Currently, estate duty is structured in two tiers: the first $10 million value of estate chargeable to duty is taxed at 5 per cent and all subsequent amounts at 10 per cent. Exemption is given to the first $3 million of all residential properties and the first $500,000 of all movable assets, including CPF balances. CPF balances in excess of $500,000 are also exempt.

To allow for the effects of inflation and rising asset prices over the years, the Government has decided that the $10 million threshold below which the first tier rate of 5 per cent will apply will be raised to $12 million. The exemption limits for residential properties and movable assets, including CPF balances, will also be raised to $9 million and $600,000 respectively. CPF balances in excess of $600,000 will continue to be exempt. This tax change will take immediate effect.