Lion-Phillip S-REIT ETF Declares S\$0.025 Dividend, Tax Details Revealed

Lion Global Investors Limited, the manager of the Lion-Phillip S-REIT ETF, has announced a dividend of S\$0.0250 per unit for the period from 1 July 2024 to 31 December 2024. This announcement, dated 20 January 2025, includes a detailed breakdown of the distribution components and tax implications, which shareholders must carefully review to avoid potential issues.

Key Dividend Details

• Total Dividend: S\$0.0250 per unit
• Tax Breakdown:
  • Taxable Income Component: S\$0.0133 per unit
  • Tax-Exempt Income Component: S\$0.0047 per unit
  • Capital Component: S\$0.0070 per unit (further divided into S\$0.0031 return of capital and S\$0.0039 capital distribution from underlying REITs)
• Important Dates:
  • Ex-Dividend Date: 28 January 2025
  • Record Date: 31 January 2025
  • Distribution Payment Date: 27 February 2025

Tax Implications for Shareholders

The dividend distribution is subject to tax transparency treatment for income received from Singapore-listed real estate investment trusts (REITs). Below are the key tax details:

1. Tax-Exempt and Capital Components

The tax-exempt income component and the capital component (return of capital and capital distribution) are not subject to Singapore income tax. No tax will be deducted at the source for these components.

2. Taxable Income Component

Tax will be deducted at source for the taxable income component, except for certain categories of unitholders. Shareholders are advised to act based on their tax residency and status:

• Tax Exempt (Gross Distribution):
  • Individuals holding units in their sole names or jointly
  • Singapore-incorporated and tax-resident companies
  • Singapore branches of foreign companies
  • International organisations exempt by law
  • Non-corporate entities such as statutory boards, co-operative societies, registered charities, and town councils

  Unitholders in categories (b) to (e) must complete the applicable sections of the “Declaration for Singapore Tax Purposes Form” (Form A) to ensure tax exemption.

• 10% Reduced Tax Rate:
  • Foreign non-individuals and qualified foreign funds are eligible for a reduced tax rate of 10%. They must submit Section D or Section E of Form A.
• Default Tax Rate: Unitholders not falling into the above categories will have tax deducted at the prevailing corporate tax rate of 17%.

Deadlines for Tax Declaration Forms

To ensure the appropriate tax treatment, shareholders must submit the following forms:

• Form A for eligible unitholders
• Form B (and annexes) for depository agents on behalf of beneficial owners

These forms will be sent out on or around 4 February 2025 and must be completed and returned to the processing agent, Boardroom Corporate & Advisory Services Pte. Ltd., by 5:00 p.m. on 13 February 2025. Failure to submit the forms will result in tax deductions at the default 17% rate.

Other Key Notes for Shareholders

Unitholders under the Central Provident Fund Investment Scheme and the Supplementary Retirement Scheme are not required to submit any forms and will receive gross distributions.

All distributions are considered income for the year 2024 and must be declared as part of taxable income in the Singapore income tax return for the year of assessment 2025, unless exempt or subject to reduced tax rates.

Market Implications

This announcement could potentially influence the share price of the Lion-Phillip S-REIT ETF. The tax transparency treatment and the distinct breakdown of taxable, tax-exempt, and capital components provide clarity for investors, which could enhance confidence. However, shareholders must act promptly to ensure compliance with tax requirements, as failure to submit forms could lead to higher tax deductions.

Disclaimer

This article is for informational purposes only and does not constitute financial advice. The information provided is based on the official dividend announcement by Lion Global Investors Limited. Investors are advised to consult their financial advisors or tax professionals for personalized advice. Past performance is not indicative of future results, and investments carry risks, including the potential loss of principal.