IRAS rules revaluation gains on overseas shares in liquidation are not taxable.
The Inland Revenue Authority of Singapore (IRAS) has issued Advance Ruling Summary No. 18/2025 on 1 September 2025, addressing the tax treatment of revaluation gains when a holding company distributes its overseas investments during liquidation.
IRAS explained this using an example:
The ruling concerned Company A, a Singapore-incorporated investment holding company, whose immediate parent, Company B, is based overseas.
Company A holds long-term investments in foreign companies (referred to as the “Overseas Investments”) and plans to liquidate during financial year X, corresponding to the Year of Assessment Y.
As part of the liquidation, the shares in the Overseas Investments are expected to be distributed in specie to Company B. The market value of these shares is anticipated to exceed their book value at the time of liquidation.
IRAS clarified that any revaluation gains on these shares arising from Company A’s liquidation will not be taxable under section 10L of the Income Tax Act 1947. The authority noted that since Company A does not receive any consideration for transferring the shares to Company B, no gains are realised in Singapore from this transaction.
