Question

ACC213: Introduction to Income tax

Explain what Stamp duty is under Section 4(1) of the Stamp Duties Act (Cap 312) and examine whether Stamp duty is applicable for the instruments tabulated below. Your assessments must include the reasons or appropriate references to the Stamp Duties Act (Cap 312) in Singapore.

1	A mortgage agreement executed outside Singapore for a residential property in Singapore.
2	A mortgage agreement for a non-residential property in Singapore.
3	A sale and lease-back agreement for a non-residential property in Malaysia.
4	A lease agreement for rent of furniture and fixtures in a residential property in Singapore.

(10 marks)

Answer 1

Section 4(1) of Stamp duties Act (chapter 312) in Singapore is the charging section for determining whether stamp duty is leviable or not. For this purpose stamp duty becomes leviable if the below conditions are satisfied

a. The written instrument should be mentioned in First schedule to the Stamp duties Act (chapter 312)

b. The written document is executed in or outside Singapore for a property situated in singapore

c. If the written document is executed outside singapore for a property situated in singapore, then the written document should be received in singapore.

The duty amount is calculated as per rates specified in the first schdule to the Stamp duties Act (chapter 312).

Please find the analysis of leviability of stamp duty for each of the four cases below:

1. Stamp duty is leviable in Singapore on mortgage agreements executed outside singapore relating to any immovable property in singapore under section 4(1)(b) of the Stamp duties Act (Chapter 312). Mortgage agreement  are documents that are signed to mortgage a property to obtain a loan from bank or financial institution. Stamp duty is calculated on the loan amount. The rates are specified in first schedule to the Stamp duties Act.

2. Stamp duty is leviable for a mortgage agreement for a non residential property in Singapore under section 4(1)(b) of the Stamp duties Act (Chapter 312). Section 4(1) is applicable for both residential and non residential properties in singapore. As mentioned in 1 above, stamp duty is calculated on the loan amount.

3. No stamp duty is leviable under Stamp duties Act (chapter 312) in singapore for a property situated outside Singapore as stamp duties Act (chapter 312) is applicable only for properties situated in Singapore.

4. Lease agreement for rent of furtnitures and fixtures in a residential property in singapore is subject to stamp duty if it is in connection with lease of immovable property. This is chargeable under section 4(1) of the Stamp duties Act at the same rates as applicable for the lease mentioned in the first schedule to the Stamp duties Act (chapter 312).