27.—(1) In determining the value of an estate for the purpose of estate duty, allowance shall be made for reasonable funeral expenses not exceeding $1,000 or 5% of the ascertained value of the estate, whichever is the smaller, and for debts and encumbrances, but an allowance shall not be made —
(a)
for debts incurred by the deceased or encumbrances created by a disposition made by the deceased, unless those debts or encumbrances were incurred or created bona fide for full consideration in money or money’s worth wholly for the deceased’s own use and benefit and take effect out of his interest;
(b)
for any debt in respect whereof there is a right to reimbursement from any other estate or person, unless the reimbursement cannot be obtained; or
(c)
more than once for the same debt or encumbrance charged upon different portions of the estate,
and any debt or encumbrance for which an allowance is made shall be deducted from the value of the property liable thereto.
(2) An allowance shall not be made in the first instance for debts or funeral expenses due to persons resident out of Singapore (unless contracted to be paid in Singapore or charged on property situate within Singapore) except out of the value of any property of the deceased situate out of Singapore in respect of which estate duty is paid; and there shall be no repayment of estate duty in respect of any such debts or funeral expenses except to the extent to which it is shown to the satisfaction of the Commissioner that the property of the deceased situate in the country in which the person to whom the debts or funeral expenses are due resides is insufficient for their payment.