January 2026 fifth edition
The eleven-page guide distinguishes active investment-making from investment dealing and passive holding. Section 10D, previously 10E, applies to relevant companies, property-trust trustees and LLP/LP partners. Income is business income under 10(1)(a), but deduction rules are restricted. Investments include securities, property and property-related assets, including serviced-apartment letting.
Three business categories
Dealers buy/sell investments for trade income, with ordinary loss and capital-allowance carry-forward subject to shareholding and continuing-business tests. Passive holders have tighter expense limits, no capital allowance and no excess-expense offset against other/future income. Active investment-making holds assets for income through organised management; calling it a business does not grant the dealer’s unrestricted loss treatment.
Facts and a composite business
Consider context, capital, systematic organisation, activity scale, manpower and resources. For a composite enterprise only the investment-making segment is subject to 10D from the relevant YA. Identify its income, expenses and allowances separately in the computation and retain evidence.
All four deduction rules
Expenses for non-income-producing investments are disallowed. Income-producing investment expenses and ordinary capital allowances under sections 19/19A/20/21 are confined to income from those investments; unused balances are disregarded. IBA/LIA under sections 16/17/18/18B/18C first offset that income but, unlike ordinary allowances, excess can offset other same-year income and, subject to statutory conditions, be carried forward, group-relieved or carried back one YA.
Identify investments and rental accrual
Determine objectively each investment and whether it produces income. Operating rent ordinarily follows contractual accrual. An FRS116/SFRS(I)16 adopter can elect effective-rent taxation only consistently for every year and ALL operating leases; make the irrevocable election with the relevant return. Otherwise adjust accounts to contractual rent.
Annex A: legal or transferable proprietary ownership
An earlier YA2005 concession excluded certain non-owner letting businesses, subject to arm’s-length/anti-avoidance conditions. From 7 December 2020 section 10D(1B) replaces that concession: property must be legally owned or involve a proprietary interest disposable/transferrable for consideration, including assignment/novation. A food-court master lessee is outside 10D only if neither legal owner nor holder of such monetisable transferable lease interest. Tax-advantage arrangements remain reviewable.
Annex A: commencement and redevelopment
Earliest letting-business commencement requires TOP AND commencement of rental income. Pre-commencement costs establish the earning structure, and section 14R’s first-dollar expense relief does not apply. A property must be available for letting and produce income. During unavailable/non-producing redevelopment periods it is non-income-producing even if it earned in previous years; the January 2026 footnote cites GHZ v Comptroller [2023] SGITBR2.
Annex A: services and renovation incentives
Parking and ancillary tenant services may be investment-making income; a genuine separate service business involving premises instead uses ordinary 10(1)(a), determined on facts. Tenant renovation subsidies are deductible where renovation ownership passes to tenants, such as removal/reinstatement obligations. If landlord owns enduring fixtures left behind, the subsidy is capital and not deductible. The document omits obsolete YA1996–1997 transitional concessions.
Official source
This article independently explains the substantive contents of the official PDF, including the relevant conditions, procedures and annexes. The linked document remains the authoritative source for its original wording, and later changes should be checked separately.
Read the official PDF ↗