Stamp Duties (Relief from Stamp Duty Upon Transfer of Assets Between Associated Companies) Rules

Stamp Duties Act

(Chapter 312, Sections 15 and 77)

R 2

G.N. No. S 580/2000

REVISED EDITION 2002

(31st January 2002)

[31st January 2002]

Citation

1. These Rules may be cited as the Stamp Duties (Relief from Stamp Duty upon Transfer of Assets between Associated Companies) Rules.

Definitions

2.—(1) In these Rules, unless the context otherwise requires —

“asset” means immovable property or shares, or any interest thereof;

“company” means a company with limited liability;

“holding company” has the same meaning as in section 5(4) of the Companies Act (Cap. 50) read with section 5 (1) thereof;

“immediate holding company” has the same meaning as in section 5(4) of the Companies Act (Cap. 50) read with section 5 (1) (a) thereof;

“indirect beneficial owner”, in relation to another company, means a holding company within the meaning of section 5(4) of the Companies Act read with section 5 (1) (b) thereof;

“relevant offer of shares”, in relation to a company, means —

(a)	the initial public offer; or
(b)	a subsequent offer,

for subscription or sale of shares of the company where —

(i)	the shares are listed on the Singapore Exchange, or listed both on the Singapore Exchange and elsewhere; and
(ii)	the total issued shares that are offered to the public do not exceed the prevailing minimum requirement set by the Singapore Exchange for a main board listing of the shares at the time of the initial public offer or subsequent offer, as the case may be;

“shares” includes stocks;

“ultimate holding company” has the same meaning as in section 5A of the Companies Act.

(2) In these Rules, any reference to issued share capital is a reference to ordinary shares based on their nominal value.

Conditions for relief from ad valorem stamp duty upon transfer of assets between associated companies

3. The conditions for relief from ad valorem stamp duty upon the transfer of assets between associated companies referred to in section 15(1) of the Act are as follows:

(a)

the effect of any instrument executed on or after 1st July 2000 is to transfer, convey or assign the beneficial interest in any asset owned by one associated company (referred to in these Rules as the transferor company) to another associated company (referred to in these Rules as the transferee company);

(b)

the transferee company is a company that is incorporated in Singapore, or resident in Singapore for income tax purposes within the meaning of section 2 of the Income Tax Act (Cap. 134);

(c)

at the time of execution of the instrument, the transferor company and the transferee company have been associated for at least 12 months prior to the transfer, conveyance or assignment referred to in paragraph (a), except where the transferee company had been incorporated specially for the purpose of the acquisition of the asset referred to in paragraph (a);

(d)

valuable consideration for the acquisition by the transferee company is paid to the transferor company either in cash or by an issue of shares in the transferee company, at the open market value;

(e)

the transfer, conveyance or assignment of the asset is for bona fide commercial reasons;

(f)

the transfer, conveyance or assignment by the transferor company to the transferee company is in respect of the entire beneficial interest held by the transferor company in the asset; and

(g)

the instrument was not made pursuant to or in connection with an arrangement under which —

(i)

the consideration or any part of it for the acquisition of the asset by the transferee company is (directly or indirectly) provided by or received from —

(A)	a person other than the transferee company; or
(B)	a company (referred to in this rule as the third company) which is not associated to the transferee company within the meaning of rule 4, unless the third company is a financial institution acting in the capacity of a lender of funds to the transferee company; and

(ii)

the beneficial interest in the asset was previously (directly or indirectly) transferred, conveyed or assigned to the transferor company by any company which was not associated to the transferor company within the meaning of rule 4 unless —

(A)	duty was paid on the acquisition by, or the transfer, conveyance or assignment to, the transferor company;
(B)	relief for such duty was allowed; or
(C)	such duty was remitted.

Associated company

4. For the purposes of these Rules, a company shall be taken to be associated with another company if —

(a)	the company is the beneficial owner (directly or indirectly) of not less than 75% of the issued share capital of the other company, and where the company is an indirect beneficial owner of that other company, the company has more than half of the voting power in respect of that other company; or
(b)	the company is a holding company which is the beneficial owner (directly or indirectly) of not less than 75% of the issued share capital of each of the transferor company and the transferee company, and where the holding company is an indirect beneficial owner of that other company, the holding company has more than half of the voting power in respect of that other company.

Statutory declaration

5. Where a claim is made for relief under section 15(1) of the Act, the Commissioner may require the delivery to him of a statutory declaration in such form as he may direct, made by an advocate and solicitor or such other person as the Commissioner may allow, and such further evidence as the Commissioner considers necessary.

Subsequent disallowance of relief

6.—(1) The matters referred to in section 15(3)(b) of the Act are as follows:

(a)

the transferor company and the transferee company cease to be associated within the meaning of rule 4 within 2 years from the date of the acquisition of the asset by the transferee company by reason of a change in the percentage of beneficial ownership of —

(i)	the transferor company; or
(ii)	a holding company of both the transferor company and the transferee company,

unless such change is in consequence of —

(A)	a reconstruction;
(B)	an amalgamation;
(C)	a liquidation where the conditions specified in paragraph (2) are satisfied; or
(D)	a relevant offer of shares of the existing issued share capital of the transferee company or the transferor company;

(b)

the transferee company disposes of the asset that it has acquired within 2 years from the date of acquisition of the asset, unless such disposal is in consequence of —

(i)

a reconstruction;

(ii)

an amalgamation; or

(iii)

a liquidation where the assets of the transferee company are distributed in specie to the immediate holding company of the transferee company, and for the period of 2 years from the date of acquisition by the transferee company —

(A)	the immediate holding company retains the assets of the transferee company; and
(B)	the immediate holding company remains associated, within the meaning of rule 4, with the transferor company; or

(c)

the instrument was not executed within a period of 12 months from the date of the agreement (written or otherwise) for the acquisition of the asset by the transferee company referred to in rule 3(a).

(2) Unless the Commissioner otherwise allows, the conditions referred to in paragraph (1)(a)(C) are as follows:

(a)

in the case of a liquidation of the transferor company —

(i)	the transferor company is not the ultimate holding company of the transferee company; and
(ii)	the transferee company remains associated with any company which the transferor company was directly associated with at the time of the liquidation (in both cases within the meaning of rule 4) for a period of 2 years from the date of the acquisition of the asset by the transferee company; and

(b)

in the case of a liquidation of the transferee company, the transferor company remains associated with any company which the transferee company was directly associated with at the time of the liquidation (in both cases within the meaning of rule 4) for a period of 2 years from the date of the acquisition of the asset by the transferee company.

Commissioner to be notified of certain occurrences

7.—(1) Where a claim for relief under section 15(1) of the Act has been allowed and any matter specified in rule 6 occurs, each company which was a party to the instrument shall notify the Commissioner of the circumstances of the occurrence within 30 days from the date of the occurrence.

(2) Any company which fails to comply with paragraph (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $1,000.

[G.N. No. S 580/2000]

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