Credit: IRAS, CPF Board
A living trust is “a legal document or a trust, created during an individual’s lifetime (the trustor or grantor) where a designated person, for example the trustee, is given responsibility for managing that individual’s assets for the benefit of the eventual beneficiary.
A trust structure involves a parent or grandparent buying a home for the benefit of a child or grandchild who could be a minor. Banks cannot lend to a minor (under the age of 21), the trustee would need to purchase in cash, and in effect, is irrevocably giving the sums of money to the beneficiary. These trusts are typically created for children under the age of 21 (minors) as they are probably not liable to pay ABSD if they are Singapore citizens and do not own a residential property.
Transferring residential real estate to a living trust would still be attractive for those who have the means. Trusts are set up as a vehicle for estate planning and the new ABSD (Trust) does not change that.
A trustee may apply for a refund of the ABSD (Trust) if certain conditions are met - namely, that all beneficial owners are identifiable, that the beneficial ownership has been vested in all of them and cannot be revoked, varied or subject to subsequent conditions. The application must be made within six months after the instrument is executed.
That said, consult an experience lawyer for all property conveyancing and tax remission.
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