APAC Monthly Private Wealth Legal Developments - April 2020

Welcome to Herbert Smith Freehills' new monthly private wealth industry updates in Asia.

Every month we survey ten Asian jurisdictions for legal developments concerning trust and estate planning which are of interest to the private wealth industry, and provide a succinct summary in a table format.  The jurisdictions covered in the update are Hong Kong, Singapore, China, Taiwan, Japan, India, Malaysia, Indonesia, Thailand and the Philippines. We hope that these updates will prove to be a useful resource to keep private clients, business people, and lawyers abreast of legal updates in the region.

Singapore

Court forces trustee to execute document

The Singapore High Court has exercised a rarely evoked statutory power compelling a trustee to execute the deed of resignation and consent for a fellow trustee who refused to do so, in the case Chan Chi Cheong v Chan Yun Cheong (2020 SGHC 43). The trustee has attempted to resign without consent, but the others went to court to stop him so that at least two remaining trustees or a trust corporation would be in place after his discharge.

Japan

Tax reform bill penalises excessive dividends from subsidiaries

Japan's 2020 tax reform bill was enacted on 27 March, introducing a corporate anti-avoidance measure for dividends and capital losses that is expected to apply to taxable years beginning on or after 1 April 2020. A parent company's tax basis in a subsidiary's shares will be reduced if the parent company receives a dividend from the subsidiary exceeding 10 per cent of the tax basis of the subsidiary, and the dividend income is subject to the domestic or foreign dividend received deduction. The measure only applies if the dividend exceeds JPY 20 million.

India

India waters down tax residency reforms

India’s government has diluted its budget proposals to reduce the threshold for residence from 182 to 120 days with effect from 1 April 2020, and to tax the worldwide income of non-resident individuals of Indian origin who pay no tax elsewhere. The Finance Bill as approved by Parliament on 23 March now applies the new 120-day deemed residency rule only to those with Indian income above INR 1.5 million and who live in a zero-tax country, and their foreign income will only be taxed if derived from a business controlled in India.

The contents of this document are for reference purposes only. Some of the information comes from public sources and this may not be comprehensive, accurate or up to date; where we have relied on third party information and sources, this has not been verified by us. The document does not constitute legal advice, and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication, and any facts in this document should be checked for your specific circumstances at the time you wish to use or refer to them.