The removal of the fixed duties is not applicable to Declaration of Trust where the beneficial ownership of the chargeable asset does not pass i.e. remains chargeable with stamp duty of $10. For a Declaration of Trust which effects a passing of the beneficial ownership of the chargeable asset, ad valorem stamp duty is payable.
Documents which are no longer liable to fixed or nominal duties are as follows:
- Assignment of lease involving an incoming landlord and outgoing landlord where no consideration is paid.
- Variation of lease or Supplemental Lease for reduction in rent or lease term.
- Transfer of property held by current trustee to a new trustee, where beneficial owner remains the same.
- Transfer of property from trustee to beneficial owners or vice versa where there is no change in the beneficial ownership.
- Transfer of property by way of assent to the beneficiaries in accordance to the Will, Intestate Succession Act or Muslim Law of Inheritance.
- Statement by a personal representative declaring himself to be absolute owner of any land under rule 33 of Land Titles Rules.
- Transfer of property pursuant to universal succession. (e.g., Deed of Merger pursuant to an overseas merger undertaken in conformity with the laws governing the merging entities. Stamp duty is not payable when the shares are transmitted by operation of law and automatically vested in the succeeding entity, where no consideration was paid and no instrument of transfer was executed. Please note that there is no need to submit an application for adjudication for such cases.)
- Deed of Disclaimer, not being a gift of the chargeable asset. (i.e. an instrument whereby a person refuses to accept an interest/entitlement of the asset under a Will or Law of Intestacy or Muslim Law of Inheritance, without nomination of some other person to receive the asset.)
- Deed of Partition or Court Order for original co-owners of an immovable property to receive the same amount of shares in the property after partition i.e. each owner does not receive any excess benefit.
- Surrender of lease where no consideration is paid.
- Duplicate (i.e. another original set of the same instrument).
- Counterpart (i.e. one of the several contracts of which the contents are the same and is signed by each contractual party in different sets of that same contract, particularly if the contractual parties are in different localities).
- Transfer or lease executed in pursuance of a contract or an agreement duly stamped for ad valorem duty.
- Fresh Sale and Purchase Agreement between the developer and sub-purchaser where ad valorem duty has been paid by the sub-purchaser.
- Transfer instrument executed after the decree or Court order (where ad valorem duty has been paid).
- Mortgage instrument executed in pursuance of an agreement duly stamped for ad valorem duty.
- Instrument effecting additional security for the same loan.
- Transfer for share instrument that is executed after a Memorandum of Charge of shares signed under hand.
Why is the $10 fixed duty on Declaration of Trust retained?
Declaration of Trust may operate as a sale or a gift, for which ad valorem duty is payable. As such, by retaining the fixed duty on Declaration of Trust, IRAS can assess if the document is correctly stamped.
When a tenant pays a consideration to his landlord for surrendering the lease on and after 19 Feb 2011, will the surrender of lease attract any duty?
A payment by a tenant to the landlord to persuade the landlord to accept a surrender of a lease will not attract any fixed duty as the surrender of lease is executed on or after 19 Feb 2011.
However, if the surrender of lease is initiated by the landlord and he pays a consideration to the tenant for the surrender, this is treated as an assignment of lease and is chargeable with ad valorem duty under Article 12(a) of the First Schedule.
What is a partition of immovable property with no excess benefits and with excess benefits?
No excess benefits results from a partition of immovable property where the co-owners divide their jointly owned property in severalty and each owner gets a value equals to his original share in the property before partition.
In a situation where after the division, one of the co-owners gets a property in severalty, the value of which is greater than his original share, the difference between the value of the property in severalty which he gets and the value of his original share is the excess benefits.
To illustrate, A and B co-owned a piece of land in equal shares (50% each). The land which is worth say a value of $1,000,000 was divided into 2 separate lots X and Y. The value of lot X say is worth $600,000 and the value of lot Y say is $400,000. A gets lot X and B gets lot Y. As a result of the partition, A gets an excess benefits of $100,000 (value of lot X $600,000 less his original share $500,000). $100,000 is the excess benefits. Ad valorem duty will be payable based on the value of $100,000 or consideration paid by A to B (if any), whichever is greater.