18. In this Part —
“company to which this Part applies” means any body corporate wherever incorporated, which either —
is so constituted as not to be controlled by its shareholders or by any class thereof; or
has not issued to the public, or in the case of a company which is about to make an issue of shares to the public, will not, when it has made that issue, have issued to the public, more than half of the shares by the holders whereof it is controlled;
“share” includes any interest in a company, by whatsoever name it is called, analogous to a share, and “shareholder” shall be construed accordingly;
“preference share” means a share the holder of which is entitled to a dividend at a fixed rate only;
“value of the total assets of the company” means the principal value, ascertained in accordance with section 24, of all the assets of the company as a going concern, including goodwill, after deducting therefrom —
the principal value so ascertained of any debentures, debenture stock and preference shares of the company;
all debts of the company incurred or created bona fide for consideration in money or money’s worth;
such sum as on a just and fair computation represents any future or contingent liabilities thereof which are uncertain in amount; and
the amount of any reserve fund separately invested which is bona fide intended to be applied in payment of pensions to employees or otherwise for the benefit of them or their dependants or relatives, and in no other manner.
—(1) On the death after 22nd April 1940 of any person who has at any time after 1st January 1925 —
made to a company to which this Part applies, directly or indirectly, any such transfer as is specified in subsection (2); and
received within the prescribed period out of the resources or at the expense of the company, directly or indirectly any such benefit as is so specified,
there shall be computed for each accounting year falling wholly or partly within the prescribed period the proportion which the total value of the benefits so received in the accounting year bears to the total income of the company in the accounting year, and, if the average of the proportions so computed exceeds 50%, there shall, for the purposes of estate duty, be deemed to pass on the death (over and above any other property which passes or is deemed to pass thereon), such sum of money, not exceeding the value of the total assets of the company, as bears to that value the same proportion as that average proportion.
(2) The sum computed under subsection (1) shall be reduced by the amount, if any, by which the principal value at the date of death —
of the subject of the transfer; or
if the subject of the transfer has been sold or exchanged by the company either of the subject of the transfer or of the property in the hands of the company which is or represents the proceeds of the sale or exchange,
is shown to the satisfaction of the Commissioner to fall short of that sum.
(3) Notwithstanding anything in this section, the value of any property or any interest in property shall not be taken into account, directly or indirectly, for the purpose of assessment of estate duty more than once on the same death.
(4) If the total assets of the company comprise any property which is by virtue of section 20 deemed to pass on the death, there shall, in computing those proportions and ascertaining the sum of money, if any, which is deemed to pass by virtue of this section, be subtracted —
from the value of the total assets of the company, the value of that property as ascertained for the purposes of section 20; and
from the total income of the company in every accounting year and also from the total value of the benefits received by the deceased therein, a sum equal to so much of that total income as is ascribable to —
that property; or
in a case where that property is deemed to pass as being or representing the proceeds of any other property, that other property or the proceeds thereof or any property representing those proceeds.
(5) The transfers referred to in subsection (1) are transfers, whether made for consideration or not, of property (being property which, if it had been in the disposition of the deceased at his death, would have been property in respect of which estate duty would have been payable on the death) or any interest in any such property, other than —
transfers on bona fide sales where the consideration for the sale was received or receivable wholly by the deceased for his own use or benefit and was satisfied or to be satisfied in one or more of the following manners, that is to say, by a capital sum of a fixed amount or by shares in or debentures of the company;
transfers of or incidental to the transfer of a business, not being a business which substantially consists in holding, managing, developing or dealing in land situate in Singapore;
transfers of, or of any interest in, property which by virtue of section 20 is deemed to pass on the death;
transfers of patents or copyrights, or of any movable tangible property except money and securities; and
transfers where either the deceased or the company is acting in the capacity of trustee, factor, agent, receiver or manager.
(6) The benefits referred to in subsection (1) are —
any payments made, whether for consideration or not, to or for the benefit of the deceased, other than the following payments:
dividends in respect of shares in the company;
interest on, and repayments in respect of, money lent to the company;
payments of or on account of purchase money under a bona fide sale, where that purchase money is a capital sum of a fixed amount; and
payments of or on account of royalties, not being royalties limited to cease at the death of the deceased; and
any right in or enjoyment of any land.
(7) In ascertaining for the purposes of this section the value of a benefit —
in the case of a benefit consisting of a payment, a deduction shall be made in respect of any tax already paid or borne by the deceased in respect of that payment; and
the value of a benefit consisting of any right in or enjoyment of land shall be computed by reference to the annual value of that land, due allowance being made in respect of any rent paid by the deceased.
(8) In ascertaining for the purposes of this section the total income for any accounting year of a company, the income of the company from any source shall be computed and the computation shall be made by reference to the actual income for the accounting year and not by reference to the income for any other period subject to the following provisions:
no deduction shall be made in respect of any payment made to or for the benefit of, or any other benefit accorded to, the deceased, except dividends on preference shares and interest on money lent to the company; and
subject to paragraph (a), deductions shall be made for —
taxes paid or borne by the company;
interest on money lent to the company;
dividends on preference shares; and
rents, royalties and other payments by the company.
(9) Where the accounting years falling wholly or partly within the prescribed period do not coincide with the periods for which the accounts of the company are made up, the Commissioner may, for the purpose of ascertaining the total income of the company for an accounting year, divide any of those periods and make such apportionments and aggregations of the income of the company as may be necessary, so, however, that any apportionments so made shall be made in proportion to the number of months or fractions of months in the respective periods for which the apportionment is made.
(10) In this section —
“accounting year” —
in relation to a company which at the time of the death of the deceased person has made up accounts for a period of 12 months ending on a date within the 12 months next preceding the death, means a period of 12 months ending either on that date, or on the same day of the year in any previous year; and
in relation to any other company, means a period of 12 months ending on such date within the 12 months next preceding the death as may be determined by the Commissioner or on the same day of the year in any previous year;
“prescribed period” means the period which —
ends on the date on which the last accounting year ends; and
begins 3 years before that date, or, if the company in question was not then in existence, on the day on which the company came into existence.
—(1) Where, at any time before the death of a person dying after 22nd April 1940, any property in which the deceased had an estate or interest limited to cease at his death was transferred by the deceased and the person interested in the remainder or reversion, directly or indirectly and by one or more transactions, to or for the benefit of a company to which this Part applies, then unless —
the transfer was made before 1st January 1925;
the property was settled property and the interest of the deceased would in any case have failed by reason of his death before it would have become an interest in possession;
the share of the consideration payable to the deceased in respect of the transfer was satisfied otherwise than by an allotment of shares in the company or the grant to him by the company of an annuity or other right to receive periodical payments, not being payments on account of purchase money being a capital sum of fixed amount; or
the deceased had at least 5 years before his death relinquished all interest in the property and had not at any time within those 5 years the possession or enjoyment (otherwise than under a lease or agreement for a lease at a rack rent) of any part thereof or of any benefit secured to him, whether by contract or otherwise, in relation to the relinquishment of his interest therein, and was not at any time within that period in receipt of or entitled to any payment from the company, otherwise than in respect or on account of debentures or loans or purchase money being a capital sum of a fixed amount,
the property shall be deemed for the purposes of estate duty to pass on the death in like manner as if the estate or interest of the deceased therein had continued until the death.
(2) Where the property or any part thereof has been bona fide sold or exchanged by the company during the deceased’s lifetime for full consideration in money or money’s worth, the property or so much thereof as has been so sold or exchanged shall not be deemed to pass on the death, but in lieu thereof the proceeds of the sale or exchange, or, as the case may be, the property which, at the time of death, represents those proceeds shall be deemed so to pass.
(3) In determining the value of any property deemed to pass under this section, there shall be deducted from the principal value thereof —
so much of any sum borrowed by the company as has been applied by the company in the improvement of the property, and has not at the death been repaid by the company;
a sum equal to the capital sum of money paid to the deceased as part of the consideration for the transfer; and
where estate duty is payable in connection with the death on any shares of or debentures in the company, a sum equal to the principal value of such of those shares or debentures as were transferred or allotted to the deceased in consideration of the transfer of the property.
—(1) The estate duty payable in respect of any property which is, by virtue of sections 19 and 20, deemed to pass on the death of any person shall be a debt due from the company concerned to the Government.
(2) The company concerned shall be accountable for any such duty and shall, for the purpose of raising and paying that duty, have all the powers conferred on accountable persons by this Act and, if the duty or any part thereof is paid by the executor of the deceased, it shall be repaid to him by the company.
(3) Where on the death of any person a claim for duty arises by virtue of any of the provisions of sections 19 and 20, the company concerned shall notify the Commissioner of the death of that person, and any company wilfully failing to give such a notification shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $1,000.
(4) The Commissioner may, for the purposes of carrying sections 19, 20 and 22 into effect, require any company to which this Part applies to furnish to him within 2 months copies of such of the balance-sheets and profit and loss or income and expenditure accounts, and such other particulars, as the Commissioner may reasonably require.
(5) If any company fails to comply with subsection (4) —
the company shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $1,000 and every director, manager, secretary or other officer of the company who knowingly and wilfully authorises or permits the failure shall be liable to the like penalty; and
an order may be made against all or any of the directors of the company requiring them to comply with the requirements of the Commissioner.
—(1) Where there pass on the death of any person dying after 22nd April 1940 any shares (not being preference shares) in any company to which this Part applies, then if either —
there is deemed by virtue of the provisions of this Part to pass on the death a sum of money computed by reference to the value of the total assets of the company; or
the control of the company was immediately before the death in the hands of the deceased,
the principal value of those shares for the purposes of estate duty shall not be ascertained in the manner provided by section 24, but shall be ascertained by reference to the value of the total assets of the company.
(2) In cases falling within subsection (1)(a), the value of the total assets of the company shall, for the purposes of this section, be deemed to be reduced by the sum of money therein referred to.
(3) For the purposes of this section, the control of a company shall be deemed to be in the hands of a person if —
by virtue of the shares which he controls he has control of more than half the voting power of the company;
he has by virtue of the provisions in the memorandum of association or articles of the company, or other instrument whatsoever constituting or defining the constitution of the company, the powers of a board of directors or of a governing director or the right to nominate a majority of the directors or the power to veto the appointment of a director, or powers of the like nature; or
he has otherwise the right to receive, or the power to dispose of, more than half of the income of the company.