SINGAPORE Trends and Developments Contributed by: Lee Woon Shiu and Catherine Cheung, DBS Private Bank
nesses who want to retain control and management. For UHNW families who continue to own and manage a family business enterprise, PTCs are also optimal in enabling the families to integrate the key provisions of their family constitution in the articles of the PTCs such that key family governance provisions no longer remain solely as aspirational signposts but rather as legally binding guardrails across multiple generations Using trusts to purchase properties for their children continues to be an attractive option for UHNWIs, despite a hefty 65% additional buyer’s stamp duty (ABSD) levied on the transfer of residential proper - ties into living trusts. The possibility of ABSD refunds under certain conditions further contributes to their appeal. Philanthropic trends in Singapore With younger generations becoming more involved in family wealth management, there is increased accept - ance of the concept of family capital extending beyond financial capital to include a family’s human capital, intellectual capital and social capital. Closely associ - ated with this is the awareness of “impact-investing”, with many investors prioritising sustainable invest - ments with ESG considerations for their portfolios. Without a doubt, the increasing concentration of wealth in Singapore has contributed to a rise in phil - anthropic activities, resulting in philanthropy becom - ing a trending topic in the wealth management space. With the aim of making Singapore a philanthropic hub in Asia, building upon this momentum and encour - aging more family offices to channel their regional and global philanthropic efforts through Singapore, the government implemented the Philanthropy Tax Incentive Scheme (PTIS) in January 2024. The PTIS is designed to attract philanthropic activities to Singa - pore and offers a 100% tax deduction (capped at 40% of the donor’s statutory income) for overseas dona - tions made through qualifying local intermediaries. The typical legal structures used for charitable means and non-profit organisations in Singapore are: of UHNW families. Trusts for real estate
• a company limited by guarantee (CLG); • a society; or • a charitable trust.
CLGs are often established to own a foreign law- governed purpose trust within an SFO-based struc - ture. Charitable trusts are a popular structure among wealthy families for the purpose of charity. Donor-advised funds (DAFs) have become increas - ingly popular in recent years. A DAF is essentially a charitable savings account where donors contribute assets (cash, stocks, etc) to a fund managed by a sponsoring organisation (like a community foundation or a financial institution). The key advantage is that donors receive an immediate tax deduction for their fund or asset contribution to the DAF, and can recom - mend grants to eligible charities from the fund. This helps to facilitate strategic distributions to charities of the donor’s choice over time. The choice of vehicle depends on the donor’s giving journey, future plans and purpose. For donors with taxable Singapore income, tax deductions are avail - able for various donations, including: • a 250% deduction for local donations to Institu - tions of Public Character (IPCs); and • a 100% deduction for overseas donations under the Overseas Humanitarian Aid Scheme (OHAS) and the PTIS. Family offices can benefit from both the OHAS and the PTIS. According to estimates by Soristic (a social impact consultancy), donations by Singapore-registered pri - vately funded philanthropic organisations reached SGD431 million in 2023, nearly double the 2022 total. Many family offices are allocating resources to philan - thropy, through either registered charities or privately managed funds. The Philanthropy Asia Summit and Ecosperity Week were two events that showcased collaborative efforts, knowledge sharing and partnerships to address global challenges in Asia, such as climate change, educa - tion and health. Given Singapore’s growing role in
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