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In the 1995 Budget, I introduced
a tax incentive to promote the domestic unit trust
industry. Under this incentive, income except
Singapore dividends received by a designated unit
trust would be taxed at the time of distribution
instead of at the time when the income was received
by the trustee. The trustees are however required
to withhold tax on the taxable distributions.
The incentive also granted a concession to resident
individual unit holders who were taxed only on
10 per cent of the distributions made out of gains
from the disposal of securities.
To make investments in unit trusts
more attractive to resident individuals, I have
decided to remove the tax imposed on resident
individual unit holders for 10 per cent of the
distributions paid out of gains from the disposal
of securities.
Further, to simplify the management
of unit trusts, I have also decided to remove
the withholding requirement on taxable distributions
made to unit holders who are tax residents of
Singapore. Unit holders who are tax residents
are however still liable to pay tax on the distributions.
The changes will take effect
from 28 February 1998. |
