DONATIONS TO NHB Updated July 2005

2. Cash Donations

3. Cash Donations Previously: Cash donations to NHB are given Double Tax Deduction NHB was an IPC (Institute of a Public Character)

4. Cash Donations Current : W.e.f. 1 August 2003, NHB transferred IPC status to National Heritage Fund (NHF) Cash donations to NHF are given Double Tax Deduction No more tax deduction for cash donations made to NHB Applicable to individual and corporate donors

5. National Heritage Fund NHF is the IPC Fund of NHB Cash donations in support of NHB�s projects/programmes/activities (for public benefit) shall be made to NHF Cheques to be made payable to �National Heritage Fund� Such donations are granted double tax deduction

6. National Heritage Fund Donations for staff welfare and administrative functions are not entitled to tax deduction NHF Management Committee:- Mr Lim Siam Kim (Chairman) Mr Kwee Liong Keng Mrs Lim Siok Peng Use of general monies in the NHF is subject to approval of mgt committee

7. National Heritage Fund General monies include:- General donations, i.e. donations not made for any specific project/purpose Balance funds from specific donations Example 1: $100,000 was donated to museum X (through NHF) for exhibition Y, which used up $80,000. $20,000 becomes general monies of museum X. Approval of the mgt committee is required to use this $20,000 for other projects/programme.

8. National Heritage Fund Example 2: If museum X agrees to channel some of its donated funds, i.e. money donated to it, to museum Y for its programmes/projects, the approval of the mgt committee is required. Donors should be informed that balance funds from specific donations will be channeled to other projects/programme

9. National Heritage Fund Implication:- Be specific when seeking donations, i.e. what are donors donating for, as this reduces paperwork and administrative details in seeking approval from mgt committee If general funds are more desirable for flexibility, just an extra step of seeking mgt committee�s approval for use of funds

10. National Heritage Fund As far as possible, requests to mgt committee for approval to use funds would be via submission & circulation of approval form, through Finance section A format for submission would be posted on the intranet shortly

11. Double Tax Deduction What is double tax deduction? Twice the donated amount is deducted from donor�s taxable income Example: Donor donates $100 to NHF. $200 is deducted from taxable income. Assuming income tax rate at 12%, tax savings is $24. Tax deduction is given for donations made in the preceding year

12. Double Tax Deduction Only outright donations that do not provide a material benefit to the donor, are tax-deductible Example:- Donor pays $500 for fundraising dinner.Cost of dinner is $100 per person. Double tax deduction is given on the net amount of $400.

13. Double Tax Deduction MOF and IRAS make distinction between donation and sponsorship:- Donations - no benefits being returned to donor, tax-deductible Sponsorships - transactional, sponsor reaps benefits from the sponsorship, e.g. advertising space, claim as business expenses

14. Double Tax Deduction Donor is allowed to carry forward unutilised tax deduction for max. 5 years Example:- Donor (individual) donates $200,000 to NHF in year 2003. Double tax deduction of $400,000 is allowed in YA 2004. Donor�s total taxable income for 2003 is only $100,000. The unutilised amount of $300,000 can be carried forward, up to YA 2009.

15. Double Tax Deduction Donors (companies) are also allowed to carry forward unutilised tax deduction, subject to regulations set by IRAS. Such donors should seek the advice of their accountants for details.

16. Other Approved Donationsto IPCs (i.e. NHF)

17. Share Donations Shares listed on the Singapore Exchange (SGX) Units in unit trusts that are readily tradable in Singapore Value: Shares- Last done price on date of donation Unit Trust- Nearest forward bid price from date of donation

18. Share Donations Date of Donation - when legal title is transferred Only applicable to individual donors

19. Land and Building Donations Double tax deduction on market value endorsed by IRAS Date of donation- property is legally transferred to NHF Applicable to individual and corporate donors.

20. Artefact Donations

21. Artefact Donations Double tax deduction for artefact donations to approved museums Approved museums:- NHB�s museums:- SAM, ACM, SHM NAS NUS Museums } under Approved Museum NLB } Scheme

22. Double Tax Deduction Artefact donated must be for museum�s permanent collection Example:- Artefacts donated for fundraising auction are not entitled to tax deduction Double tax deduction is granted on value of artefact donated, subject to IRAS� approval

23. Double Tax Deduction Applicable to individual and corporate donors Donor is allowed to carry forward unutilised tax deduction for max. 5 years.

24. Sculpture Donations

25. Sculpture Donations Under the Public Sculptures Scheme, ACM, SAM, SHM, NEA, PUB and NParks are approved recipients Donors who donate (outdoor) sculptures to these approved recipients are eligible for double tax deduction on appraised value of donated sculpture Donated sculpture can be offered for adoption

26. Sculpture Donations Adopter pays the maintenance cost incurred for the sculpture, in block of 5 years, and double tax deduction is granted on the amount Applicable to individual and corporate donors All proposals under the PSS are appraised by the Public Sculpture Appraisal Committee

27. Naming Donations

28. Naming Donations NHB�s internal two-tier naming opportunity qualifying guidelines: Artefact Donation - $1.5 million Cash Donation - $1 million If a naming donation is made between 1 Jan 2002 to 31 Dec 2004, the donor is entitled to single tax deduction (All guidelines on naming donations in subsequent slides hold for this timeframe) If a naming donation is made on or after 1 Jan 2005, the donor is entitled to double tax deduction

29. Naming Donations Donations to name a Facility A facility can be a building or any permanent structure (e.g. museum gallery, auditorium), a scholarship, a research fellowship etc Donations by the same donor made two years before or after the naming donation will be regarded as part of the naming donation and hence be allowed only single tax deduction

30. Naming Donations Example:- Mr ABC made a $1.5 million donation to museum X on 1 May 2003. He named a gallery the ABC gallery. Only single tax deduction is allowed for the naming donation. Any other donations made by Mr ABC within the period, 1 May 2001 to 1 May 2005, are only entitled to single tax deduction.

31. Naming Donations If Mr ABC chose not to name the gallery after himself, but after his father Mr RST, he would be entitled to double tax deduction for his donation. In this case, any donation made by Mr RST within the 4-year period is only entitled to single tax deduction. Tax adjustment will be made by IRAS if double tax deduction has been given for any year within the 4-year period

32. Naming Donations Applicable to individual and corporate donors However, if a donor chooses to perpetuate the name of a deceased or non-existing company, double tax deduction would apply Implications:- Bear in mind IRAS� naming guidelines when packaging donation packages

33. Naming Donations General principal is for donor not to name a facility after himself, in order to enjoy double tax deduction If donor is a non-taxable entity, e.g. foreigner not earning income in S�pore, charitable foundations etc, no such considerations when choosing a name Likewise for donors who are not interested in obtaining tax deduction

34. Naming Donations Donations to named IPC Where the IPC (e.g. foundation/fund) is named after the donor or his immediate family member, the donor and his immediate family members will be allowed a single tax deduction for their donation until the demise of the person named. Thereafter, double tax deduction is allowed.

35. Naming Donations Immediate family members refer to spouses, children, parents, grandparents and siblings All non-related donors will be granted double tax deduction for any donations made to the named IPC

36. Naming Donations Example:- A charitable foundation (an IPC) is named after Mr XYZ (�XYZ Foundation�) on 1 Feb 2002 for his donation of $10 million. Mr XYZ passed away on 27 Nov 2002. Single tax deduction is given to Mr XYZ for his $10 million donation. Mr XYZ and his immediate family members will be allowed single tax deduction for any donations made by them to XYZ Foundation from 1 Feb 2002 to 27 Nov 2002.

37. Naming Donations His wife and children will be entitled to double tax deduction for any donations made by them to XYZ Foundation after 27 Nov 2002. Where the IPC (foundation/fund) is named after the family's name (surname), the immediate family members will get single tax deduction for their donations until the generation that established the foundation passes away. Thereafter, the family members will be entitled to double tax deduction.

38. Naming Donations Example:- Mr BT Tan named the IPC as "Tan Foundation", on 1 Feb 2002. The last of Mr BT Tan's generation passes away on 20 Sep 2005. Mr BT Tan and his immediate family members will be allowed single tax deduction for their donations to Tan Foundation from 1 Feb 2002 to 20 Sep 2005. His children (the next generation) will be entitled to double tax deduction for their donations to Tan Foundation after 20 Sep 2005.

39. Naming Donations Where the IPC (foundation/fund) is named after a company/ organisation, or its related organisation (subsidiary and sibling organisation) or its Director (or Senior Executive), single tax deduction will be granted for all donations made by the related parties to the IPC until the named company/organisation ceases to exist or the demise of the person named

40. Naming Donations Example:- ATT Corporation sets up an educational foundation (an IPC) on 1 Mar 2002 and named it BTT Foundation, after its associated company, BTT Pte Ltd. Mr BT Tan is the Director of BTT Pte Ltd. He passed away on 27 Nov 2002. BTT merged its operations with CTT Pte Ltd on 15 April 2003 to form BTC Corporation.

41. Naming Donations ATT Corporation and BTT Pte Ltd will be allowed single tax deduction for their donations to BTT Foundation until 15 April 2003, when BTT Pte Ltd ceased to exist. ATT Corporation and BTC Corporation will then be entitled to double tax deduction for their donation to BTT Foundation. Mr BT Tan will be allowed single tax deduction for his donations to BTT Foundation before his demise on 27 Nov 2002.

42. Naming Donations Mrs BT Tan, an unrelated party to BTT Foundation, will be granted double tax deduction for her donations to BTT Foundation from the date of establishment of BTT Foundation on 1 Mar 2002.

43. Bequests and Donations from Estates

44. Bequests and Donations from Estates All bequests (cash & non-cash~ including artefacts) to the National Heritage Fund (an IPC) are exempted from Estate Duty All donations (cash & non-cash~including artefacts) by estates to the National Heritage Fund made on or after 1 January 2002 are exempted from estate duty

45. Bequests and Donations from Estates Upon a written notification from the IPC, the Commissioner of Estate Duty will exclude the value of the donation made by the administrator of the estate when computing the estate duty liability of the estate Once the estate duty assessment has been raised, no further donations shall be made from the estate

46. Donations to other Organisations For Information

47. Approved Museum Scheme Artefact donations to approved museums are given double tax deduction, subject to approval from IRAS Non-profit museums owned by public bodies can apply to NHB for the approved museum status Applicants must have Clear defined collection policy

48. Approved Museum Scheme Proper accessioning/deaccessioning and disposal criteria for donated artefacts with tax deduction Ability to conserve donated artefacts An approved museum must submit annual audited report of donated artefacts with tax deduction to NHB Upon dissolution of the approved museum, all artefacts obtained under the Scheme are to be handed over to NHB

49. Approved Museum Scheme Approved museums under the Scheme:- NUS Museums NLB

50. Public Sculptures Scheme Public sculptures are any three-dimensional works, with artistic and/or heritage merits, that are sited outdoors. Sites of display must be accessible by the public

51. Public Sculptures Scheme Donate/Commission a Sculpture A donor (individual or corporate) who donates a public sculpture to or commissions one for an approved recipient is eligible for double tax deduction on the appraised value of the sculpture. Any public agency may apply to NHB to become an approved recipient

52. Public Sculptures Scheme Adopt a sculpture Public sculptures donated to approved recipients, or belonging to the State, can be adopted by individuals or corporations Adopter pays the maintenance cost incurred for the sculpture, in a 5-year block Double tax deduction is granted on the amount

53. Public Sculptures Scheme Display my Sculpture An individual or corporation can publicly display a sculpture he/it owns Double tax deduction will be granted on the initial installation cost of the sculpture, as well as the maintenance cost incurred The sculpture must be publicly displayed for a minimum of 10 years Site of display must be accessible by the public

54. Public Sculptures Scheme All proposals under the Public Sculptures Scheme are appraised by the Public Sculpture Appraisal Committee (PSAC) PSAC is made up of representatives from NHB, URA and other private individuals