Issue and planned proceeds
A Singapore-established and SGX-ST-listed REIT issued securities at principal value on the Bonds Market. Proceeds were intended for refinancing, capital expenditure and working capital. The request concerned debt under 43N(4), QDS treatment and interest deduction.
Scheduled and optional payments
Fixed semi-annual distributions did not depend on profits. With notice, the issuer could skip or partially pay them and could choose an optional payment up to the unpaid amount. Payments or capital transactions on junior and specified parity obligations were barred until full redemption, full next scheduled or optional distribution, or extraordinary holder permission.
Perpetual term and non-owner rights
There was no fixed redemption date, with specified optional redemptions. Direct unsecured subordinated obligations ranked equally with preferred REIT units, ahead of junior obligations but behind all other present/future creditors. Holders were not registered unitholders and had no statutory general-meeting attendance/vote rights. IRAS weighed all seven contractual features rather than treating preferred-unit ranking alone as equity.
Conditional tax decisions
Securities were debt under 43N(4) and QDS regulation 2; ordinary and optional distributions were interest. 43N concessions and 13(1)(a) exemption required remaining QDS conditions. Deduction under 14(1)(a) required review of purpose and use for issuer taxable income, section 14 compliance and no other prohibition. Timing was when legally due and payable, not scheduled distribution dates.
Historical reference
Summary 17/2021, published 1 October 2021, uses the 2014 Revised Edition and refers to hybrid-instruments guide paragraphs 5, 7 and 9. Its result is applicant- and transaction-specific; IRAS does not update the summary for later law or interpretation changes.
Official source
This article independently explains the substantive contents of the official PDF, including the relevant conditions, procedures and annexes. The linked document remains the authoritative source for its original wording, and later changes should be checked separately.
Read the official PDF ↗