Exempt up to full value of main residence

I REFER to the letter by Ms Fang Mei Ling, 'Estate-duty laws unfair to the middle income' (ST, March 1).

My family also has mortgage insurance with a private insurer. To avoid paying estate duty on any mortgage-insurance payout, we would have to assign the insurance policy to the creditor bank.

However, this is easier said than done. The bank officers were basically clueless when I enquired about the assignment procedures. I was bounced from one person to another until finally one officer informed me of procedures which I found too onerous.

I have procrastinated in taking action till today. So, whether out of ignorance or inertia, I believe many people with private mortgage insurance would not have made any assignment.

In contrast, the Home Protection Scheme, which insures HDB flats, automatically assigns the proceeds from the insurance policy to HDB, without attracting any estate duty.

However, I believe HDB flat owners who have mortgages with banks will also have to pay estate duty on any mortgage-insurance payouts unless they have assigned the policies.

To ensure more equitable treatment, perhaps the authorities can look into exempting estate duty up to the full market value of one's principal residential property, either on an insurance payout or an equivalent amount in liquid assets.

Consider this example: A and B each have $1 million in cash. A buys a $1 million condo and pays for it in cash, while B buys another unit for $1 million but takes a bank loan of 80 per cent.

When they die, A's estate does not need to pay any estate duty on his condo while B's estate has to cough up 5 per cent of his remaining cash (assuming he has used up the $600,000 exemption under 'Other Assets' as he had more than $600,000 in his CPF).

Many Singaporeans are already 'asset-rich, cash-

poor'. The present estate-duty requirements seem to have the perverse effect of encouraging people to channel money into property instead of maintaining sufficient liquidity to meet other needs, such as retirement.

If the Government wants to encourage Singaporeans to provide adequately for themselves, the gulf between the estate-duty exemptions for residential properties and 'Other Assets' should be re-calibrated.

Maintaining the status quo will only serve to penalise those who prudently keep more liquid assets, rather than tying them up in property.



Maria Loh Mun Foong (Ms)

Sports world

VAN BOMMEL PUNISHED

LONDON: Bayern Munich's Mark van Bommel has been punished by the Uefa for his rude gesture to Real Madrid fans during his side's 2-3 defeat in a Champions League match at the Bernabeu last week.

The Dutch midfielder was fined 6,200 euros (S$12,500) and ordered to promote fair play at a Uefa youth competition.

He, however, is free to play in next week's second leg, after the Uefa deferred a one-match ban for a probationary period of a year.

REUTERS

GOALIE PUNCHES COACH

BOGOTA: Colombian club Deportivo Pasto said on Wednesday that they have suspended their goalkeeper Diego Fernando Gomez for punching their coach.

The coach, Alvaro de Jesus Gomez, said he needed medical attention last week after he was punched in the face by the goalkeeper, who was angry at being made a reserve.

Pasto, based in the far south of Colombia, lost their opening Libertadores Cup match 0-1 at home to Brazil's Santos.

REUTERS

THAILAND COACH TO STAY

BANGKOK: Thai football coach Chanvit Phalajivin said yesterday that he has decided to stay for another year with the national team, after announcing last week that he was joining Vietnamese side Dong Thap.

He said Thailand's tourism and sports minister Suvit Yodmanee asked him to stay for another year, which would see the team through the Asian Cup in July and the SEA Games in December.

Thailand is co-hosting the Asian Cup and hosting the SEA Games.

The coach was widely criticised in his country for saying he would join the Vietnam club.

He said that he had gone to Hanoi but did not sign the contract, after the club did not agree to his request for an extra US$114,000 (S$174,000).

'The silence from the club means they have said no to my request, which makes me feel relieved,' he said.

AGENCE FRANCE-PRESSE

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