Estate duty exemptions are generous: MOF06 Oct 2005
I refer to the letters by Quek Soo Beng, "Review $600,000 limit for exemption from estate duty" (BT, Aug 9) and Sunder R Daswani, ''Don't limit estate duty exemption to homes'' (BT, Aug 11). Mr Quek suggested that the government increase the $600,000 exemption limit for all non-residential property assets as he feels that the current limit is inadequate, while Mr Daswani asked for industrial and commercial properties to be included in the $9 million exemption limit for residential properties.
There is a separate exemption for residential properties to avoid causing undue hardship to family members of the deceased who may otherwise be forced to sell off their family homes to meet estate duty obligations. There is no reason to bring industrial and commercial properties under such special exemption.
Singapore already has among the lowest rates of estate duty and highest exemption limits in the world. Our rate of 5 per cent for the first $12 million beyond the exemption limits and 10 per cent beyond that compare very favourably with 18-47 per cent in the US, 40 per cent in the UK, and 20 per cent in Ireland, for example. Our exemption limits compare very favourably with exemption limits for total assets in countries such as the UK (S$810,000), Ireland (S$950,000), Japan (S$740,000) and Korea (S$810,000).
Only the top 2-3 per cent of our population pays estate duty, of which 98 per cent had estate value less than $12 million (after exemptions) and were assessed for an average of $51,000 in estate duty in FY2004. This is significantly less than the $120,000 Mr Quek had estimated. Of the 83 per cent whose estate value was less than $2 million (after deducting exemptions), the average assessment was $26,000.
HAN KOK JUAN
DIRECTOR (SOCIAL & SECURITY PROGRAMMES)
MINISTRY OF FINANCE