Suntec Real Estate Investment Trust (Suntec REIT) has announced a distribution of 1.570 cents per unit for the period from October 1, 2024, to December 31, 2024. This distribution comprises a taxable income component of 1.435 cents per unit and a tax-exempt income component of 0.135 cents per unit. The payment is scheduled to be made on Friday, February 28, 2025.

The record date for determining unitholders’ entitlements to the distribution is set for 5:00 p.m. on Tuesday, February 4, 2025. Unitholders whose securities accounts with The Central Depository (Pte) Limited are credited with Suntec REIT units as of the record date will be eligible for this distribution.

Tax Implications and Unitholder Action Required

The tax-exempt income component of the distribution is exempt from tax for all unitholders, and no tax will be deducted at source for this portion. However, the taxable income component has specific implications for different categories of unitholders:

• Tax-exempt individuals and organizations: No tax will be deducted if the unitholders fall under the following categories:
  • Singapore tax-resident companies
  • Singapore branches of foreign companies
  • Charities, trade unions, town councils, and other entities exempt under the Singapore Income Tax Act
  • International organizations exempted by the International Organisations (Immunities and Privileges) Act
  • Real estate investment trust exchange-traded funds (REIT ETFs) with tax transparency treatment
• Foreign non-individual investors: A tax rate of 10% will apply to foreign funds and non-individual investors that meet specific criteria under the Singapore Income Tax Act.
• Others: Any unitholders not falling under these categories will have tax deducted at the prevailing corporate tax rate.

Unitholders falling under eligible categories (b) to (f) or foreign non-individual investors must complete the “Declaration for Singapore Tax Purposes Form A” by Monday, February 17, 2025. Depository agents managing units on behalf of beneficial owners must complete Form B and its annexes by the same deadline.

Failure to submit the required forms will result in tax being deducted at the prevailing corporate tax rate or 10% for foreign non-individual investors.

Key Dates to Remember

• February 4, 2025, 5:00 p.m.: Close of Suntec REIT’s Transfer Books and Register of Unitholders.
• February 17, 2025, 5:00 p.m.: Deadline for submission of tax declaration forms (Form A and Form B).
• February 28, 2025: Payment of distribution to eligible unitholders.

Implications for Shareholders

This announcement may have a price-sensitive impact on Suntec REIT’s shares as it highlights a steady income distribution for Q4 2024. The assurance of a defined payout, alongside tax exemptions for certain unitholders, could attract new investors, particularly those seeking tax-efficient income streams.

However, potential investors should also consider the tax implications and administrative requirements, especially for foreign non-individual investors. Any failure to complete the necessary tax declarations could result in unexpected tax deductions, which may influence investor sentiment.

Important Disclaimer

The value of Suntec REIT units and the income derived from them may rise or fall. Past performance is not indicative of future results, and investments in REITs carry inherent risks, including potential loss of principal. Investors are advised to conduct their own due diligence or consult financial advisors before making investment decisions.