Singapore VCC insights

Taxation of Trusts in Singapore: Trustee, Beneficiary, Foreign Trust and the 2028 Sunset

By VCC Editorial Team · Published 15 October 2026

Short answer: Singapore taxes trust income on the trustee at 17% as a final tax, unless resident beneficiaries are entitled to it, in which case they are taxed instead. Foreign trusts and locally administered trusts run by a Singapore trustee company can exempt specified investment income, but neither exemption is open to trusts constituted from 1 January 2028.

This article is general information only and is not legal, tax or investment advice. For matters needing legal advice, we work with a panel of experienced Singapore law firms.

The taxation of trusts in Singapore rests on a short list of provisions in the Income Tax Act 1947 (ITA) that decide one thing: whether tax falls on the trustee, on the beneficiaries or, for qualifying structures, on nobody. For families using a private trust company (PTC) or a foreign trust administered from Singapore, it also decides whether an exemption survives the end of 2027. Sources were checked on 15 October 2026. Licensing of PTCs and the forced heirship shield are covered in our separate guides to the private trust company exemption and to section 90 of the Trustees Act 1967; this article deals only with tax.

How does the taxation of trusts in Singapore work?

By default the trustee is taxed. Section 35(11) of the ITA computes the statutory income of a trustee in the same way as for other taxpayers, and IRAS states that “the income of a trust is the statutory income of the trustee and is chargeable to tax on the trustee”.

Section 43(1)(c) sets the rate for “every other person not resident in Singapore, trustee (other than the trustee of an incapacitated person) and executor” at 17%. IRAS’s e-Tax Guide “Income Tax Treatment of Trusts” (Third Edition, 30 January 2026) adds that the trustee is then treated as a body of persons and is not entitled to the partial tax exemption under section 43(6).

Tax paid by the trustee is final: distributions out of that income “are capital in nature”, in IRAS’s words, and are not taxed again.

When is the beneficiary taxed instead of the trustee?

When a beneficiary resident in Singapore is entitled to the trust income. Section 43(2) allows the corresponding share of the trustee’s statutory income to be “charged at a lower rate or not charged with any tax, as the Comptroller determines”, and IRAS applies full tax transparency in that case.

Entitlement is a question of fact, read from the trust deed; IRAS treats income distributed in the same year it is derived as income the beneficiaries are entitled to. Accumulated income in a discretionary trust usually fails this test.

Transparency carries the character of the income through to the beneficiary. Section 13Q exempts a resident beneficiary’s share if it “would have been exempt from tax under any provision of this Part had it been derived or received directly by the beneficiary rather than the trustee”. Section 43M carries through concessionary rates and section 50B carries through foreign tax credits.

Transparency does not apply to trade or business income of the trustee (sections 43(2A)(c) and 35(16)(c)), income to which no beneficiary is entitled, or income of non-resident beneficiaries not required to file returns. The trustee then bears a final tax.

Scenario	Who is taxed	Rate or treatment	Distribution in beneficiary’s hands
Trustee carries on a trade or business	Trustee	Final tax at 17% (s 35(11), s 43(1)(c))	Capital, not taxed
Non-trade income, resident beneficiary entitled	Beneficiary	Transparency under s 43(2); exemptions, concessions and credits flow through (ss 13Q, 43M, 50B)	Retains character of underlying income
Non-trade income, non-resident beneficiary entitled	Trustee	Final tax at 17%	Capital, not taxed
Non-trade income, no beneficiary entitled (accumulated)	Trustee	Final tax at 17%	Capital, not taxed
Settlement for unmarried minor relative, or revocable in favour of settlor or spouse	Settlor	Deemed settlor’s income (s 31)	Settlor declares in own return

When is trust income taxed on the settlor?

Section 31 of the ITA deems settlement income to be the settlor’s in two situations, and the settlor must declare it in his or her own return.

The first is a settlement for a relative who, at the start of the year of assessment, is unmarried and under 21, while the settlor is alive. “Relative” in section 31(8) covers a wife, grandchild, child, brother, sister, uncle, aunt, nephew, niece or cousin. The second is a settlement that any person may revoke so that the settlor or the settlor’s spouse becomes beneficially entitled to the property or its income. IRAS’s examples show that a power returning only the income to the settlor or spouse is still caught.

A revocable trust for young children, settled by a principal who is or will become Singapore resident, can therefore push the income back onto the principal’s personal return.

What is the foreign trust exemption under section 13F?

It exempts specified investment income of a qualifying foreign trust, and of its offshore holding company, where the trust is administered by a trustee company in Singapore. The detail sits in the Income Tax (Exemption of Income of Foreign Trusts) Regulations (Rg 24), made under what is now section 13F (section 13G before the 2020 Revised Edition).

Under regulation 2A, a written trust is a foreign trust if every settlor and every beneficiary is one of the following: an individual who is neither a Singapore citizen nor resident; a “foreign company” (not incorporated or resident in Singapore and, for a company with 50 or fewer shareholders, wholly owned by non-citizen non-residents); another non-resident person not constituted under Singapore law; or the trustee of another foreign trust.

The exemption covers “specified income from designated investments” derived by the foreign trust or by an “eligible holding company”. That company must be incorporated outside Singapore, limited to trading or investing for the trust, wholly owned by the trustees and must not claim treaty relief or unilateral tax credits. The trustee company must submit an annual declaration that the conditions are met (regulation 3(2)) and keep records of every settlor and beneficiary (regulation 6). The Schedule of specified income was most recently amended by S 488/2026.

Three conditions cause most practical problems:

• Corporate settlors and beneficiaries. Regulation 5 switches the exemption off where any settlor or beneficiary is a company that has a Singapore permanent establishment, carries on business anywhere (from year of assessment 2021), owns more than 20% of a Singapore-incorporated company, or is 20% owned by such a company, unless the Minister or an authorised body approves.
• A settlor who moves to Singapore. Under regulation 2A(2), the trust stays foreign only if the settlor adds no new assets after becoming a citizen or resident, takes no benefit and does not appoint, revoke or vary in favour of Singapore citizens or residents. Breach lets the Comptroller reassess past exempt income (regulation 7).
• Beneficiaries who become resident. Distributions to Singapore citizen or resident beneficiaries must stay below 20% of cumulative distributions, and their entitlement below 20% of trust assets.

Section 13F(2) exempts a non-resident beneficiary’s share of the exempt income. Families relocating a principal to Singapore should read these rules alongside our note on Singapore tax residence.

What does the locally administered trust exemption cover?

Section 13N exempts “relevant income” of a prescribed locally administered trust and its holding company, and the beneficiaries’ share of that income. It is the domestic counterpart to section 13F and does not require foreign settlors.

A “locally-administered trust” is one administered by a trustee company in Singapore where every settlor is an individual, every beneficiary is an individual or a charity, and at least one beneficiary is not a settlor. Regulation 2 of the 2007 Regulations narrows this to an eligible trust that is created in writing, does not arise from a will or an estate administration, and does not hold assets transferred, other than on market terms, from a person carrying on business in Singapore whose income from them was taxable.

“Relevant income” is narrower than under section 13F. It means income of the kinds listed in section 13(1)(zd) to (zl), such as interest on deposits with approved banks, interest from debt securities and certain unit trust and real estate investment trust distributions, which an individual would receive tax-free, plus foreign-sourced income received in Singapore of the kind in section 13(7A). In practice it stops a Singapore-resident family losing, by using a trust, exemptions it would have had holding the investments personally.

Why does 1 January 2028 matter for Singapore trusts?

Because both exemptions close to new structures on that date. Amendments made by Act 35 of 2024, in force from 27 November 2024, provide that section 13F and section 13N do not apply to a trust constituted, or a company incorporated, on or after 1 January 2028.

Existing structures are grandfathered only if they qualify in the basis period in which 31 December 2027 falls. From basis periods beginning on or after 1 January 2028, a trust that fails the requirements in any year, or whose trustee company breaches the regulations, loses the exemption for that year and every later year, even if it complies again.

The practical sequence is:

1. Confirm by mid-2027 whether a new trust is needed, because a trust constituted on 1 January 2028 cannot enter either regime.
2. Check every settlor, beneficiary and corporate party against regulation 2A and regulation 5 of Rg 24, or the section 13N definitions, before settlement.
3. Appoint a Singapore trustee company, licensed or a licence-exempt PTC, to administer the trust.
4. Ensure the trust qualifies throughout the basis period in which 31 December 2027 falls, including the annual declaration for foreign trusts.
5. From 2028, monitor every year: a single lapse, such as a beneficiary relocating to Singapore and receiving more than 20% of distributions, ends the exemption permanently.

How are trustee companies and private trust companies taxed?

A trustee company’s own fee income is taxed like any company’s, at 17% under section 43(1)(a). Trust income it holds as trustee is assessed separately under the rules above.

Section 43G(2) defines “trustee company” as a licensed trust company under the Trust Companies Act 2005 “or that is exempted under that Act from holding a trust business licence”. Sections 13F and 13N borrow that definition, so a PTC exempt under the Trust Companies (Exemption) Regulations can be the Singapore trustee company that administers a qualifying foreign or locally administered trust.

Section 43G also contains the approved trustee company concession, a 10% rate on prescribed income of an approved trustee company. It is closed: section 43G(5) provides that no trustee company may be approved on or after 1 April 2016, and approvals were limited to a maximum of ten years.

How do 13O, 13U and section 10L interact with a trust?

A trust can hold an incentivised fund, but the fund, not the trust, carries the incentive.

Section 13O is limited to a company incorporated and resident in Singapore, so a family trust typically holds the shares of the 13O company rather than being the approved vehicle itself. Section 13U is wider: its “approved person” expressly includes “any trustee of an approved trust fund”, so a trust can itself be the approved vehicle. Section 13Q(2)(h) then disapplies the beneficiary flow-through exemption for income of a 13U-approved trust fund, because that income is governed by section 13U instead. Conditions are covered in our guide to the 13O and 13U annual evidence file.

Section 10L, which taxes foreign disposal gains received in Singapore by an entity of a “relevant group” unless an exclusion such as the excluded entity rules applies, covers sales on or after 1 January 2024. Its definition of “entity” expressly includes “a trust”. Whether a trust is caught depends on the group test in section 10L(5), which turns on inclusion in consolidated financial statements and on a multi-jurisdictional footprint. The carve-out list in section 10L(8)(b) does not mention sections 13F, 13N, 13O or 13U, and section 10L(2)(b) applies even where gains “would otherwise be exempt”. Consolidated, cross-border structures should be tested separately.

What must a trustee file with IRAS?

A trustee files Form T, the income tax return for estates and trusts, by 15 April each year.

IRAS states that Form T must be submitted “by 15 Apr each year” by the trustee of a private trust or settlement. A new trust first obtains a tax reference number through IRAS’s online form, and IRAS notes that “You cannot file a Form T return without an assigned Tax Ref No.” A trustee who does not receive IRAS’s notification letter must still file. Trustees of foreign trusts relying on section 13F must also make the annual declaration under regulation 3(2) of Rg 24. Common Reporting Standard reporting is separate; see our guide to CRS 2.0 and CARF.

Frequently asked questions

Are distributions from a Singapore trust taxable to the beneficiary?

Not if the trustee has already paid the final 17% tax; IRAS treats those distributions as capital. If a resident beneficiary is entitled to the income, the beneficiary is taxed instead and the trustee is not.

Can a private trust company administer a section 13F foreign trust?

Yes. Section 43G(2) includes licence-exempt companies in “trustee company”, and sections 13F and 13N adopt that definition. The trust and its parties must still meet the regulations.

Can I still set up a foreign trust under section 13F?

Yes, until 31 December 2027. A trust constituted on or after 1 January 2028 cannot use the exemption, and existing trusts must qualify in the basis period in which 31 December 2027 falls.

Does Singapore have estate duty on trust assets?

No. Estate duty was abolished for deaths on or after 15 February 2008; see our note on whether Singapore has estate tax.

Sources

• IRAS e-Tax Guide: Income Tax Treatment of Trusts (Third Edition), 30 January 2026
• Income Tax Act 1947, section 13F, Singapore Statutes Online
• Income Tax (Exemption of Income of Foreign Trusts) Regulations, Singapore Statutes Online
• Income Tax (Exemption of Income of Locally Administered Trust) Regulations 2007, Singapore Statutes Online
• IRAS: Form T

Raffles Corporate Services helps families structure and maintain the companies that sit inside a trust, including private trust companies, holding companies and VCCs, alongside VCC incorporation, family office set-up and ongoing compliance, working with licensed trust companies and our panel of Singapore law firms. Our affiliate Singapore Secretary Services keeps the statutory registers of PTCs and holding companies. Email hello@rafflescorporateservices.com or Call/SMS/WhatsApp +65 8501 7133, or visit Raffles Corporate Services.

Last reviewed: 15 October 2026. The Editorial Team, Variable Capital Companies Act.