On 10 March 2017, Parliament passed the Stamp Duties (Amendment) Bill, an urgent bill, introducing a new stamp duty known as the additional conveyance duty (“ACD”) which is payable on every qualifying acquisition and disposal of an equity interest in a residential property-holding entity (“Residential PHE”). ACD is payable in addition to the existing stamp duty that is payable on the transfer of shares (i.e. at 0.2% of consideration or market value, whichever is higher). According to the ministerial statement and press release by the Government, the underlying rationale for the introduction of ACD is to address the stamp duty rate differential between direct acquisition/disposal of residential properties and indirect acquisition/disposal of residential properties via a transfer of the equity interest in a holding entity.
It is critical to note that the Bill also makes certain amendments to section 22 of the Stamp Duties Act (Cap. 312), such that from 11 March 2017, the execution of a sale and purchase agreement for shares (not limited to Residential PHEs) will also be subject to stamp duty, including ACD where applicable. A possible exception is that of a contract or agreement for the transfer of scripless shares, but the position is not entirely clear.
If you have any queries or would like to know more about how these changes may impact you, please contact:
TAN Kay Kheng
Head – Tax Practice
d +65 6416 8102
e kaykheng.tan@wongpartnership.com
Click here to see Kay Kheng’s CV.
TAN Shao Tong
Partner – Tax Practice
d +65 6416 8186
e shaotong.tan@wongpartnership.com
Click here to see Shao Tong’s CV.