- Philanthropic donors will soon be able to benefit from a tax incentive, courtesy of the Singapore government.
- The Philanthropy Tax Incentive Scheme for Family Offices will allow donors to claim a 100% tax deduction on overseas donations.
- Wealthy individuals will potentially benefit from sending money abroad and making generous charitable donations under the new incentive.
Donors with family offices based in Singapore will soon be able to benefit from a new tax incentive, according to a report from the Business Times.
The Philanthropy Tax Incentive Scheme for Family Offices will enable donors to claim a 100% tax deduction on overseas donations.
The Philanthropy Tax Incentive Scheme for Family Offices will potentially encourage donors to send money overseas and high-net-worth individuals looking to transfer money overseas could potentially take advantage of this new announcement.
The incentive applies specifically to overseas donations made through qualifying local intermediaries. Wealthy donors can claim a 100% deduction, but this is capped at 40% of their statutory income.
There are other hoops that wealthy philanthropic individuals will have to jump through in order to benefit from the new incentive.
For example, donors will need to have a fund under the Monetary Authority of Singapore’s (MAS) 13O or 13U schemes. Overseas donors will also need to have an incremental business spend of at least S$200,000.
According to Singapore’s Finance Minister Lawrence Wong, the government plans to make tax adjustments throughout 2023.
These adjustments are designed to help support businesses, increase the country’s competitiveness and improve its tax system.
When asked about the announcement, Valerie Wu, a tax and private wealth expert from Pinsent Masons MPillay, suggested that most of its ultra-high-net-worth clients have “philanthropic causes close to their hearts”.
She went on to say that the “new tax incentive will help fulfil the philanthropic visions of these clients, making Singapore an even more attractive destination for wealth management”.
Singapore is looking to present itself as a hub for philanthropy and these changes could present interesting opportunities for UK-based ultra-high and high-net-worth individuals looking to make significant charitable contributions abroad.
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