Jaclyn Choon
Director
Precepts Trustee Ltd & Precepts
Corporate Services Pte Ltd
IBFQ, AEPP®
Background
Wealth management has evolved significantly over the years, with affluent families seeking sophisticated solutions to preserve and grow their assets across generations. In Singapore, the introduction of Section 13O by the Inland Revenue Authority of Singapore (IRAS) has provided a regulatory framework for the establishment of single family offices (SFOs), offering a structured approach to wealth management tailored to the needs of affluent families.
Section 13O Tax Incentives
Section 13O, introduced in 2019, offers tax incentives to qualifying SFOs established in Singapore. Under this provision, SFOs are eligible for tax exemption on specified income derived from designated investments.
The tax incentives provided under Section 13O have enhanced Singapore’s appeal as a preferred destination for establishing SFOs, attracting HNWIs and UHNWIs seeking to optimize tax efficiency and preserve wealth. The minimum fund size for the 13O scheme is now S$20 million at the point of application and throughout the incentive period.
The minimum fund size for the 13U Scheme remains unchanged at S$50 million at the point of application and throughout the incentive period.
Single Family Office
SFOs offer affluent families a structured approach to wealth management, encompassing investment management, estate planning, tax optimisation, and philanthropy, tailored to their specific needs and objectives.
To optimise the benefits of an SFO and fortify its longterm sustainability, integrating it within a trust structure can be a game-changer. Using a trust to hold a SFO is a strategic move for affluent families seeking to enhance wealth management and preserve their legacy.
Succession Planning
In the realm of wealth management, succession planning stands as a pivotal strategy for affluent individuals and families with substantial assets of S$20 million funds. Succession Planning can play a vital role in facilitating a seamless transfer of wealth to heirs and beneficiaries. Through careful structuring of the trust, individuals can avoid probate, and ensure that their assets are distributed according to their wishes. This can help preserve family wealth and provide for future generations in a tax-efficient manner.
Trust-based SFOs
Beyond financial considerations, trusts provide a platform for preserving family values, traditions, and philanthropic goals. By articulating these principles within the trust document, families can ensure that their legacy endures for generations to come. Trust-based SFOs can support charitable endeavours, educational initiatives, and other philanthropic activities in alignment with the family’s values and objectives. This creates a lasting impact on society while instilling a sense of purpose and responsibility among family members.
This article was first published in our newsletter, The Custodian Issue 29. Click here to access our latest newsletter
