Singapore Income Tax Act, 1947 | Q & A

Answer 1(a)(ii)
In terms of Singapore Income Tax Act, 1947, the treatment for the three
expenses as stated in case study is discussed as under:
Expense 1
Entertainment expense is generally considered as part of the sales business
expense . As it is incurred while doing a business with the client/ procuring the
client, the same will be allowed as a deduction. (Murray, 2020)
Expense 2
Shopping expenses incurred in relation to buying of clothes is not allowed as
deduction as it shall fall in the category of private expense. Further, private
expense is not eligible for deduction as business expenditure.
Expense 3
Travelling expense is not allowed from home to office and vice versa as they fall
in the category of private expense. Hence, the said expenditure shall be
disallowed in the Income- tax return . (PWC.com, 2020)
Answer 2(b)(i)
Three main consideration one must keep in mind when planning for retirement,
are here in below:
1) Corpus: one needs to consider the corpus available with oneself before
deciding on the choice of housing as the corpus shall determine whether
one can afford a very luxurious house or a normal house
2) Annual Earning post retirement: one needs to understand the regular
source of income for an individual post his retirement before taking
decision regarding the choice of house;
3) Annual spending and years of life estimation: In the said part, one
needs to understand the expenditure of an individual/ family as if the
expenditure is huge, one needs to settle for small house based on the
corpus of individual.
Answer 2(b)(ii)
The principal difference between the two retirement needs method are here-in-
below:
(a) Insurance or Endowment Plan: The insurance policy is a multi-package deal
which besides providing coverage against accident and death, also provides
a saving component. The two most common form are endowment insurance
and investment linked policies. The circumstance under which this method
is used encompass when an individual does not want to take any risk and
also want an insurance protection against any damage;
(b) CPF special Account: The growth rate in CPF is steady at approximate range
of 3.5% to 5% and is generally preferred by an individual who wish for a
steady return. However,

the said method does not cover any insurance protection. This method is
preferred when an individual does not want to take any risk
Answer 2(c)(ii)
Non-financial factors to be considered by brave lion on his retirement planning
are here in below:
1) Values and beliefs which is very mush prime and vital to be considered.
2) Purpose and identity
3) Work and learning ability
4) Activity and health requirement
5) Family and friends in need
6) Leisure and travel require as part of the routine and work.
Answer 3(b)(i)
The five scenarios under which the beneficiary of an estate cannot lay claim to
the assets are here in below:
1) If there has been an undue influence on the deceased person at the time
the will was made or the will was made by the deceased because of exert
influence made on him.
2) The will was made at the time when the deceased was mentally incapable
or sound enough to prepare the will. (Ruth Heap, 2020)
3) The formalities are not sufficient enough for the will to be prepared. For
example, the signing of the will required, necessary witness condition etc..
4) If the claim of the deceased assets is made after a long interval of time
without even having knowledge of the estate decease will.
5) If the age of the person is not sufficient enough to meet the claim of the
deceased assets.
Answer 3(b)(ii)
Conflict of interest is always supposed to prevail in a family run business. The
succession planning experts have found that 60 percent of failure in a business
occur due to lack of trust and the inability among family members to
communicate within the family. The two conflict of interest involved in business
succession plan are here in below:
1) Fear of the unknown: The succession process always creates a strong
emotional feeling as it is connected to retirement and death of a person
involved.
2) Too long or complicated procedures involved: Very often the professional
advisors always develop a plan which will save heavy tax and will provide
creditor protection. This problem invokes when the process becomes
complicated and takes too long time to execute the same. As the process
involved too many experts and many advice involved into it which makes
the whole process complicated. Generally, when we meet them they offer
the advices to why one should go for succession plan .The problem arise
when the advice of one expert clash with the other one and so on. This led
to frustration and you might just cope up by ignoring all the
recommendation provided by the expert. (YPO., 2019)

References
Determine your retirement needs. (2020, April 2). Retrieved from www.moneysense.gov.sg:
https://www.moneysense.gov.sg/articles/2018/10/determine-your-retirement-needs
Murray, J. (2020, April 2). What Business Entertainment Expenses are Deductible? Retrieved from
www.thebalancesmb.com: https://www.thebalancesmb.com/all-about-business-
entertainment-expenses-398943
PWC.com. (2020, April 20). Income tax filing. Retrieved from www.pwc.com:
https://www.pwc.com/gx/en/hr-management-services/newsletters/global-
watch/assets/pwc-singapore-new-guidance-for-short-term-business-visitors.pdf
Ruth Heap, p. H. (2020, April 2). Dependants' claims against an estate. Retrieved from
www.lawdonut.co.uk: https://www.lawdonut.co.uk/personal/claiming-an-
inheritance/dependants-claims-against-an-estate
SageVest Wealth Management. (2020, April 2). Housing Choices In Retirement. Retrieved from
www.sagevestwealth.com: https://www.sagevestwealth.com/housing-choices-in-
retirement/
YPO. (2019, April 2). Why Business Succession Plans Fail and How to Beat the Odds . Retrieved from
www.ypo.org: https://www.ypo.org/2019/04/why-business-succession-plans-fail/