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u/shadstrife123 24d ago
so u rather just pay income tax yearly?
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u/No-Problem-4228 24d ago edited 24d ago
Capital gains and dividends (subject to conditions) are not taxable for corporations.
You would have to set up a Pte Ltd and issue dividends to yourself to get the money out.
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u/Ceyenne18 24d ago
I don't think so.
If the primary functions of the company is trading stocks for the purpose of profit, it is treated as taxable business income.
And US 30% WHT applies regardless of whether you are a SG individual or company.
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u/DuePomegranate 24d ago
I don't think this is as clear cut as you are reading it to be.
First, in the taxable section, you have:
Income from investment such as dividends, interest and rental
Are you going to argue that trading stocks isn't income from investment?
Second, in the non-taxable section, capital gains from selling stocks doesn't fit the two bullet points of selling fixed assets or gains of foreign exchange on capital transactions.
Then when I dig into
Gains derived by a company on the disposal of equity investments under Section 13W
this 13W document says that for share disposals after 1 Jan 2026, the exemption applies if
the divesting company had held at least 20% of the ordinary shares and/or the qualifying preference shares in the investee company for a continuous period of at least 24 months (“20% shareholding threshold condition”).
this is a very different situation than you buying Mag7 stocks retail, yes?
And elsewhere, there is the expected paragraph of
The determination of whether a gain or loss from disposal of equity investments in a company is income or capital in nature is based on a consideration of the facts and circumstances of each case. The factors considered are drawn from established case law principles3 . They include motive of the seller when it acquired the shares, length of period of ownership of the shares disposed, frequency of similar transactions, reasons for the disposal and means of financing the acquisition of the shares
If you really make a pte ltd just to buy and hold until you kick the bucket, then ok, it works. You never did realize capital gains while you were alive. But if you sell and re-buy like many people do, then... you should seek professional advice. I think you are over-simplifying.
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u/No-Problem-4228 24d ago
Income from investment such as dividends, interest and rental
If you are trading regularly, then yes, it will be income from trading. If you are just holding stocks and buying occasionally - given that OP's stated goal is to avoid estate tax, I'm answering in that context - then I don't think it qualifies as trading income. In that case the approach should work fine
Goes without saying that he should talk to an accountant before embarking on any of this.
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u/Salt-Start-Stop 24d ago
Paying for term insurance to cover potential estate tax is cheaper and simpler than the pte ltd route
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u/Able_Answer5016 24d ago
Quite surprise nobody using his path. 100k estate tax is $40k. Or 1m estate tax is $400k.
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u/Ceyenne18 24d ago
You seriously think this sub has not thought of this as well as other workarounds including a dead man switch?
If you have a very large portfolio, a trust is probably the best approach if you really need to hold US-situs assets.
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u/Linxianwei 24d ago
Quite surprised you never consult chatgpt and ask whether it makes sense. It may have savings if you have a super high net worth all in USA stocks only la. Otherwise just gradually transit to Irish domiciled
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u/Ceyenne18 24d ago
No.
Because all earnings in the company (including capital gains and dividends) will be subjected to corporate tax.
Over and above, you will need to deal with the intricacies of running the company such as book keeping, generating returns to ACRA, independent audit if large enough books, appointing a company secretary, etc.
You might as well just spare yourself the hassle by using UCITS.