Gains from Sale of Property, Shares and Financial Instruments in Singapore

Capital gains tax is a type of tax that is levied on gains or profits that an investor (individuals, corporations, etc) realizes when they sell the capital asset for a price that is higher than the original purchase price paid previously.

Capital gains taxes are only triggered when an asset is sold, not while it is still being held by the investor. For example,  the investor can own properties that appreciate every year, but no capital gains tax liability will be incurred on the gains until it is sold or realized.

In Singapore, capital gains on the sale of properties are not assessable to tax. However, the gains may be taxable if the tax authorities were to deem that the gains were made from trading properties. In this respect, it will be prudent for investors to take into account the criteria commonly used by the tax authorities to assess whether the gains are from trading of properties, as follows:

  1. Frequency of transactions – how often you buy and sell properties
  2. Reasons for acquiring and selling of properties – change of use, migrating to another country
  3. Financial means to hold the property for the long term – whether investors have the financial means to hold the properties
  4. Holding period – a longer holding period will most likely indicate it is capital

As for gains from the sale of shares or other financial instruments, the general view is that it is a personal investment. Thus, no tax will be levied on these gains.

The absence of capital gains tax regime in Singapore helps to attract investors to invest or set up holding companies in Singapore. This together with one of the lowest corporate tax rates in the world and a host of tax incentives, Singapore is well-placed for investors to grow their businesses and wealth in the region.

Contact a professional tax agent in Singapore to know more.


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ACRA Cancels Registration of Filing Agent and Qualified Individual for AML/CFT Breaches

The Accounting and Corporate Regulatory Authority (ACRA) had cancelled the registrations of filing agent (RFA) and qualified individual (RQI) on 18 January 2024. The registrations were cancelled in view of breaches of anti-money laundering and countering the financing of terrorism (AML/CFT) controls under the ACRA (Filing Agents and Qualified Individuals) Regulations 2015 (the “ACRA Regulations”).

Some of the basic AMT/CFT controls that a RFA and RQI are required to exercise are as follows:

(a) perform additional customer due diligence measures when a customer is not physically present during onboarding;

(b) inquiring if there exists any beneficial owner in relation to some of its customers; and

(c) perform risk assessments i

RQIs and RFAs provide corporate secretarial services for business entities, such as helping customers to incorporate companies, file annual returns and fulfil other filing requirements under the Companies Act 1967 or other Acts under ACRA’s purview. RQIs and RFAs are required to perform customer due diligence measures in accordance with the ACRA Regulations, and conduct their business in such a manner as to guard against the facilitation of money laundering and the financing of terrorism. RQIs and RFAs must also satisfy statutory requirements such as being fit and proper persons, to be registered or continue to be registered.

RQIs and RFAs who breach their statutory obligations may be subject to enforcement actions, such as financial penalties of up to $10,000 or $25,000 per breach respectively or have their registrations with ACRA suspended or cancelled.

Therefore, RQIs and RFAs play an important role in helping to detect and combat illicit activities.

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