SRS - Withdrawals - MOF

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25 questions inSRS - Withdrawals

As savings withdrawn from SRS are subject to tax, would I not be paying a lot of tax when I retire?
No, only 50% of your withdrawals are subject to tax. Moreover, you are allowed to spread out your withdrawals over a period of time. With lower or nominal income at retirement, you may end up paying little or no income tax.
MOF 6mo ago
3 found this answer helpful
I am a foreigner. What happens to my SRS deposits when I leave Singapore?
Any cash proceeds from the maturity of your SRS investments or deposits will be retained in your SRS account. You may withdraw your SRS monies at any time. You may also continue to operate your SRS account after leaving Singapore. As for the taxability of SRS withdrawals, all withdrawals are generally taxable. In addition, all withdrawals made before the retirement age (currently 62) attract a 5% penalty. As a concession, the 5% penalty is waived for foreigners who withdraw their SRS monies in one lump sum after maintaining their SRS accounts for at least 10 years. The SRS operators will be withholding tax (and the 5% penalty if applicable) on withdrawals made by foreigners and Singapore Permanent Residents (SPRs).
MOF 6mo ago
1 found this answer helpful
I am a foreigner who no longer works and lives in Singapore and I make an SRS withdrawal. How will I be taxed?
A foreigner will be taxed as a non-resident in this instance. He will generally be taxed at 15% or the local resident rate, whichever is higher. If the withdrawal is made after the statutory retirement age or more than 10 years after the date of the first contribution, only 50% of the SRS withdrawal will be subject to tax.
MOF 6mo ago
1 found this answer helpful
what is the maximum age to start the withdrawal of SRS money?
SRS member may withdraw their SRS savings anytime, albeit early withdrawals are fully subject to tax and attract a 5% penalty. An SRS member may make his first penalty-free withdrawals from the SRS account over 10 years from the date of his statutory retirement age that was prevailing at the time of his first SRS contribution. If an SRS member (i) passes away before completing his SRS withdrawals or (ii) made a full withdrawal on the grounds of terminal illness, he would not be able to enjoy the full benefit from spreading out his SRS withdrawals over a 10-year period. Hence, a tax exemption of up to $400,000 would be granted for SRS funds withdrawn in full on the grounds of terminal illness or deemed withdrawn upon an SRS member’s demise.
MOF 3mo ago
Am I allowed to reinstate the amount prematurely withdrawn and have the penalty refunded to my account?
No. You are not allowed to reinstate the amount withdrawn. Accordingly, the penalty imposed for the premature withdrawal will not be refunded.
MOF 6mo ago
As a foreigner or PR, with a balance in my account deemed withdrawn, if I make an actual withdrawal, will it be subject to withholding tax?
Yes. Your withdrawal will be subject to withholding tax. However, if you have already paid tax on the deemed withdrawal in the prior year and there is no further tax outstanding, IRAS will refund the amount of tax withheld.

[1] For an SRS member who withdraws his SRS savings: (i) at or after the statutory retirement age that was prevailing when he made his first SRS contribution or (ii) on medical grounds, the 10-year withdrawal period will start from the date of his first such withdrawal.
MOF 6mo ago
Can a foreigner opt to leave an SRS account alone to take advantage of the 50% tax concession and not be subjected to the withdrawal penalty?
Yes, she may, provided that she withdraws all funds in her SRS account at least 10 years after the date of her first SRS contribution. In addition, she should also have been a foreigner for a continuous period of at least 10 years preceding the date of withdrawal.
MOF 6mo ago
Can I make SRS withdrawals in the form of investments (i.e. transfer investments out of SRS account), and if so, how can I make such a withdrawal?
Prior to Jul 2015, all SRS withdrawals must be made in cash.
From Jul 2015, SRS members will be able to apply to their SRS operators [1] to withdraw an SRS investment by transferring the investment out of their SRS accounts (e.g. into their personal Central Depository (CDP) account), without having to liquidate their SRS investments.

This is only applicable for the following types of withdrawals, which qualify for the 50% tax concession:
a. withdrawal on or after the statutory retirement age prevailing at the time of an SRS members first contribution (prescribed retirement age);
b. withdrawal on medical grounds;
c. withdrawal in full by a foreigner who has maintained his SRS account for at least 10 years from the date of his first contribution; and
d. actual withdrawal made by an SRS member or his legal personal representative (if he is deceased) from his SRS account, after the SRS investment that is to be withdrawn had earlier been deemed withdrawn upon death or after the expiry of the 10-year withdrawal period [2].

All other withdrawals from an SRS account, including premature withdrawals, must be made in cash. Except for the four types of withdrawals highlighted above, where savings in the SRS account have been used to acquire investments, the investments must be liquidated before the sales proceeds are withdrawn in cash from the SRS account.

For a withdrawal of type a, b or c above, an SRS investment that is withdrawn will be valued by the SRS operator or the financial product provider (where applicable) and its value will be brought to tax.

This is similar to the treatment for cash withdrawn from an SRS account. For a withdrawal of type d above, the earlier deemed withdrawal would have already been subject to tax. The date of withdrawal of an SRS investment is the date on which your SRS operator approves the withdrawal.

Table A provides details on the date of approval by your SRS operator. Table B provides the dates that would be used for the purpose of valuation.

Table A - Date of approval by your SRS operator

Table B - Date used for the purpose of valuation

[1] An SRS operator would not be able to approve an application to withdraw an SRS investment where among other things, the investment cannot be separately valued (e.g. where the SRS investment that the SRS member wishes to withdraw from his SRS account is an inseparable part of an insurance policy).

[2] For an SRS member who withdraws his SRS savings: (i) at or after the statutory retirement age that was prevailing when he made his first SRS contribution or (ii) on medical grounds, the 10-year withdrawal period will start from the date of his first such withdrawal.

[3] An SRS operator would not be able to approve an application to withdraw an SRS investment where among other factors, the investment cannot be separately valued (e.g. where the SRS investment that the SRS member wishes to withdraw from his SRS account is an inseparable part of an insurance policy).

[4] This means that the value of the SRS investment to be withdrawn is the same as the value of that investment determined upon the earlier deemed withdrawal.

[5] This means that the value of the SRS investment to be withdrawn is the same as the value of that investment determined upon the earlier deemed withdrawal.
MOF 6mo ago
Can I spread my withdrawals over a period of time so as to enjoy the 50% tax concession?
Yes, if you withdraw your SRS savings at or after the statutory retirement age that was prevailing when you made your first SRS contribution or on medical grounds. The maximum period over which you can spread your withdrawals is 10 years. The 10-year period will start from the date of your first such withdrawal. The 10-year period does not apply to investments in life annuities. So long as you continue to receive your annuity streams in perpetuity, the 50% tax concession will apply. While you may make partial withdrawals in the form of investment for eligible withdrawals, an SRS operator would not be able to approve your application to withdraw, if the investment to be deducted cannot be separately valued or identified (e.g. where the SRS investment that the SRS member wishes to withdraw from his SRS account is an inseparable part of an insurance policy).
MOF 6mo ago
Can I withdraw my SRS money before the age of 62?
SRS members may withdraw their SRS savings anytime, albeit early withdrawals are fully subject to tax and attract a 5% penalty. To encourage individuals to withdraw their SRS savings at age 62 (the statutory retirement age) or later, the Government grants a 50% tax concession for such withdrawals (i.e. only 50% of the withdrawal is subject to tax). Such withdrawals also do not attract a 5% penalty. We appreciate that some individuals may wish to retire before the age of 62, but we would still like to encourage them to keep their savings for their old age. Individuals who are physically or mentally handicapped (for example, bedridden) may withdraw their SRS savings at any time, without penalty and with the 50% tax concession, regardless of their age. From YA 2016, up to $400,000 of an amount of a full withdrawal made by an SRS member on the grounds of terminal illness would be exempt from tax. 50% of any remaining amount of full withdrawal would then be subject to tax.
MOF 6mo ago