Singapore trust tax rules and U.S. reporting

Singapore tax treatment of trust income

Singapore's published rules allocate tax on trust income according to the trustee's statutory income and beneficiaries' entitlement. The trustee rate stated by the Inland Revenue Authority of Singapore is 17 percent.^[1]

An individual Singapore tax resident beneficiary entitled to trust income under the trust deed, a will, or intestacy is taxed on that entitlement at personal income tax rates. The published rule also extends the tax exemptions and concessions available to individual resident taxpayers to those beneficiaries.^[1]

A non-resident beneficiary's share is taxed through the trustee at the prevailing trustee rate for the relevant year of assessment. A resident beneficiary's entitlement can be assessed even when the beneficiary receives less than the entitled amount.^[1]

Separate reporting rules for financial institutions

Singapore's Common Reporting Standard registration rules apply to Reporting Singaporean Financial Institutions, or Reporting SGFIs. An entity within specified financial institution categories is required to register when it is resident in Singapore, excluding an overseas branch, or is a Singapore branch of a non-resident financial institution.^[2]

The listed categories include custodial institutions, depository institutions, investment entities, and specified insurance companies. Trustee-documented trusts are also a non-reporting category when the trustee is a Reporting SGFI and undertakes the trust's due diligence and reporting obligations.^[2]

A Reporting SGFI must register, apply due diligence to its financial accounts to identify reportable accounts, and submit an annual CRS return to IRAS. IRAS states that a trustee-documented trust need not register separately, while the trustee provides the trust's details before filing a return on its behalf.^[2]

U.S. reporting for U.S. persons

U.S. persons include U.S. citizens. Creating a foreign trust, having transactions with one, being treated as its owner, or receiving distributions can carry income tax consequences and information reporting requirements.^[5]

The IRS describes Form 3520 reporting for certain transfers or loans to a foreign trust, distributions or certain use of trust property, and ownership under grantor trust rules. The IRS also says a U.S. owner must ensure the foreign trust files Form 3520-A and furnishes annual statements. If the trust does not file that return, the owner files a substitute with Form 3520.^[5]

Form 3520 is generally due on the fifteenth day of the fourth month after the end of the U.S. person's tax year. A U.S. citizen or resident meeting the stated conditions may have a later filing date, and an extension for the income tax return can extend the Form 3520 deadline subject to a limit.^[6]

Form 3520-A is generally due on the fifteenth day of the third month after the foreign trust's tax year. When that day falls on a weekend or legal holiday, the due date moves to the next business day. A U.S. person who receives a distribution from, was grantor of, or transferred assets to a foreign trust may have Form 1040 Schedule B reporting.^[5]

The Treasury Department describes FATCA as requiring foreign financial institutions to report to the IRS information about accounts held by U.S. taxpayers or certain foreign entities with substantial U.S. ownership. This account reporting regime is separate from the IRS trust forms.^[3]

Singapore treaty and FATCA agreement status

The United States and Singapore do not have an income tax treaty. Treaties address certain income, and rates or exemptions vary by country and income type.^[4]

The IRS describes treaty treatment generally: U.S. residents or citizens may receive reduced foreign tax rates or exemptions on certain foreign source income under a treaty. When no treaty exists between a country and the United States, income is taxed under the instructions and rates for the applicable U.S. return. State tax treatment can differ because some states do not honor treaty provisions.^[4]

Singapore's current Model 1 FATCA intergovernmental agreement with the United States is in force. It supersedes the earlier Model 1 agreement.^[3]

FATCA requires foreign financial institutions to report to the IRS information about accounts held by U.S. taxpayers or by foreign entities with substantial U.S. taxpayer ownership. Institutions may register directly with the IRS or comply with FATCA intergovernmental agreements treated as in effect in their jurisdictions.

Questions and answers

Related resources

Related glossary terms

• Section 679: Section 679 addresses certain transfers by U.S. persons to foreign trusts. It treats some property transfers as ownership when the trust has a U.S. beneficiary.
• Trust register: A trust register is an official record of trusts, their parties or trustees, such as the UK Trust Registration Service and EU beneficial-ownership registers.
• Intergovernmental agreement: An intergovernmental agreement appears in FATCA rules for foreign financial institutions. Form 8938 instructions also use the term for certain foreign accounts.

Related articles and guides

• Singapore Trust Types for U.S. Citizens: Singapore trust types include private family trusts, with identified trust legislation and commentary on proposed purpose trusts, for U.S. citizen readers.
• Isle of Man trust tax and reporting rules: The Isle of Man Act sets different income tax bases for residents and non-residents, with trustee record rules and IRS reporting rules for foreign trusts.
• Bahamas Trust Tax and Reporting Rules: Bahamas trust rules on trustee duties, accounting records and certain tax matters, with the IRS reporting that applies to U.S. citizens with a foreign trust.

Tools and official documents

• FinCEN Report 114 (FBAR): foreign account reporting: FinCEN Report 114 (FBAR) for U.S. citizens: account definitions, financial interests, signature authority, trust provisions and the filing requirements it sets.
• Form 1116: foreign tax credit: Form 1116 claims the foreign tax credit for U.S. citizens: income categories, supporting information, related forms and filing timing under the instructions.

Related pages

• Singapore: overview: Start page for this jurisdiction.
• Trustee regulation and licensing