ESTATE DUTY (AMENDMENT) BILL

Order for Second Reading read.

The Minister for Finance (Dr Richard Hu Tsu Tau): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

I have announced in the FY96 Budget Statement several changes to the structure of estate duty to allow for the effects of inflation and rising asset prices over the years since the duty was last revised in 1984.

Prior to the announcement, estate duty was structured in two tiers: the first $10 million value of estate chargeable duty was taxed at 5% and all subsequent amounts at 10%. Exemption was given to the first $3 million of all residential properties and the first $500,000 of all movable assets, including Central Provident Fund balances. Central Provident Fund balances in excess of $500,000 were also exempt.

To compensate for the effects of inflation since 1984, the Estate Duty (Amendment) Bill 1996 seeks to do the following:

(1) to raise the value of the estate on which the first tier rate of tax of 5% would apply to $12 million.

(2) to raise the exemption limits for residential properties and movable assets (including Central Provident Fund balances) to $9 million and $600,000 respectively; and

(3) to exempt Central Provident Fund balances in excess of $600,000 from duty.

Clauses 2 and 4 of the Estate Duty (Amendment) Bill will provide for the increase in the value of the estate which the first tier rate of 5% would apply from the previous $10 million to $12 million. Clause 3 of the Amendment Bill will insert a new subsection to raise the exemption limits for residential properties and movable assets (including Central Provident Fund balances) to $9 million and $600,000 respectively. These changes would apply to persons who pass away on or after 28th February 1996.

Sir, I beg to move.

Question proposed.

Mr Chiam See Tong: Sir, I have a question for the Minister. Under these new amendments, how much would the Government be collecting a year in respect of estate duty for immovable property and movable property?

Dr Richard Hu Tsu Tau: Sir, I do not have the figures readily available. If the Member were to submit the questions, I will answer them.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Dr Richard Hu Tsu Tau.].

Bill considered in Committee; reported without amendment; read a Third time and passed.