IRAS’s Audit on the 99-to-1 Property Scheme and ABSD: Navigating the Tax Landmines and Avoiding Tax Penalties

Description

Additional Buyer’s Stamp Duty (‘ABSD’) has often been regarded as a very effective tool by the government in suppressing rising residential property prices. For unwary home buyers, the imposition of ABSD can come as a surprise. For example, unbeknownst to many, where there are two or more co-purchasers, ABSD is imposed on the entire value of the residential property at the highest property count of the purchasers concerned.

In recent years, the Commissioner of Stamp Duties (‘CSD’) has been clamping down on “99-to-1” co-ownership arrangements used by purchasers to reduce ABSD where there is a joint purchase, on the basis that these arrangements are stamp duty avoidance arrangements.

This seminar will give an overview of the additional buyers stamp duties regime, including recent initiatives by the CSD with regard to “99-to-1” co-ownership arrangement. Participants will understand why the 99-to-1 arrangement is carried out and why it is frowned upon by the authorities.

Expert speaker Hern Kuan will outline the legal and practical issues surrounding stamp duties and ABSD, including his experience in engaging the CSD on behalf of clients who have carried out their purchases under a “99-to-1” arrangement.

Programme Outline

1. Introduction to Stamp Duty and ABSD

• Overview of the Stamp Duties Regime
• Fundamental principles
• Electronic instruments (Oct 2018)
• Introduction to ABSD
• Scope and Mechanics
• Policy behind ABSD

2. The CSD’s initiatives on “99-to-1” transactions

• Understanding “99-to-1” and the recent audits on “99-to-1” property transactions
• What is a “99-to-1” transaction and why it is advantageous to carry it out
• Is “99-to-1” stamp duty avoidance?
• Key points on stamp duty avoidance
• 5 different case studies
• Reliefs applicable to “99-to-1” ABSD scenarios
• What to do when assessed in “99-to-1” ABSD scenarios
• Dispute Process
• Objections
• Procedure before High Court
• Strategies for compliance and mitigation
• Voluntary disclosure
• Legal Professional Privilege

Q&A

Practice Area: Tax

Training Level: Intermediate

3 Public CPD Points (SILE-Legal Professionals) (TBC)

SILE ATTENDANCE POLICY: Participants who wish to obtain CPD Points are reminded that they must comply strictly with the Attendance Policy set out in the CPD Guidelines. For this activity, this includes signing in on arrival and signing out at the conclusion of the activity in the manner required by the organiser, and not being absent from the entire activity for more than 15 minutes. Participants who do not comply with the Attendance Policy will not be able to obtain CPD Points for attending the activity. Please refer to http://www.sileCPDcentre.sg for more information.

What you will learn

• Understand the mechanics and policies behind ABSD and why “99-to-1” arrangements are frowned upon;
• Gain a practical overview of the legal issues concerning ABSD and “99-to-1” arrangements;
• Understand how to make appeals to the CSD

Target Audience

• Lawyers
• Tax consultants
• Realtors
• Property owners/purchasers

Expert Speaker

Liu Hern Kuan
Head of Tax, Insights Law LLC

Hern Kuan has wide experience in Revenue Law, having lectured in it at the Law Faculty in NUS, practiced as a tax manager in Big-4 accounting firms and as head of tax in a major law firm. He was also the Chief Legal Officer of the Inland Revenue Authority of Singapore (IRAS) for 10 years.

Hern Kuan’s tax practice is largely focused on civil and criminal disputes with IRAS and tax planning and structuring, both domestic and international tax. He currently assists many property owners who have been involved in 99-to-1 arrangements and are making appeals to the Commissioner of Stamp Duties.