Zhao Hui Fang v Commissioner of Stamp Duties: ABSD on Charitable Trust Property
In Zhao Hui Fang and others v Commissioner of Stamp Duties, the High Court of Singapore addressed whether Additional Buyer's Stamp Duty (ABSD) was chargeable on a property conveyance to trustees of the Chew How Teck Foundation, a registered charity. The court, presided over by Aedit Abdullah JC, ruled in favor of the applicants, holding that ABSD did not apply because the property was held in a charitable purpose trust without any identifiable beneficial owner. The court determined that Mdm Zhao Hui Fang only had a personal license to reside in the property, not a proprietary life interest. The claim was filed under s 40 of the Stamp Duties Act.
1. Case Overview
1.1 Court
High Court of Singapore1.2 Outcome
Appeal Allowed
1.3 Case Type
Civil
1.4 Judgment Type
Judgment Reserved
1.5 Jurisdiction
Singapore
1.6 Description
The High Court held that ABSD is not chargeable on property conveyed to trustees of a charitable trust, as there is no identifiable beneficial owner.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Commissioner of Stamp Duties | Respondent | Government Agency | Appeal Dismissed | Lost | Li Yourui Charles of Inland Revenue Authority of Singapore (Law Division) Julia Mohamed of Inland Revenue Authority of Singapore (Law Division) |
| Zhao Hui Fang | Applicant | Individual | Appeal Allowed | Won | |
| Chew Hwee Ming | Applicant | Individual | Appeal Allowed | Won | |
| Sat Pal Khattar | Applicant | Individual | Appeal Allowed | Won | |
| Jerry Lee Kian Eng | Applicant | Individual | Appeal Allowed | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Aedit Abdullah | Judicial Commissioner | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Li Yourui Charles | Inland Revenue Authority of Singapore (Law Division) |
| Julia Mohamed | Inland Revenue Authority of Singapore (Law Division) |
| Joanna Yap Hui Min | KhattarWong LLP |
| Lam Zhen Guang | KhattarWong LLP |
| Rebecca Liu Maeyann | KhattarWong LLP |
4. Facts
- The Applicants are trustees of the Chew How Teck Foundation, a registered charity in Singapore.
- The Commissioner of Stamp Duties assessed Additional Buyer’s Stamp Duty (ABSD) on a conveyance of property to the Applicants as trustees.
- The property was purchased using proceeds from the sale of another property, as per a High Court order.
- The constituting deed of the Foundation outlines its charitable objects, including medical research and relief of poverty.
- The Settlor's will provided a life interest in a property to his wife, Mdm Zhao Hui Fang, which was later substituted with the Goodwood Property.
- The Commissioner of Charities authorized the purchase of the Goodwood Property.
- The Applicants paid the assessed ABSD and late payment penalty under protest.
5. Formal Citations
- Zhao Hui Fang and others v Commissioner of Stamp Duties, Originating Summons No 269 of 2016, [2017] SGHC 105
6. Timeline
| Date | Event |
|---|---|
| Trust Deed for Chew How Teck Foundation established | |
| Settlor left a will | |
| Grant of Probate issued to Chew Hwee Ming and Sat Pal Khattar | |
| High Court granted an order allowing the Executors to sell the Chee Hoon Property and purchase the Goodwood Property | |
| Purchase of the Goodwood Property was authorized by the Commissioner of Charities | |
| SPA for the purchase of the Goodwood Property was executed | |
| SPA was stamped | |
| Applicants wrote to the Respondent arguing that ABSD should not be charged on the SPA | |
| Respondent replied that ABSD was payable | |
| Applicants paid the assessed ABSD and late payment penalty under protest | |
| Respondent informed the Applicants that the assessment of ABSD was maintained | |
| Applicants filed an appeal to the High Court | |
| Hearing date | |
| Hearing date | |
| Hearing date | |
| Judgment Reserved |
7. Legal Issues
- Chargeability of Additional Buyer’s Stamp Duty (ABSD)
- Outcome: The court held that ABSD was not chargeable on the SPA because the Goodwood Property is property of a charitable purpose trust under which the beneficial interest of trust assets is suspended.
- Category: Substantive
- Beneficial Ownership of Property Held Under a Charitable Trust
- Outcome: The court held that neither the persons who factually benefit from the charitable objects of the Foundation, nor the Applicants as trustees of the Foundation, nor the public, is the beneficial owner of property held under a charitable purpose trust.
- Category: Substantive
- Nature of Mdm Zhao’s Interest Under the Will
- Outcome: The court held that Mdm Zhao is not the holder of a proprietary life interest in the Goodwood Property under the Will, but rather, a mere personal licensee with permission to reside rent-free in the property for her lifetime.
- Category: Substantive
- Definition of 'Entity' under Art 3(1) of the First Schedule of the SDA
- Outcome: The court held that the Applicants as trustees of a charitable purpose trust are not an 'entity' within the meaning of Art 3(bf)(viii) of the First Schedule.
- Category: Substantive
8. Remedies Sought
- Refund of Additional Buyer’s Stamp Duty (ABSD) and late payment penalty
9. Cause of Actions
- Appeal against assessment of Additional Buyer’s Stamp Duty (ABSD)
10. Practice Areas
- Tax Law
- Trust Law
11. Industries
- No industries specified
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Khoo Jeffrey v Life-Bible-Presbyterian Church | High Court | Yes | [2011] 3 SLR 500 | Singapore | Cited to support the argument that registration as a charity does not give the Foundation an institutional form. |
| The Royal Bank of Scotland NV (formerly known as ABN Amro Bank NV) and others v TT International Ltd (nTan Corporate Advisory Pte Ltd and others, other parties) and another appeal | Court of Appeal | Yes | [2015] 5 SLR 1104 | Singapore | Cited for the principles of issue estoppel and cause of action estoppel. |
| Foo Jee Seng v Foo Jhee Tuang | Court of Appeal | Yes | [2012] 4 SLR 33 | Singapore | Cited for the principle that the testator's intention must be derived from the wording of the will itself. |
| Morss v Morss | Unknown | Yes | [1972] 1 All ER 1121 | England | Cited for the principle that the phrase 'made available' does not confer any proprietary right in the subject, but rather grants a mere license to use as residence. |
| Re Hadjee Yousof | High Court | Yes | [1961] 1 MLJ 267 | Malaysia | Cited to support the argument that the testator's wife and children had a mere personal license to reside rent-free until the date of distribution. |
| Hongkong Bank Trustee (Singapore) Ltd v Tan Farrer and others | High Court | Yes | [1988] 1 SLR(R) 53 | Singapore | Cited for the fundamental principle that no trust which is not a charitable trust can be valid if it has no beneficiary. |
| Koh Lau Keow and others v Attorney-General | High Court | Yes | [2013] 4 SLR 491 | Singapore | Cited for the principle that charitable trusts fall within a narrow exception of trusts that are not subject to the requirements of certainty of objects or the beneficiary principle. |
| Goi Wang Firn (Ni Wanfen) and others v Chee Kow Ngee Sing (Pte) Ltd | High Court | Yes | [2015] 1 SLR 1049 | Singapore | Cited for the principle that charitable trusts fall within a narrow exception of trusts that are not subject to the requirements of certainty of objects or the beneficiary principle. |
| Hauxwell v Barton-on-Humber UDC | Chancery Division | Yes | [1974] 1 Ch 432 | England and Wales | Cited for the principle that individuals who may factually benefit from a charitable trust do not have standing to enforce that trust. |
| Glenn v Federal Commissioner of Land Tax | High Court of Australia | Yes | [1915] 20 CLR 490 | Australia | Cited by the Respondent for the proposition that where no person can be identified as entitled to the equitable estate in land, the trustee is entitled to the whole estate both legal and equitable. |
| CPT Custodian Pty Ltd v Commissioner of State Revenue of the State of Victoria | High Court of Australia | Yes | [2005] 221 ALR 96 | Australia | Cited by the Respondent for the proposition that where no person can be identified as entitled to the equitable estate in land, the trustee is entitled to the whole estate both legal and equitable. |
| Lend Lease Funds Management Ltd v Commissioner of State Revenue | Supreme Court of Victoria | Yes | [2009] VSC 360 | Australia | Cited by the Respondent for the proposition that where no person can be identified as entitled to the equitable estate in land, the trustee is entitled to the whole estate both legal and equitable. |
| Saunders v Vautier | Rolls Court | Yes | [1841] 4 Beav 115 | England and Wales | Cited to show that the rule in Saunders v Vautier is not applicable to these factual beneficiaries. |
| Power Knight Pte Ltd v Natural Fuel Pte Ltd (in compulsory liquidation) and others | High Court | Yes | [2010] 3 SLR 82 | Singapore | Cited for the proposition that where the whole legal and beneficial ownership of an asset resides in the same party, it might not be appropriate to speak of a trust at all. |
| Commissioner of Stamp Duty v Livingston | Privy Council | Yes | [1965] AC 694 | Australia | Cited for the nature of rights of a residuary legatee as against the executor of an un-administered estate. |
| Koh Lau Keow and others v Attorney-General | Court of Appeal | Yes | [2014] 2 SLR 1165 | Singapore | Cited for the principle that the beneficial interest in a charitable purpose trust is simply in suspense and not extant. |
| ABB v Comptroller of Income Tax | High Court | Yes | [2010] 2 SLR 837 | Singapore | Cited for the principle that the purposive approach to statutory construction governs the interpretation of tax statutes. |
| ACC v Comptroller of Income Tax | High Court | Yes | [2011] 1 SLR 1217 | Singapore | Cited for the principle that the purposive approach to statutory construction governs the interpretation of tax statutes. |
| Alcan (NT) Alumina Pty Ltd v Commissioners of Territory Revenue | High Court of Australia | Yes | [2009] 239 CLR 27 | Australia | Cited for the principle that tax statutes do not form a class of their own to which different rules of construction apply. |
| W T Ramsay Ltd v Inland Revenue Commissioners | House of Lords | Yes | [1982] AC 300 | United Kingdom | Cited for the principle that a subject is only to be taxed on clear words, not on intendment or on the equity of an Act. |
| Low Guang Hong David and others v Suryono Wino Goei | High Court | Yes | [2012] 3 SLR 185 | Singapore | Cited for the principle that the phrase 'means… and includes…' may serve two purposes. |
| Pan-United Marine Ltd v Chief Assessor | High Court | Yes | [2008] 3 SLR 569 | Singapore | Cited for the principle that the phrase 'means… and includes…' may serve two purposes. |
| JD Ltd v Comptroller of Income Tax | Court of Appeal | Yes | [2006] 1 SLR 484 | Singapore | Cited for the principle that decisions from foreign jurisdictions should be treated with the appropriate degree of caution, especially where the wording of the foreign tax legislation is not identical with or not in pari materia with the local equivalent. |
| Comptroller of Income Tax v GE Pacific Pte Ltd | High Court | Yes | [1994] 2 SLR(R) 948 | Singapore | Cited for the principle that practice is not law. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Stamp Duties Act (Cap 312, 2006 Rev Ed) | Singapore |
| Stamp Duties Act (Cap 312, 2006 Rev Ed) s 4(1) | Singapore |
| Stamp Duties Act (Cap 312, 2006 Rev Ed) s 40 | Singapore |
| Stamp Duties Act (Cap 312, 2006 Rev Ed) s 22(1) | Singapore |
| Stamp Duties Act (Cap 312, 2006 Rev Ed) First Schedule Art 3 | Singapore |
| Stamp Duties Act (Cap 312, 2006 Rev Ed) First Schedule Art 3(bf) | Singapore |
| Stamp Duties Act (Cap 312, 2006 Rev Ed) First Schedule Art 3(bf)(viii) | Singapore |
| Stamp Duties Act (Cap 312, 2006 Rev Ed) First Schedule Art 3(1) | Singapore |
| Stamp Duties Act (Cap 312, 2006 Rev Ed) First Schedule Art 3(2)(d) | Singapore |
| Trustees Act (Cap 337, 2005 Rev Ed) s 64 | Singapore |
| Interpretation Act (Cap 1, 1997 Rev Ed) s 9A | Singapore |
| Interpretation Act (Cap 1, 1997 Rev Ed) s 9A(3) | Singapore |
| Interpretation Act (Cap 1, 1997 Rev Ed) s 2(1) | Singapore |
| Charities Act (Cap 37, 2007 Rev Ed) | Singapore |
| Government Proceedings Act (Cap 121, 1985 Rev Ed) | Singapore |
| Conveyancing and Law of Property Act (Cap 61, 1994 Rev Ed) s 51 | Singapore |
| Business Trusts Act (Cap 31A, 2005 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Additional Buyer’s Stamp Duty
- Charitable Trust
- Beneficial Owner
- Trustees
- Entity
- Life Interest
- Personal Licence
- Goodwood Property
- Chew How Teck Foundation
- Commissioner of Stamp Duties
15.2 Keywords
- Additional Buyer’s Stamp Duty
- ABSD
- Charitable Trust
- Beneficial Ownership
- Singapore
- Property Law
- Revenue Law
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Stamp duties | 95 |
| Revenue Law | 90 |
| Additional Buyer’s Stamp Duties | 90 |
| Taxation | 80 |
| Trust Law | 75 |
| Charitable purpose trusts | 70 |
| Beneficiary principle | 65 |
| Statutory Interpretation | 60 |
| Estate Planning | 30 |
| Constitutional Law | 10 |
16. Subjects
- Revenue Law
- Stamp Duties
- Trusts
- Charitable Purpose Trusts
- Statutory Interpretation