Keppel REIT Announces 2.80 Cents Distribution for H2 2024; Key Tax Details and Deadlines Revealed

Keppel REIT has announced a distribution of 2.80 cents per unit for the period from 1 July 2024 to 31 December 2024. This announcement is likely to catch the attention of investors, as it comprises three components: a taxable income component of 1.53 cents per unit, a tax-exempt income component of 1.01 cents per unit, and a capital gains component of 0.26 cents per unit. Here’s everything you need to know about this development, including tax implications, important deadlines, and payment details.

Key Distribution Dates and Payment Information

• Record Date: The Transfer Books and Register of Unitholders will close at 5:00 PM on 6 February 2025 to determine entitlements.
• Payment Date: Qualified unitholders will receive the distribution on 17 March 2025.

Tax Structure and Implications

The distribution is broken down into three components, each with specific tax considerations:

1. Tax-Exempt Income Component (1.01 cents/unit): This portion is exempt from tax for all unitholders, and no tax will be deducted at source.
2. Capital Gains Component (0.26 cents/unit): This portion is also not taxable, and no tax will be deducted at source.
3. Taxable Income Component (1.53 cents/unit): Tax will be deducted at source unless specific conditions are met. The applicable tax treatment depends on the unitholder’s residency and category.

Categories of Unitholders Receiving Gross Distribution

Some unitholders are eligible to receive the taxable income component without tax deduction:

• Individuals holding units in sole or joint names (unless derived through partnerships or business activities).
• Singapore-incorporated and tax-resident companies.
• Singapore branches of foreign-incorporated companies.
• Non-corporate entities registered in Singapore, including statutory boards, co-operative societies, trade unions, charities, and town councils.
• International organizations exempt under specific legislation.
• Real estate investment trust (REIT) exchange-traded funds with tax transparency status.

Unitholders falling under categories (b) to (f) must submit the “Declaration for Singapore Tax Purposes Form” (Form A) to qualify for gross distribution.

10% Reduced Tax Rate for Non-Resident Entities

Qualifying non-resident non-individual unitholders and non-resident funds may benefit from a reduced tax rate of 10%. To do so, they must complete Section D of Form A, provided they meet the following conditions:

• They do not have a permanent establishment in Singapore, or
• If they do, the funds used to acquire the REIT units were not obtained from operations in Singapore.

Important Deadlines for Unitholders

Keppel REIT has outlined critical dates for unitholders to ensure they receive the appropriate tax treatment:

• 12 February 2025: Form A (Declaration for Singapore Tax Purposes) will be sent to eligible unitholders by the Unit Registrar, Boardroom Corporate & Advisory Services Pte. Ltd.
• 27 February 2025, 5:00 PM: The completed forms must reach the Unit Registrar to ensure gross distribution or reduced tax rates. Failure to submit the forms will result in tax deductions at the prevailing corporate tax rate of 17%.

Unitholders under the Central Provident Fund Investment Scheme (CPFIS) or the Supplementary Retirement Scheme (SRS) are exempt from these requirements and will automatically receive a gross distribution.

Impact on Share Price and Investor Considerations

This announcement could influence Keppel REIT’s share price as investors may view the distribution as a sign of stable returns. However, unitholders must pay attention to the tax declaration process and deadlines to maximize their payouts. Failure to comply with submission requirements could lead to higher tax deductions, impacting net returns.

Declaration in Income Tax Returns

Unitholders who are not exempt from tax or entitled to reduced rates are required to declare the gross taxable income component of the distribution in their Singapore income tax returns for the year of assessment 2025.

Disclaimer

This article is for informational purposes only and does not constitute financial advice. Investors should consult their financial or tax advisors for guidance specific to their circumstances. The value of units and the income derived from them may fluctuate, and past performance is not indicative of future results.

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