Second Reading Speech By Mrs Lim Hwee Hua, Minister of State for Finance, on Estate Duty (Amendment) Bill 2004, at The Parliament, 17 Nov 200419 Nov 2004
1. Mr Speaker, Sir, I beg to move, "That the Bill be now read a second time."
New Interest Rate Regime
2. In the Budget Statement this year, it was announced that the estate duty processes would be streamlined. Specifically, this amendment seeks to provide a reasonable amount of flexibility. Currently, interest is charged on unpaid estate duty from the date of death. Clause 5 amends Section 36 so that for deaths occurring from 1 January 2005, the first 6 months after death will be interest-free. This gives administrators and executors 6 months to file a complete estate duty return before interest is charged.
3. It also provides for a grace period of 30 days after the Notice of Assessment has been issued, after which there will be a penalty for late payment. The changes ensure that those who file and make payment promptly are not unduly penalized. Due to the changes in how interest will be charged, Clauses 4, 6 to 9 make consequential amendments to Sections 31, 38, and 45 to 47 respectively.
Increase in Deduction for Funeral Expenses
4. Sir, the next amendment in Clause 3 to section 27 increases the maximum deduction for funeral expenses from "$1,000 or 5% of the ascertained value of the estate, whichever is smaller", to a flat "$6,000". This amendment will take effect for deaths occurring after 1 January 2005. The change takes into account the increase in funeral expenses over the years.
5. Sir, I now briefly outline 2 other amendments to the Act. Clause 2 amends section 14(7) to reflect that the Technopreneur Home Office Scheme has been replaced by the Home Office Scheme under the Urban Redevelopment Authority or the Housing and Development Board. Clause 10 amends Section 58 so that notices issued under the Act can bear the name of the officer authorized by the Commissioner of Estate Duties under Section 4(4).
6. Sir, I beg to move.