaration of Trust / Trust Deed which does not result in a change in beneficial interest in the shares.

    Where there is a change in beneficial interest in the shares, full stamp duty will be payable on the Declaration of Trust / Trust Deed.

  3. By way of distribution as a dividend in specie by a company
  4. By way of distribution in specie upon the winding up of a company
  5. By way of distribution from the estate of a deceased that is not in accordance to Will, Intestate Succession Act or Muslim Law of Inheritance

Determining Value of Shares

1. Shares Listed on the Stock Exchange of Singapore

The value of the shares transferred is taken to be the average price on the Stock Exchange of Singapore as at the date of the document. 

When there is no available average price as at the date of the document, the latest average price of the shares can be used.

2. Shares in Private Companies

The value of the shares transferred is taken to be the net asset value (NAV) or the allotment price of the shares in the target company. Please refer to Example 1 on how to compute the NAV.

Where there are different classes of shares (e.g.: preference shares in the target company), the NAV will depend on the rights attached to the respective class of share. Please refer to Example 2 on how to compute the NAV.

a.     Where the company has been incorporated for more than 18 months

For Stamp Duty purposes, the value of the shares transferred is the NAV of the target company. The NAV is computed based on the latest statement of accounts of the target company which should not be more than 24 months from the date of transfer.

Where the target company owns any property, the market value of the property as at the date of document should be used in place of the book value if the book value is not reflective of the market value.   

b.    Where the company has been incorporated for 18 months or less

For Stamp Duty purposes, the value of the shares transferred is the allotment price if the target company does not own any property.

Where the target company owns any property, the management accounts have to be prepared to determine the NAV of the shares.

The statement of accounts or management accounts should: 
a. Reflect the market value of the property as at the date of document for the share transfer
b. Be certified by the director or secretary of the company

 

Rates and Computation

 Stamp Duty for Transfer of Shares 0.2% of the purchase price or the value of the shares

 

Total Assets : $850,000

Total Liabilities: $300,000

Share Capital : 100,000 ordinary shares of $1 each fully paid

Number of shares transferred : 5,000 ordinary shares

Total Net Asset Value (NAV)Total Assets - Total Liabilities
= $850,000 - $300,000
= $550,000
NAV per share$550,000 / 100,000
= $5.50
Stamp Duty0.2% x NAV for the total share transferred
= 0.2% x ($5.50 x 5,000)
= 0.2% x $27,500
= $55

 

Total Assets : $900,000

Total Liabilities : $300,000

Share Capital : 100,000 ordinary shares of $1 each fully paid and 200,000 preference shares of $1 each fully paid

Number of shares transferred : 5,000 ordinary shares and 5,000 preference shares

Rights attached to the shares : Preference shares have priority to the return of capital over ordinary shares but with no rights to participation of surplus assets

Notes:
a. The net asset value is first used to pay off the preference shares
b. Any surplus is distributed to the ordinary shares

Total Net Asset Value (NAV)Total Assets - Total Liabilities
= $900,000 - $300,000
= $600,000
NAV per preference shareCapitalSurplus asset
Return of capital to preference shares / Number of preference shares
= $200,000 / 200,000
= $1
No rights to surplus asset
NAV per ordinary shareCapitalSurplus asset
Return of capital to ordinary shares / Number of ordinary shares
= $100,000 / 100,000
= $1

Balance of NAV after return of capital to preference and ordinary shares
= Total NAV - Return of capital to 
   preference and ordinary share
= $600,000 - ($200,000 + $100,000)
= $300,000

Distribution of surplus asset (per share)
= $300,000 / 100,000
= $3

NAV per ordinary share
= $1 + $3
= $4
Stamp Duty0.2% x NAV for the total share transferred
= 0.2% x [($1x 5,000) + ($4 x 5,000)]
= 0.2% x ($5,000+ $20,000)
= 0.2% x $25,000
= $50

 

For rates before 22 Feb 2014, click here

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