Circular to Unitholders - Suntec REIT

A Qualifying Foreign Non-Individual Unitholder is a person (other than an individual) who is not a
resident of Singapore for income tax purposes and:
(i)
(ii)
who does not have a permanent establishment in Singapore; or
who carries on any operation in Singapore through a permanent establishment in Singapore,
where the funds used by that person to acquire the Units are not obtained from that operation.
Individuals, irrespective of their nationality and tax residence status, are exempt from tax on the gross
amount of the distributions from Taxable Income of Suntec REIT. This tax exemption does not apply to
individuals who derive such distributions through a partnership in Singapore or from the carrying on of
a trade, business or profession. These individuals are liable to tax on the gross amount of distributions
from Taxable Income received at their own applicable income tax rates.
Qualifying Unitholders are liable to tax on the gross amount of distributions from Taxable Income.
Where tax had been deducted at source at the prevailing corporate rate, the tax deducted is not a final
tax and may be used as a set-off against the Singapore income tax liability of the Unitholders.
Qualifying Foreign Non-Individual Unitholders will receive distributions net of tax at the reduced rate of
10.0% for distributions made till 17 February 2010. The 10.0% tax is a final tax.
Capital Distributions
Capital Distributions refer to distributions made by Suntec REIT out of proceeds received from the
repayment of the shareholder’s loans, and/or a return of capital. Such distributions would be made out
of Unitholders’ contributions. Unitholders will not be subject to Singapore income tax on such
distributions. These distributions will be treated as a return of capital for Singapore income tax
purposes, subject to the following conditions:
(i)
(ii)
The following statements are included in the annual dividend statement that CDP issues to
depositors:
• This amount of distribution is treated as a return of capital for Singapore income tax
purposes. Therefore, such return of capital cannot be onward distributed as income by
Unitholders. These Unitholders (and each subsequent level of unitholders) cannot also
onward distribute such return of capital as income.
• For Unitholders (and each subsequent level of unitholders) who hold the Units as trading or
business assets and are liable to Singapore income tax on gains arising from the disposal
of the Units, the amount of Capital Distributions will be applied to reduce the cost of the Units
for the purpose of calculating the amount of taxable trading gains when the Units are
disposed of. If the amount of Capital Distributions exceeds the cost of the Units, the excess
will be subject to tax as trading income of such unitholders.
Suntec REIT will maintain a memorandum account showing the movements in Unitholders’ Funds
to track the amount of capital distributed, and to submit such account prior to making any
distribution of capital.
GAINS ON DISPOSAL OF UNITS
Unitholders who dispose of the units in Suntec REIT may realise a gain or loss on such disposal. In
general, the gains on disposal of units may be treated as capital gains, and therefore not subject to
Singapore tax as there is no capital gains tax in Singapore, or they may be treated as income in nature,
in which case, they are subject to Singapore income tax in the hands of the Unitholders.
Whether or not a Unitholder is subject to Singapore income tax on the disposal gains depends on
whether or not the Unitholder is in the trade or business of dealing in investments. This will be
determined based on the Unitholder’s circumstances. Unitholders who are not in the trade or business
of dealing in investments may also be chargeable to tax on the gains realised from the disposal of units
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