Originally Posted by Condorich
Asialaw Magazine March 2009
By Sandra Han and Sharon Tan
Parliament has passed the Stamp Duties Bill. The Bill removes the mandatory requirement of adjudication by the Commissioner of Stamp Duties (Commissioner) on any conveyance or transfer of gifts. This including the transfer of immovable properties in which no consideration, nominal or inadequate is paid. (Cases where marriage is the consideration are not covered). The amendments took effect on January 1 2009. After the Inland Revenue Authority of Singapore (IRAS) deleted Section 16(2) of the Stamp Duties Act, it published a circular on December 22 2008 explaining the new stamping procedure for any conveyance or transfer by way of gift.
Previously, transfer documents for gift cases involving immovable properties had to be submitted to the Commissioner who would judge how much stamp duty was payable. The taxpayer’s opinion of the market value of the property (as at the date of transfer), often supported by a valuation report (as at the date of transfer), also had to be submitted to the Commissioner as supporting documents. An adjudication fee of S$90.00 was payable by the taxpayer. Notwithstanding the supporting documents, the Commissioner could request a certificate of valuation from the Chief Valuer and a valuation fee of at least S$105 for each certificate of valuation would then be payable.
From January 1 taxpayers do not have to submit the transfer documents to the Commissioner for adjudication and can now self-assess their stamp duty. The transfer documents would then be electronically stamped without having to pay any adjudication and valuation fees. The stamp duty must be calculated based on the market value of the property as at the date of transfer. The Circular refers the market value of the property to the “price that the property might reasonably be expected to fetch in the open market on an arm’s length basis”. It is not compulsory for taxpayers to obtain a valuation report as long as the amount declared for stamping is reflective of the market value of the property (at the date of transfer). However, where taxpayers are uncertain of the market value of the property, they may still submit the transfer documents for adjudication. In that situation, the provisions set out above will still apply and taxpayers are liable to pay the adjudication and valuation fees.
The rationale for removing the mandatory adjudication is so that taxpayers enjoy a faster transfer process - because the process may take about three weeks - and to save on adjudication and valuation fees. Parliament also outlines these further reasons: Most of the gift cases involved Housing and Development Board (HDB) flats where IRAS can easily ascertain their values through HDB’s valuation table. Secondly, most property transfers have third-party valuation reports which safeguard against the under-declaration of property values. Whilst taxpayers can save on adjudication and valuation fees, it may be prudent for taxpayers to procure an independent valuation report of the property to determine the stamp duty before proceeding to e-stamp the transfer documents. This is especially important in a volatile property market where market value of the property is difficult to determine and substantiate without engaging the professional help of independent valuers. There being no time bar for recovery of tax, duty or interest, taxpayers should be aware that IRAS will continue to conduct audit checks on conveyance or transfer documents relating to gift cases. If it discovers that there is an under-declaration of value, IRAS can recover the duty underpaid and impose a penalty of up to four times the amount of deficient duty, depending on the circumstances.
Therefore, in the case where there are no compelling reasons to speed up the transfer process, it may be worth considering sending the transfer documents to the Commissioner for adjudication of stamp duty payable.
This should be the IRAS Circular.
https://iras.gov.sg/irasHome/uploade...ft%20Cases.pdf
More information here
http://www.iras.gov.sg/irasHome/page04.aspx?id=1974
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