Thinking about what happens to your assets after you’re gone can feel uncomfortable—but it’s something many of us eventually face. You might wonder if your family will need to pay taxes on what you leave behind, or whether your estate will be delayed by legal processes.
One of the most confusing areas is inheritance tax. Questions like “Do I need to pay anything?” or “What paperwork is required?” often come up when trying to settle an estate. Without clear guidance, it’s easy to make mistakes that delay distribution or trigger penalties.
In this guide, we’ll help you understand how inheritance tax in Singapore works, who’s responsible for it, when it applies, and how to handle it step-by-step.
What Is Inheritance Tax In Singapore?
Inheritance tax, also known as estate duty, was a tax on the total market value of a deceased person’s assets at the time of death. However, inheritance tax was abolished in Singapore on 15 February 2008.
Inheritance tax applied to the estate of a deceased person. An estate includes all assets owned solely by the deceased, jointly owned with others, or held in trust. The tax was calculated based on the total value of these assets as of the date of death.
Assets included in the estate might be:
|
Asset Type |
Description |
| Solely Owned Assets | Property, cash, or stocks solely owned by the deceased. |
| Jointly Owned Assets | The deceased’s share in jointly owned property. |
| Gifts Made Within Five Years Before Death | Gifts made by the deceased within five years before death. |
| Gifts With Retained Benefits | Gifts where the deceased retained benefits, such as rental income. |
| Assets Held in Trust | Assets held in trust that personally benefited the deceased. |
Who Has to Pay Inheritance Tax?
Inheritance tax applied only to those who died before 15 February 2008. Those who passed away on or after this date are not required to pay inheritance tax.
For those who passed before 2008, the tax was typically paid by the executor of the will, or by the administrator of the estate if there was no will. The accountable person would be responsible for ensuring the tax was paid on time.
Why Was Inheritance Tax Abolished?
Inheritance tax was initially introduced as a way to redistribute wealth. The aim was to reduce wealth concentration in certain families and promote social equity. The tax was meant to fund public development, benefiting society at large.
However, over time, the tax became less effective. As wealth in Singapore grew through entrepreneurial ventures, rather than inheritance, the impact of the tax diminished. Additionally, abolishing inheritance tax was seen as a way to attract high-net-worth individuals to Singapore. Without the tax burden, these individuals could invest and grow their wealth in the country, benefiting Singapore’s economy.
Is Inheritance Tax the Same As Estate Administration Fees?
Inheritance tax and estate administration fees are two different things. Estate administration fees are charges for managing the estate after someone passes away. These fees are set by the Public Trustee and apply to estates valued at $50,000 or less.
Inheritance tax, on the other hand, was a tax on the deceased’s estate that applied only until 2008. It should not be confused with the administration fees. The administration fees cover the cost of managing and distributing the estate, and they are still in place today.
The key differences are:
| Aspect | Inheritance Tax | Estate Administration Fees |
| Applies to | Estates of individuals who died before 15 February 2008. | Estates valued at $50,000 or less. |
| Purpose | Tax on the estate’s total market value. | Fees for managing and distributing the estate. |
| Who Pays | Paid by the executor or administrator. | Paid to the Public Trustee. |
| When It Was Abolished | 15 February 2008. | Still applicable to qualifying estates. |
How To Calculate Inheritance Tax In Singapore
Step 1: Identifying The Assets That Are Subject To Inheritance Tax
The first step in calculating inheritance tax is identifying the assets that are taxable. Not all assets were subject to inheritance tax. The taxable assets in an estate were determined based on the domicile of the deceased at the time of their death.
Domicile of the Deceased
Domicile refers to the country where a person considered their permanent residence. In Singapore, the domicile of the deceased was used to determine which assets were subject to inheritance tax.
For Deceased Domiciled in Singapore
If the deceased was domiciled in Singapore, inheritance tax applied to the total market value of both movable and immovable assets located in Singapore. This included:
|
Asset Type |
Description |
| Movable Assets | Tangible items like vehicles, computers, jewelry, and other personal items, even if located outside Singapore. |
| Immovable Assets | Real estate like land and buildings within Singapore. |
| Gifts Made Within 5 Years | Gifts made within five years of death were included in the taxable estate. |
| Assets Held in Trust | Any assets held in a trust for the deceased’s benefit, such as bank accounts or property held for a minor. |
For Deceased Domiciled Outside Singapore
For individuals domiciled outside Singapore, the tax rules depended on the time of their death.
|
Date of Death |
Taxable Assets |
| Before 1 January 2002 | Both movable and immovable assets in Singapore were taxed. |
| After 1 January 2002 and Before 15 February 2008 | Only immovable assets in Singapore were subject to inheritance tax. Movable assets were exempt. |
Step 2: Determining The Market Value Of The Assets
Once the taxable assets were identified, the next step was to determine their market value at the time of death. The market value is the amount the asset could be sold for on the open market at the time of the deceased’s death.
Determining the Value of Assets
The market value of different types of assets was calculated using available valuation methods. Here’s how the value of various assets was determined:
| Asset Type | How Market Value Was Determined |
| Immovable Property | Valuations were done by professional appraisers or based on current market prices of similar properties. |
| Bank Accounts | The value was the balance in the deceased’s account(s) on the date of death. |
| Public Listed Shares | Shares were valued at the market price on the date of death, with values available in publications like The Business Times or The Straits Times. |
| Items in Safe Deposit Boxes | The market value of the contents of a safe deposit box was based on the value of the items on the date of death. If the value exceeded $10,000, an inventory and clearance were required. |
For each of these assets, the executor or administrator would gather information and relevant documents to ensure that the value was determined correctly. This process was crucial, as the inheritance tax was based on the total market value of the taxable estate.
Step 3: Subtracting Deductions And Exemptions
Once the total market value of the estate was calculated, deductions and exemptions could be applied to reduce the estate’s taxable value. This step helped lower the tax burden on the heirs or beneficiaries.
Deductions:
Deductions were available for funeral expenses and debts.
|
Deduction Type |
Description |
| Funeral Expenses | A deduction of up to $6,000 (or the actual expenses, whichever was lower) was allowed for funeral costs. |
| Debts | Debts that were outstanding at the time of death, such as mortgages or loans, were subtracted from the total estate value. The debts had to be incurred for the deceased’s personal use and benefit. |
Exemptions:
Some assets and gifts were exempt from inheritance tax. Exemptions were available based on the type of asset or the nature of the gift. Common exemptions included:
|
Asset Type |
Exemption Threshold |
| Residential Properties | Up to $9 million for residential properties located in Singapore. |
| Other Assets | A threshold of $600,000 for most other assets, such as bank accounts, shares, or CPF balances. |
| Gifts to Charitable Causes | Gifts made to the Singapore government or approved institutions were exempt from inheritance tax. These gifts had to be made to recognized public institutions or charities. |
Step 4: Applying The Tax Rate To The Remaining Value
After applying any exemptions and deductions, the remaining taxable estate was subject to inheritance tax at a specific rate. The tax rates were progressive, meaning that higher-value estates faced higher rates.
|
Estate Value |
Tax Rate |
| Up to $12 million | 5% on the first $12 million. |
| Above $12 million | 10% on the amount exceeding $12 million. |
For example, if the estate value was $14 million, the first $12 million would be taxed at 5%, and the remaining $2 million would be taxed at 10%. This progressive system meant that larger estates faced a higher tax burden.
Step 5: Accounting For Interest And Calculating The Final Tax
If inheritance tax was not paid on time, interest would accrue on the unpaid amount. Interest was charged from the date of death until the tax was fully paid. The interest rate depended on how long the payment was delayed.
| Time Period After Death |
Interest Rate |
| First 6 months | 0% interest. |
| 6 months to 18 months | 6% per year interest on the unpaid amount. |
| After 18 months | 12% per year interest on the unpaid amount. |
For instance, if the inheritance tax was due 6 months after death, a 6% annual interest rate would apply. If the payment was delayed for more than 18 months, the interest rate increased to 12% per year.
Interest rates were calculated on the outstanding amount of inheritance tax, and the longer the delay in payment, the higher the interest accrued.
Example of Interest Calculation
If inheritance tax of $100,000 was due, and payment was delayed by 18 months, the interest would be calculated as follows:
- First 6 months: 0% interest
- Next 12 months: 6% interest on $100,000 = $6,000
- Total interest after 18 months: $6,000, making the total amount payable $106,000.
Interest was designed to encourage timely payment, and penalties could be applied if payments were excessively delayed.
Special Considerations
Some special rules applied to specific cases, such as when two people died within a short period. The Quick Succession Relief (QSR) applied when two persons died within 24 months of each other. In this case, the estate of the later deceased could receive a relief, decreasing the estate’s taxable value.
| Period Between Deaths | Relief Percentage |
| 0 to 6 months | 100% relief |
| 6 to 12 months | 75% relief |
| 12 to 18 months | 50% relief |
| 18 to 24 months | 25% relief |
| More than 24 months | No relief |
The relief percentage decreased with the time gap between the deaths, helping reduce the tax burden on estates affected by quick succession.
Example Of Complete Calculation
Let’s go through a hypothetical example to better understand the inheritance tax calculation process.
Estate Value:
|
Asset Type |
Value |
| Residential Property | $500,000 |
| Bank Accounts | $200,000 |
| Public Shares | $100,000 |
| Total Estate Value | $800,000 |
Deductions:
- Funeral Expenses: $6,000
- Debts: $50,000
Net Estate Value: $800,000 – $6,000 – $50,000 = $744,000
Exemption for Residential Property: $600,000 (total property value exceeds exemption threshold)
Taxable Value: $744,000 – $600,000 = $144,000
Tax Payable:
- 5% on the first $12 million (since the estate is under $12 million): $144,000 × 5% = $7,200
Total Tax Payable: $7,200
If the tax is not paid within 6 months, the interest will be applied accordingly.
Understanding The Payment Deadlines For Inheritance Tax
If the deceased passed away before 15 February 2008, inheritance tax may apply. For eligible estates, the payment timeline depends on the date of death.
For Deaths Between 1 January 2005 and 14 February 2008:
- The executor, administrator, or accountable person must pay the inheritance tax.
- Payment must be made within 30 days from the date of the Notice of Assessment (NOA) issued by the Inland Revenue Authority of Singapore (IRAS).
- The NOA will state:
- The amount of inheritance tax due
- Any interest already incurred
- The final deadline for payment
For Deaths Before 1 January 2005:
- The inheritance tax itself is not payable.
- However, interest on unpaid tax amounts still applies and must be paid.
|
Date of Death |
What Must Be Paid |
Deadline |
| Between 1 Jan 2005 and 14 Feb 2008 | Full inheritance tax + interest (if applicable) | 30 days from date of NOA |
| Before 1 Jan 2005 | Interest on unpaid tax only | As instructed in IRAS assessment |
If payment is not made by the due date, penalties will be imposed on top of any unpaid amounts.
The Consequences Of Late Payment
If inheritance tax remains unpaid after the deadline, IRAS will impose late payment penalties. These are added on top of any interest charged on the outstanding tax.
Penalty rates are structured as follows:
|
Time Overdue |
Penalty Rate |
| More than 6 months after death + unpaid within 30 days of NOA | 6% per year (starting first full month) |
| Each additional full month | Additional 1% per year |
| Total Maximum Penalty | Capped at 12% per year |
For example, if the tax is unpaid for three full months beyond the grace period, the total annualised penalty would be 9%. This is separate from the standard interest charges that begin accruing from the date of death.
Penalties continue to accumulate until the full amount is paid.
What Is An Inheritance Tax Demand Note?
A Demand Note is a formal notice issued by IRAS when inheritance tax and related charges remain unpaid after the due date.
It will include:
- The outstanding tax
- Accrued interest
- Applicable penalties
- A final payment deadline
If payment is not made by the stated deadline, IRAS has the authority to recover the unpaid amount through legal action. This can be done without giving any additional notice.
Receiving a Demand Note is a final warning. It is important to act immediately to prevent further financial and legal consequences.
How To Pay Inheritance Tax In Singapore
Step 1: Obtain The Notice Of Assessment (NOA)
The process begins with the Inland Revenue Authority of Singapore (IRAS) issuing a Notice of Assessment. This notice outlines the amount of estate duty payable. Payment must be made within 30 days from the date stated in the NOA to avoid penalties.
Step 2: Prepare The Required Payment Information
Before making any payment, prepare one of the following reference numbers:
- Tax Reference Number
- 14-digit Payment Slip Number
- 13-digit Document Reference Number
Use only one reference number per transaction. This ensures the payment is correctly matched to the estate’s tax account. Mixing multiple reference numbers in one payment can cause delays and may leave some tax accounts unresolved.
Step 3: Choose A Payment Method
You can pay estate duty using internet banking, PayNow QR, AXS e-Station or AXS m-Station, GIRO, or cheque. IRAS does not accept direct credit card payments, but some options like AXS platforms allow cards with limits. Digital payments are strongly recommended for faster and safer processing.
Step 4: Confirm That Payment Was Received
After making payment, log in to IRAS’ myTax Portal to confirm your payment status. Most payments are processed within three working days if the correct reference number is used. Any incomplete or incorrect information may result in delays.
Step 5: Obtain Estate Duty Clearance
Once payment is verified, IRAS will send the Schedule of Assets to the court. This is required for the Grant of Probate or Letters of Administration. Estate duty clearance must be completed before the estate can be legally distributed.
When Do You Need Inheritance Tax Clearance In Singapore?
Inheritance tax clearance is proof that all estate duty obligations have been settled under the Estate Duty Act. It confirms that IRAS has received the necessary disclosures and payments related to the deceased’s estate.
Clearance is not required in simple cases, such as:
|
Scenario |
Requirement |
| Safe deposit box contents under $10,000 | No clearance needed |
| Only asset is an HDB flat held in joint tenancy | No clearance needed if total other assets ≤ $600,000 |
However, clearance is required in more complex situations, such as:
- A Grant of Representation (Grant of Probate or Letters of Administration) is needed
- The deceased gifted all assets before death and their total value exceeds $600,000
- The deceased died on or after 28 February 1996 and:
- Held bank accounts and a dwelling house in joint names, and
- The total value of those assets exceeds $600,000 and $9 million respectively
- The value of safe deposit box contents in the same bank exceeds $10,000
These are common scenarios. However, IRAS may still require clearance in other cases depending on the estate structure and documentation provided.
Conclusion About Inheritance Tax In Singapore
Dealing with inheritance tax in Singapore can feel overwhelming, especially for families navigating the legal duties after a loved one’s passing. If the death occurred before 15 February 2008, estate duty may still apply and must be settled before assets are distributed.
Tembusu Law is here to guide you through the process. Our experienced lawyers offer clear, practical advice on probate, estate duty, and what happens to debts when someone dies. If you’re managing an estate or facing questions about liabilities, speak with us today—a quick conversation could make all the difference.
Reach out now for a free legal consultation!
Frequently Asked Questions About Inheritance Tax In Singapore
Is Inheritance Tax Still Payable In Singapore?
No, inheritance tax (estate duty) was abolished for all deaths occurring on or after 15 February 2008.
Who Has To Pay Inheritance Tax?
If the deceased died before 15 February 2008, the executor or administrator of the estate is responsible for paying the tax.
What Assets Are Subject To Inheritance Tax?
Assets include property, bank accounts, shares, gifts made within 5 years of death, and items held in trust that benefited the deceased.
Do I Need To File For Inheritance Tax Clearance?
You only need to file for clearance if a Grant of Representation is required or if the estate exceeds certain value thresholds.
How Is Inheritance Tax Calculated?
It’s based on the total market value of taxable assets, minus deductions and exemptions, then taxed at 5% or 10% depending on the value.
How Do I Pay Inheritance Tax To IRAS?
You can pay via internet banking, PayNow QR, AXS, GIRO, or cheque using the correct reference number provided by IRAS.
