Singapore legislation

Regulation 9

of Income Tax (Adjustment for Change of Basis of Computing Profit, Loss or Expense from Financial Instruments of Insurers) Regulations 2022

Regulation 9

Additional amount treated as income under section 34AAA(7) of Act or allowable as deduction under section 34AAA(10) of Act due to revenue gain or loss, where financial instrument had been disposed of

Subregulation 1

The purpose of this regulation is to determine the additional amount of any other gain, loss or expense in respect of a financial instrument that is treated as income under section 34AAA(7) of the Act or allowable as a deduction under section 34AAA(10) of the Act (as the case may be), where the financial instrument —

(a)

had been disposed of by the insurer; or

(b)

being a debt instrument, had been disposed of by the insurer, had matured or had been redeemed,on or before the last day of the basis period for the year of assessment immediately before the year of assessment in which the Comptroller makes the discovery —

(c)

under section 34AAA(7) of the Act, that a gain in respect of the financial instrument ought to have been charged with tax as it is revenue in nature; or

(d)

under section 34AAA(10) of the Act, that a deduction ought to have been allowed for a loss or expense in respect of the financial instrument as it is revenue in nature.

Subregulation 2

Where the financial instrument (including a debt instrument) had been disposed of by the insurer, the additional amount is computed using the formula A – B, where —

(a)

A is the consideration received or receivable by the insurer from the disposal of the financial instrument; and

(b)

B is the cost incurred by the insurer in acquiring the financial instrument.

Subregulation 3

Where the financial instrument is a debt instrument that had matured or had been redeemed, the additional amount is —

(a)

if the amount received or receivable by the insurer on the maturity or redemption of the debt instrument is equal to or greater than the amount for which the debt instrument was first issued — zero; or

(b)

if the amount received or receivable by the insurer on the maturity or redemption of the debt instrument is less than the amount for which the debt instrument was first issued — computed using the formula D – C, where —

(i)

C is the amount for which the debt instrument was first issued; and

(ii)

D is the amount received or receivable by the insurer on the maturity or redemption of the debt instrument.

Read in full context — Income Tax (Adjustment for Change of Basis of Computing Profit, Loss or Expense from Financial Instruments of Insurers) Regulations 2022 →