Tax Filing Reminder!

Tax season is ending soon so here’s a quick reminder to do the following by 18 April 2018:

  • Access IRAS myTax portal and open your form B/B1
  • Check your employment income and adjust if necessary. If your employer is on the Auto-Inclusion Scheme, your employment income data should already be updated in the system.
  • Investors in Crowdlending platforms like Moolahsense should remember to include their interest income in the filing.
  • Check your personal reliefs and other deductions like donations. If you need assistance on which reliefs you can claim, I refer you to part 1 and part 4 of my tax planning series.
  • Reflect on your current tax position and consider if you need to perform further tax planning for 2018. For more information, I refer you to part 4 as well.
  • Once happy, file and you’re done!

Being tax efficient is not evading tax. It’s about claiming and paying your dues accurately. I’ll leave you guys with the last infographic provided by IRAS regarding tax season 2018 for your reference.

Your 5-Minute Guide to Tax Season 2018 (Final)-1.jpg

Happy Hunting,



Personal tax planning 4 – bringing it all together

Tax planning considerations

Welcome to the final part of my basic personal income tax planning series! In this series of posts I hope to cover the following topics:

  1. Tax reliefs
  2. CPF Cash Top Up
  3. Supplementary Retirement Scheme (SRS)
  4. Bringing it all together – How to best utilise these reliefs to your advantage

In this part, I will cover the considerations and general strategy I use to mitigate my personal tax bill.

General Strategy

The general strategy for tax planning is as follows:

  1. Maximise your family support reliefs
  2. Once those are maxed out, consider if further tax mitigation is necessary using retirement support reliefs.

The reason for this is that family support reliefs are always there every year as long as you qualify. If you don’t claim the reliefs, it is wasted. As for retirement support reliefs, there are real downsides to using those reliefs as identified in part 2 & 3. This mainly due to the long lock-up periods and irreversible nature of contributions. As such, you should only use these reliefs if you are fine with the money being locked away and that you are in a high tax bracket.

Family Support Reliefs

1) Maximising your family support reliefs

As talked about in part 1, knowledge is important in maximising your family support reliefs. A quick recap of common reliefs that you should consider claiming:

Reliefs everyone should be claiming

*Note that Working Mother Child Relief and Grandparent Caregiver Relief is only available to women

As a side point, for married women with children, you should definitely at least claim the working mother child relief as this is the government’s most generous tax relief at the moment, whereby you can potentially claim up to 100% of your earned income (depending on the number of children you have and whether you hit the $80,000 personal relief cap).

2) Allocation of family support reliefs

Some of the family support reliefs can be shared with your siblings / spouse, as such there is some potential for tax planning. From a tax efficiency standpoint, it is best to allocate reliefs to taxpayers who are in a higher tax bracket than taxpayers in a low tax bracket. (To me, low tax bracket refers to if your annual taxable income is $80,000 or less, as incrementally you pay a rate of 11.5% beyond that income level) This is because each dollar of tax relief gives rise to more tax savings in the hands of a taxpayer in a high tax bracket.

Tax efficiency

Of course, I understand there is a question of equality as you and your siblings/spouse may contribute equally to supporting your parents. As such, you might think that everyone should split the relief equally. All in all, this is something you should discuss with your family to achieve the most tax efficient and satisfactory outcome to all parties.

Retirement support reliefs

There are generally 4 considerations to make before deciding on which relief (CPF Cash top-up or SRS) to contribute towards:

  1. Availability of funds to lock-up
  2. Your incremental tax rate based on your taxable income after family support reliefs
  3. Your risk appetite
  4. The objective you hope to achieve with your contribution

1) Availability of funds to lock-up

You should only consider these reliefs if you are willing to not touch these funds for decades. If you foresee yourself needing the money for upcoming expenditure like a home or a wedding, you should not be considering contributions to your CPF or SRS.

2) Your incremental tax rate

Similar to allocating your family support reliefs amongst your family, you should consider if you are in a high or low tax bracket before contributing. If you are in a low tax bracket, it might be better to pay a small amount of taxes in order to retain the flexibility of your cash. After all, you are locking up a large sum of cash for minimal benefit.

3) Your risk appetite

Once you have considered point 1 and 2, you are ready to make your contribution of SRS or CPF. Choosing between the 2 very much depends on your risk appetite as CPF gives you a guaranteed 4% per annum return while SRS intrinsically only pays you the prevailing bank rate. This means that SRS contributions need to be invested in riskier assets in order to match or outperform CPF.

I currently use my meagre SRS funds in undervalued dividend paying stocks.

4)  Your objective

If you have a low risk appetite, it is likely you will choose to contribute to CPF. As mentioned in part 2, you have to decide if you wish to fund your retirement or your health insurance and contribute to your SA or MA accordingly.


Here’s a simple flow chart to illustrate my overall tax planning strategy:

Tax planning flowchart

Currently, due to me still being in a low tax bracket, I’ve not contributed to my CPF SA or MA. I have contributed to SRS in the past due to experimentation and it fitting my desire to invest. However, going forward, I have decided to stop contributing as well to retain flexibility over my funds.

And that marks the end of this 4 part personal tax planning series. Do you agree with my strategy? Do you have a better strategy for your own tax planning? I look forward hearing to your suggestions.

Happy Hunting,

PS: IRAS Corporate Communications reached out to me with some useful infographics to share with you guys. I’ve updated part 1 to include those infographics for your benefit.

Personal tax planning 3: Supplementary Retirement Scheme


Welcome to part 3 of my basic personal income tax planning series! In this series of posts I hope to cover the following topics:

  1. Tax reliefs
  2. CPF Cash Top Up
  3. Supplementary Retirement Scheme (SRS)
  4. Bringing it all together – How to best utilise these reliefs to your advantage

In this part, I will cover how contributing to your SRS account can be used as a tool to mitigate your tax bill. Here’s a brief introduction to SRS.

What is SRS?

SRS is a government initiative to complement the CPF system and incentivise Singaporeans and PRs to save and invest more for retirement. It is completely privately operated and run by the 3 local banks – DBS, OCBC and UOB.

SRS is essentially a tax deferred investment vehicle. What this means is that contributions to the account (which is assumed to be derived from your income) are not subject to tax when contributed, but will be subject to tax years later when withdrawals are made. The beauty of this is that you can plan to commence withdrawals when you have retired and don’t have a high amount of taxable income, thus minimising your tax liability on withdrawal.

SRS Infographic

Assumes no early withdrawals

Some key points to note about SRS:

  1. General
    1. Statutory retirement age refers to the statutory retirement age at the time of your first contribution. This is currently 62 years old.
    2. You can only have 1 SRS account.
    3. The agent banks do charge fees on the transactions and account maintenance. The fee schedule for DBS and UOB can be found here and here. OCBC does not publish a fee schedule but based on my personal experience, there’s no account maintenance fees but I can’t recall the transaction costs but it should be comparable to DBS and UOB.
  2. Contributions
    1. Current annual contribution cap is $15,300.
    2. Contributions can be used for investments in stocks, bonds, gold, unit trusts and government treasuries.
    3. Cash balances are paid interest based on the prevailing bank interest rates.
  3. Withdrawals
    1. Early withdrawals before statutory retirement age are 100% subject to tax. It is also subject to a 5% penalty fee.
    2. 50% of withdrawals after statutory retirement age is subject to tax, ie if you withdraw $40,000, only $20,000 is subject to tax.
    3. You are given 10 years from the year you make your first withdrawal to completely withdraw your SRS funds.
    4. Point 3(b) when combined with point 3(c) plus the fact that the first $20,000 of taxable income in a given year is tax free, means that you can withdraw up to $400,000 worth of funds tax-free over 10 years, assuming you have no other taxable income sources.
    5. Withdrawals after statutory retirement age can be made in the form of cash or investments, subject to certain conditions.

Tax Relief

As mentioned in part 1, you will receive a dollar for dollar tax relief up to $15,300 per annum (due to current contribution caps) for your SRS contributions. Contributions can be made via iBanking by simply transferring the funds into the SRS account.

There’s nothing complicated about this relief, you just need to consider the Pros and Cons before contributing to SRS.

Pros and Cons

SRS Pros and Cons

Given the above, you should aim to accumulate no more than $400,000 of investments and contributions within your SRS account to maximise the tax benefits of this scheme. Of course, if you are fine with paying a bit of taxes, it is perfectly fine to disregard this target as you are still paying a relatively low tax rate as illustrated below.

Withdrawal tax exposure


The Supplementary Retirement Scheme is a tax deferred investment account that allows you defer your current taxes (through tax reliefs) to a future date while helping you save for retirement. This enables you to do some tax planning to mitigate your annual tax bill.

Now that you know about the 3 main tools at your disposal for personal tax planning, my last post of this series will examine the overall strategy that I employ for my own taxes as well as the priority I assign to each tax planning tool. Until next time.

Happy Hunting

Personal tax planning 2: CPF Cash Top-up


Welcome to part 2 of my basic personal income tax planning series! In this series of posts I hope to cover the following topics:

  1. Tax reliefs
  2. CPF Cash Top Up
  3. Supplementary Retirement Scheme
  4. Bringing it all together – How to best utilise these reliefs to your advantage

In this part, I will cover how topping up your CPF can be used as a tool to mitigate your tax bill. As mentioned in Part 1, there are 2 ways to top up your CPF to obtain reliefs:

  1. Top up your / your family member’s Special Account (SA) / Retirement Account (RA)
  2. Voluntary contributions to your Medisave Account (MA)

Topping up of SA / RA

The Retirement Sum Topping Up Scheme (RSTU) allows you to top up your / your family member’s SA / RA with cash gives you a dollar for dollar tax relief of up to $14,000 ($7,000 for your own account, $7,000 for your family member’s account). The amount of relief you will obtain is subject to the following limit on cash top-up as well:


Source: IRAS

The current FRS for 2018 is $171,000, this cap will be readjusted annually until you turn 55.

Do note that tax relief for topping up your spouse or sibling’s SA / RA is only applicable if he / she had $4,000 or less income (including tax exempt income like interest and SG dividends) in the Year of Assessment.

Voluntary contributions to your MA

There are 2 ways to perform voluntary CPF contributions annually:

  1. Contribute generally to your CPF OA, SA and MA accounts in accordance with prevailing allocation rates.
  2. Contribute specifically to your MA.

The advantage to contributing specifically to your MA vs general voluntary contributions is the dollar for dollar tax relief given for contributing to your MA. The amount of tax relief is limited to the lowest of the following:

  1. Voluntary cash contribution to your MA; or
  2. Annual CPF contribution cap (currently $37.740 p.a.) less mandatory contributions
  3. Prevailing Basic Healthcare sum (currently $54,500) less MA balance before voluntary contributions

Pros and Cons of Contributing to your CPF SA / RA / MA

Topping up your CPF accounts is non-refundable and you should take the requisite time to weigh the following before acting:

Pros and Cons

Some people say that you can view your CPF SA and MA contributions as investing in a 30 year Government Treasury yielding minimum 4% and they do it in place of the bond component in their investment portfolio. For me, I’ve yet to voluntarily contribute to my CPF as I’m not at a high income tax bracket currently and I wish to retain the flexibility of capital to deploy opportunistically. Whether you choose to contribute or not is very much dependent on your tax situation and risk appetite. I will elaborate on this in my final post of this series.

Contribute to SA or MA?

There is no specific advantage of topping up your SA over contributing to your MA as both earn 4% in interest p.a. and both give the same amount of dollar for dollar relief (subject to caps). It depends on your personal preference, bearing in mind the purpose of the SA and MA.

The SA is set up specifically for your retirement. You can use the funds for the CPF Investment Scheme (CPFIS) if you have a minimum balance of $40,000 if you choose to. When you turn 55, the FRS is deducted first from your SA and if insufficient, then from your OA. The funds are transferred to your RA to fund CPF Life.

The MA is used mainly to help fund healthcare costs and pay for Medishield Life and your Integrated Shield plans. The money will stay there and not be used to fund your retirement, be it via cash withdrawal at 55 or to fund CPF Life.

As such, ultimately you have to decide for yourself – fund my retirement or fund my medical / insurance bills?


Contributing to your CPF is a tool you can use to mitigate your tax bill with some planning. It has however, many facets to consider prior to contributing, over and beyond just tax benefits. I will discuss how to best utilise this tax relief in the final post of this series.

Till my next post in this series on the Supplementary Retirement Scheme.

Happy Hunting,

Personal tax planning 1: Tax reliefs


Welcome to my basic personal income tax planning series! In this series of posts I hope to cover the following topics:

  1. Tax reliefs
  2. CPF Cash Top Up
  3. Supplementary Retirement Scheme
  4. Bringing it all together – How to best utilise these reliefs to your advantage

This series of posts assumes that you understand the basic concepts of income tax and personal reliefs as well as the filing requirements. If you are new to income tax, I recommend that you go through the information on the IRAS website which provides a basic overview of things.

Know your personal reliefs

I’ve come across some friends that doesn’t even bother to fire up the IRAS myTax Portal every year to at least take a look at their tax filing, let alone adjust their filings. To that I say thank you for your outsized contribution to nation building! 😝

Let’s be clear, tax planning is not tax evasion. It’s about efficiency and paying your fair share. And knowing your reliefs is a large part of that. IRAS has done up a pretty nifty relief eligibility tool, I encourage you to play around with it and learn more about the various reliefs available. Who knows, maybe you could save some taxes in the process.

The reliefs I’ll be covering are those that require action on your part to qualify for (be it to proactively elect to claim the relief or perform the requirements), as if you do not even know the relief exists, you might not act in the first place. Generally I’ll be classifying them into 2 categories – family support and retirement / career support.

Family support reliefs

Generally this class of reliefs reflects the Government’s attempt to incentivise working Singaporeans to help support their family members in their old age or handicapped condition, or to have more children. This class of reliefs require you to elect to claim this relief in your annual tax filing and are more binary in nature (ie either you qualify or you don’t), resulting in limited tax planning opportunities.

Here is a summary of the available reliefs:

Family support reliefs

1 – Depends on whether the dependent stays with you
2 – Depends on whether the dependent is handicapped

Here are some infographics provided by IRAS for sharing with you guys:

More Tax Savings for Families

Child-Related Reliefs

Parent Relief

Generally if you are supporting a child, parent, grandparent, in-law, grandparent-in-law or spouse, you probably qualify. These reliefs generally have conditions like whether the dependent stays with you, or if you have incurred $2,000 in the YA to support these dependents who don’t stay with you, or if they have <$4,000 income in the past year. Some of the reliefs can be shared with your siblings or spouse so there’s some planning you need to discuss with your siblings / spouse. For more information on the conditions, I refer you to the relief eligibility tool from IRAS linked above.

The great thing about these reliefs is that once you claim it in one year, IRAS automatically applies it to your subsequent years’ tax filings. So going forward if nothing changes, you do not need to adjust your reliefs again.

I will talk a bit more about how to best utilise these reliefs in the last post of this series.

Retirement / Career support reliefs

This class of reliefs are the Government’s way to incentivise Singaporeans to upgrade yourself and take charge of your retirement. These reliefs require you to proactively do something to qualify for the relief. As a result, these reliefs have greater flexibility for tax planning purposes.

There are 3 reliefs I will cover in this section:

  1. Course fee relief
  2. CPF Cash Top-up relief / CPF relief
  3. Supplementary Retirement Scheme relief

Course fee relief

This relief allows you to claim up to $5,500 per year in tax reliefs for courses you have taken that will lead to a professional / vocational qualification or are relevant to your current or new employment. This does not cover courses you take for fun (RIP cooking courses) or general skills (RIP Microsoft Office courses). You can also choose to defer the claims up to 2 years (the earlier of 2 years or the year you have an assessable income >$22,000) if your assessable income is less than $22,000 in the year you incur the costs.

Pretty straight forward relief, nothing much to add. Just remember this relief when you go for professional courses and keep the invoices or records for this relief when you claim it, in case IRAS audits you.

CPF Cash Top-up / CPF Relief

There are 2 ways you can voluntarily top up your CPF account to get tax reliefs:

1. Top up your / family member’s Special Account / Retirement Account

You can voluntarily top up your own or your family’s Special Account (if you are under 55) or Retirement Account (if you are over 55) and get a dollar for dollar tax relief of up to $14,000 per year ($7,000 for your own accounts, $7,000 for your family members’).

2. Top up your Medisave Account

You can voluntarily top up your Medisave Account and get a dollar for dollar tax relief.

The CPF Board will automatically notify IRAS of the voluntary contributions you have made to the respective accounts. Do note that there are caps on topping up your Special / Retirement / Medisave Account, which I will cover in greater detail in my next post.

Supplementary Retirement Scheme Relief

Supplementary Retirement Scheme (SRS) is a voluntary scheme that the Government hopes to encourage Singaporeans to save over and beyond the CPF for retirement. It is a account you can open with any of the 3 local banks and contributions are given a dollar for dollar tax relief. The funds deposited can be used for investment purposes. Do note that there is a annual contribution cap of $15,300 per year.

SRS relief is automatically credited to you annually as your bank will notify IRAS of your annual contributions. I will cover this scheme and its key considerations before you contribute in greater depth in my 3rd post of this series.


Knowing your reliefs is important if you wish to perform some tax planning to mitigate your annual tax liability. I’ve given you a brief overview of the various reliefs that are not automatically claimed. For more in-depth explanations on the qualifying criteria, you can visit the IRAS website.

Till my next post on the CPF Cash Top-up Relief.

Happy Hunting,

It’s tax season!

Tax season.jpg

Not rabbit or duck season

It’s March, so it’s that time of the year again to file your taxes. If you are currently employed, your income tax information is likely to have already been filed for you by your employer. All you need to do is check through the form B1 on IRAS myTax Portal and make any adjustments necessary (personal tax reliefs, non-employee income, etc). If you are in a tax paying position, thank you for your contribution to nation building!

This year is my first time paying a nominal amount of taxes as I didn’t actively perform tax planning to mitigate my taxes to zero last year. This was because I’m not currently in a high income tax bracket and I wanted to retain more flexibility over my funds, something I’ll explain in future posts.

In the spirit of tax season, I’ll be mixing in some tax related posts for this month on top of my usual investment related posts. These posts will cover some of the things you can consider to mitigate your taxes going forward as well as some of their related topics (CPF voluntary contributions, SRS contributions, for example). So stay tuned!

Happy Hunting,

Budget 2018 – 10 Key Points


The much anticipated annual Budget speech was delivered yesterday by Finance Minister Heng Swee Keat (HSK) in parliament. It was titled “Together, a Better Future” reflecting a need for a united stand to face the challenges of today and tomorrow. The full speech and associated annexes can be found here.

I’ve looked forward to annual Budget speech every year since taking the Income tax module in business school as I loved tearing apart all the schemes, incentives and changes…

Nerd Alert

Yes, I’m a nerd, thank you

So were there any revolutionary changes to tax / economic policy? Here are 10 key measures talked about in the speech that probably affects most Singaporeans and my quick thoughts:

1) Extension of Wage Credit Scheme to 2020

In case you didn’t know, the Government has been co-funding salary increments for Singaporeans since 2013 up to a gross salary of $4,000 to ease the burden on businesses as wage cost inflation hits their bottom line. And they just extended the scheme to 2020. So more increments for us, yay?

For me, I’m not too sure about the effectiveness of this scheme as it is clearly a temporary measure and there’s no way this is a long term solution to drive wage inflation. Good news for businesses, I guess?

2) Corporate Income Tax rebate for YA2018 and YA2019

CIT rebate is set at 40% capped at $15k for Year of Assessment (YA) 2018 and 20% capped at $10k for YA2019.

Nothing much to talk about, this clearly beneficial for SMEs.

3) Intellectual Property tax deductions

Tax deductions for licensing payments for use of IP and registration fees of IP is set at 200% instead of 100% currently following the expiry of the Productivity and Innovation Credit (PIC) scheme. Qualifying R&D expenses will get tax deductions of 250% instead of 150% instead. These changes are effective YA2019 – YA2025.

The Government clearly wants Singapore companies to improve productivity through licensing or developing their own IP and are supporting that through the above tax deductions.

4) Start Up tax exemption and Partial tax exemption scheme adjustments

The Start up tax exemption and Partial tax exemption schemes are the Government’s way to reduce taxes for SMEs who do not have large chargeable incomes in their tax returns. How this is done is by providing tax exemptions for qualifying companies on their first $300,000 of chargeable income.

Here’s a comparison of the current scheme versus the revised version:

New tax exemptions.JPG

As you can see, the Government has reduced the amount of tax exemptions for companies and in turn raised the tax payable on companies. It is interesting that HSK noted in his speech that “Every profitable company should pay some taxes. This is sound and equitable.” and this is reflected in the changes above.

The changes result in the following impact:

Tax exemption impact

As you can see, companies will need to pay additionally up to $12,750 or $8,500 under the respective schemes especially if the company has a chargeable income between $200k – $300k. Overall, I think the tweaks will affect mostly the “richer” SMEs.

5) Carbon tax details

The Government intends to implement a carbon tax of $5 per tonne of greenhouse gases from 2019 – 2023 with a review expected then. HSK further guided that they aim to raise the carbon tax to $10-15 per tonne by 2030. This will be applied uniformly across all industries and will be paid by buying credits from the NEA.

The most direct impact is probably your electricity bill. And all the goods and services costs will probably follow suit. The hope is that the industry will work to reduce their own emissions to reduce the amount of cost they will pass on to end users. Whether that comes to fruition remains to be seen.

6) Enhanced Proximity Housing Grant


HSK also announced a simplification in eligibility criteria by changing it to the resale flat has to be within 4 km of parent / children’s HDB flat.

Nothing much to add other than slightly more support for the resale HDB market.

7) GST hike and changes

GST will be hiked to 9% around 2021 – 2025 depending on the circumstances. HSK also guided that it will be sooner rather than later.

GST will also start to apply to imported services from 2020. Examples include consultancy and marketing services from overseas. The most relevant example that applies to us is that GST will apply to apps and music purchases from 2020. Import of overseas goods and e-commerce for now is still not taxed.

So the rumours have been proven true. The good thing is that the Government has guided this 3 years in advance.

8) Buyer’s Stamp Duty changes

Buyer's stamp duty

Source: IRAS

Thinking of buying a > $1 million residential property soon? It just got 1% more expensive. Overall, it’s not that big a change, it affects mainly the luxury residential market, the property stocks should probably breath a sign of relief. Will foreign investors be deterred by this change? Only time will tell.

9) Tax transparency changes for REIT ETFs

Hidden in Annex A-5 of the Budget, amongst all the tax changes affecting banks and financial institutions, details this change that has significant impact on REIT ETFs.

Currently, Real Estate Investment Trusts (REITs) are not subject to corporate tax as long as 90% of their taxable profits are paid out to unitholders, among other conditions. This is previously not the case for REIT Exchange Traded Funds (ETFs), which explains to me why their distributions were lower than their component REITs. This change accords the same tax treatment for REIT ETFs as REITs, thus increasing the amount of distributions to REIT ETF holders.

This should be beneficial for the REIT ETFs like the Lion-Philip S-REIT ETF.

10) SG Bonus

HSK announced a “special dividend” for Singaporeans called SG Bonus.

SG Bonus.JPG

Several things to note:

  1. Applies to Singaporeans is turn 21 in 2018
  2. Assessable income refers to “gross income” before reliefs like earned income relief, CPF relief etc.
  3. Assessable Income for YA2017, ie your 2017 tax return (which is based on your 2016 income)

I find it interesting that they didn’t tie it to the Annual value of your home this time round, as such affluent retirees who stay in 1 home but a large investment portfolio (other than properties) are eligible for $300 SG bonus. 🤔


There are plenty of things that was outlined in the budget that needs to be paid for, which is reflected in the forecasted increases in GST, changes in the partial / start up tax exemption, carbon tax and buyer’s stamp duties. This is cushioned a little by the extension of GST vouchers, U-Save rebates, S&CC rebates and, in a way, the SG Bonus.

For me, it didn’t seem too radical a change and there has been more foreshadowing from PM Lee and HSK. Plenty to discuss and wait for further details.

What do you think of Budget 2018? Comment and email me your thoughts 🙂

Happy Hunting,