Lion-Phillip S-REIT ETF Declares Dividend – Key Tax Implications and Payout Details
Singapore, 20 January 2025 – Lion Global Investors Limited, the manager of the Lion-Phillip S-REIT ETF, has announced a dividend distribution of S\$0.0250 per unit for unitholders for the period spanning 1 July 2024 to 31 December 2024. The dividend payout consists of three components: taxable income, tax-exempt income, and capital. Shareholders should take note of critical tax implications and key dates associated with the distribution.
Dividend 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, comprising a return of capital (S\$0.0031) and a capital distribution (S\$0.0039) from the Fund’s underlying REITs
The capital component is treated as a return of capital for Singapore income tax purposes and is non-taxable.
Key Dates for Shareholders
- Ex-Dividend Date: 28 January 2025
- Record Date: 31 January 2025
- Distribution Payment Date: 27 February 2025
The dividend will be credited directly into the unitholder’s bank account or sent by cheque to the registered address.
Tax Implications
Tax-Exempt and Capital Components: These are exempt from tax, and no tax will be deducted at source.
Taxable Income Component: Tax will only be deducted under certain circumstances. Below are the details:
Categories of Unitholders Receiving Gross Distribution (No Tax Deducted):
- Individuals holding units in their sole names or jointly with others
- Singapore-incorporated, tax-resident companies
- Singapore branches of foreign companies
- International organizations exempt from tax under the International Organisations (Immunities and Privileges) Act
- Non-corporate entities registered in Singapore, including statutory boards, co-operative societies, trade unions, registered charities, and town councils
Unitholders in these categories (except individuals) must complete the Declaration for Singapore Tax Purposes Form (Form A) to qualify for gross distribution. Failure to submit the form by the deadline will result in tax deduction at the prevailing corporate tax rate of 17%.
Reduced Tax Rate of 10% for Foreign Non-Individual Unitholders:
Foreign non-individual unitholders and foreign funds qualifying under sections 13D, 13U, or 13V of the Income Tax Act are eligible for a reduced tax rate of 10%. They must complete Section D or E of Form A to avail this benefit.
Unitholders Subject to Standard 17% Tax Rate:
Unitholders who do not fall under the above categories will have tax deducted at the standard corporate tax rate of 17%.
Special Note for Depository Agents:
Depository agents managing units on behalf of beneficial owners must complete the Declaration by Depository Agents for Singapore Tax Purposes Form (Form B) by 13 February 2025 to ensure proper tax treatment for their clients.
Important Deadlines
Form A and Form B will be sent to unitholders and depository agents around 4 February 2025. Completed forms must be returned to the Fund’s processing agent, Boardroom Corporate & Advisory Services Pte. Ltd., by 5:00 p.m. on 13 February 2025. Failure to meet this deadline will result in tax being deducted at the standard 17% rate.
Impact on Share Price
The announcement of a dividend may attract investors seeking yield income, potentially increasing demand for units in the Lion-Phillip S-REIT ETF. However, shareholders should be aware of the tax implications and ensure timely submission of the required forms to maximize their payout.
Risks and Disclaimers
Investments in the Lion-Phillip S-REIT ETF are subject to market and investment risks. Dividend distributions are not guaranteed and are subject to the manager’s discretion. Additionally, any dividend payout will reduce the available capital for reinvestment, potentially impacting the Fund’s net asset value. Prospective investors are advised to read the ETF prospectus and seek professional advice before making investment decisions.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Past performance is not indicative of future results. Please consult a professional advisor before making investment decisions.
