SINGAPORE – Ng Chiew Yen, 56, and her son, Keith Tan Kai Wen, 26, found themselves in hot water after attempting to exploit a loophole in the property tax system. The duo devised a plan to use the ’99-to-1′ scheme to escape hefty stamp duties on a condominium purchase, only to get caught red-handed by the Inland Revenue Authority of Singapore (IRAS).
The Scheme in Detail
The ’99-to-1′ purchase arrangement allows an individual without property to buy a residential unit and then sell a small share—typically 1 percent—to a property owner. This method reduces the additional buyer’s stamp duty (ABSD) payable by shifting the liability to the co-owner.
- Keith bought a condo at 49 Canberra Drive for S$1,113,000 on 24 September 2021.
- He sold a 1 percent share of the property to his mother for S$11,130 three days later.
- Ng, already a property owner, incurred ABSD on her share, while Keith avoided it initially.
The Legal Proceedings
Upon investigation, IRAS discovered that the pair had provided false and misleading information when requested for documentation related to the loan and property dealings. They had deleted 109 messages from their devices, suggesting premeditated deceit.
On 28 February 2024, both Ng and Tan were sentenced to two weeks in jail after pleading guilty to charges of providing false information. Finance Minister Lawrence Wong noted on 7 May 2023 that IRAS is working to claw back about S$60 million in ABSD from numerous similar cases—166 in total—relating to this scheme.
What’s Next?
As a consequence of this prosecution, which is the first of its kind in Singapore, the government has signalled its intention to crack down on tax evasion. IRAS has introduced a reward system to incentivise informants who aid in recovering taxes.
Mr Goh Yong Ngee, the prosecutor, remarked on the couple’s attempts to circumvent the law, citing clear premeditation in their actions. Their defence claimed there was no intent to defraud, but the court observed otherwise.
This case serves as a critical reminder that attempts to manipulate tax laws can lead to serious legal consequences. Singapore’s tax authorities are steadfast in their commitment to uphold the integrity of the tax system.