Estate duty keeps tax system progressive13 Dec 2005
I refer to the article by Dr Sylvia Goh Tshin En, ''Time to put an end to estate duty'' (ST, 6 December 2005), suggesting that the Government abolish estate duty.
2. Estate duty helps to maintain progressivity in our tax system. Only the very wealthy pay estate duty in Singapore. It is payable by just 3% of the 16,000 deaths each year. This is because our estate duty exemption limits are among the highest in the world, with a cumulative exemption limit of $9m for residential properties and a cumulative exemption limit of $600,000 for all other items.
3. Dr Goh has highlighted the issue of assets being frozen on the date of death and the documentation procedures involved in paying estate duty. The Ministry of Finance understands the burden that is placed on those who have to pay estate duty and would like to assure Dr Goh that estate duty procedures are continually reviewed to ensure that these are not unnecessarily complicated. For instance, we have simplified the probate processes. From 1 March 2003, the executor/administrator of most non-dutiable estates can file direct to the Subordinate Courts to distribute the deceased's assets, without the need for clearance from the Inland Revenue Authority of Singapore (IRAS). This has significantly shortened the time taken for resolving most non-dutiable estates, which form the bulk of estate duty cases.
4. We have also revised the interest rate structure to give more time for the filing and payment of estate duty. From 1 January 2005, we have introduced a 6-month zero-interest period from the date of death for filing and a 30-day grace period from the issue of the Notice of Assessment for payment.
HAN KOK JUAN
DIRECTOR (SOCIAL & SECURITY PROGRAMMES)
MINISTRY OF FINANCE