Public Consultation on Parent Relief

Inland Revenue Authority of Singapore - Individual Income Tax Division

Consultation Period: 13 Jun 2013 - 26 Jul 2013

Status: Closed

Summary

IRAS Seeks Your Feedback on How Parent Relief Should be Allowed

Detailed Description

IRAS Seeks Your Feedback on How Parent Relief Should be Allowed

1. Introduction

   • The 'parent/ handicapped parent relief' gives recognition to individuals who put effort and resources into looking after their or their spouse's elderly and dependant parent(s), grandparent(s) or great-grandparent(s) [collectively referred to as "elderly parent"].

2. Background

• Currently, only one taxpayer can claim parent relief on his/ her elderly parent. If an elderly parent is supported by several family members, for example children, sons or daughters-in-law, and more than one has claimed the relief, the Inland Revenue Authority of Singapore ("IRAS") will request the family members to decide among themselves who should claim the parent relief for a particular Year of Assessment ("YA") and inform IRAS of their decision within 21 days from the date of request. Alternatively, family members can take turns claiming the parent relief – e.g. daughter this year, son next year.

• Generally, this current arrangement has worked for many families, who can come to an amicable agreement among themselves who is to claim the parent relief for the elderly parent for the YA.

• However, if the family members are unable to agree among themselves within 21 days who is to claim the parent relief for the YA, IRAS will step in and generally grants the parent relief to the taxpayer who is living with the elderly parent. If none or more than one taxpayer is living with the elderly parent, IRAS will grant the parent relief to the taxpayer who will enjoy the highest tax savings from the claim. This is to ensure that the family unit, as a whole, enjoys the highest tax savings.

• This consultation seeks your views on how IRAS should allow the parent relief in the following scenarios:

  • Where taxpayers are unable to agree among themselves who should claim the parent relief

  • Where taxpayers are unable to agree on how the relief may be apportioned among themselves

  • Where the elderly parent has indicated the parent relief be given to a particular taxpayer when family members are unable to agree on how the relief may be apportioned

3. IRAS' Proposals for Your Views

• IRAS is exploring the possibility of allowing two or more taxpayers to share the parent relief and would like to seek your views on the following:

• A - Should IRAS allow two or more taxpayers to share the parent relief if they support the same elderly parent?

• IRAS is exploring the possibility of allowing two or more taxpayers to share the parent relief in the proportions they agreed on, so long as the combined amount does not exceed the existing cap of $4,500/ $7,000 for the same elderly parent^[1]. To maximise the tax savings for taxpayers, where at least one of the taxpayers is living with the elderly parent, the higher amount of relief will apply for sharing among themselves.

• If the parties involved agree on their respective share of parent relief, each party is required to indicate to IRAS his or her share of the parent relief in his or her personal income tax return. Refer to Annex A for an example of apportionment of the parent relief in the scenario of multiple claimants.
  

• B - How should IRAS apportion the parent relief if the taxpayers are unable to agree on how the relief may be shared among themselves?

• Should IRAS decide to allow the parent relief to be shared, but where IRAS does not hear from the family or if the family cannot reach an agreement within the 21 days, IRAS proposes the following:
  

• C - Where family members are unable to agree on how the relief may be apportioned, should IRAS abide by the parent's wishes in instances where the parent has indicated that the parent relief be given to a particular taxpayer?

• Sometimes, upon seeing that the taxpayers are unable to come to an agreement among themselves, the elderly parent may step in to indicate that the parent relief be given to a particular child or son and daughter-in-law, but the rest may disagree with the elderly parent. In such situations, IRAS proposes the following:

4. Period of Consultation

• IRAS welcomes feedback from the public on the above seven proposals. The consultation exercise will last for 6 weeks, from 13 Jun to 26 Jul 2013.

• All feedback received will be taken into consideration. However, we regret that we will not be able to separately address or acknowledge every comment we receive. Instead, we will consolidate and publish a summary of the key comments received, together with our responses on IRAS and REACH websites after the consultation exercise closes. The summary will maintain confidentiality of the feedback received.

5. Submission

• For feedback in writing, please include examples/scenarios to illustrate.

• You can send your feedback to IRAS via:

  • REACH e-poll(multiple-choice selections)

  • Email: public_consultation@iras.gov.sg

  • Post:
    Comptroller of Income Tax
    Inland Revenue Authority of Singapore
    Tax Policy & Ruling Branch
    55 Newton Road
    Revenue House Singapore 307987

• Please include your name, email address and telephone number in your submission.

• IRAS reserves the right to make public all or parts of any written feedback submitted in response to this consultation exercise.

• Your feedback is important to us. All views and comments received will be considered. The closing date for submission is 26 July 2013.

Footnote:
1. Or $8,000/ $11,000 in respect of the same elderly handicapped parent.

IRAS Consultation on Sharing of Parent Relief - Annex A [PDF, 11 KB]