Retrenchment payments are not taxable. The sum is paid for the loss of office. It is treated as a capital receipt, and therefore not taxable. This is true even when the retrenchment payments are provided for in the contract of service or collective agreements, or when the payments are computed based on the number of years of service. However, employers often include other payments for services to be rendered, or already rendered, when paying out retrenchment benefits. Such payments are taxable. Examples are salary in lieu of notice and gratuity for services. They are payments which the employee would have got even if he were not retrenched.   In summary, retrenchment benefits as such are not taxable. However, if other payments are also made which the employee would have got even if he were not retrenched, these portions will be taxable. The description by employers on the payouts is also irrelevant to IRAS. They will look at the facts to determine the nature of the payment.

The Government will allow divorcees (with effect from YA2003) to continue claiming their procreation tax rebates granted before their divorce. 

Currently, individuals may continue to claim any unexpired procreation tax rebates even after the death of their spouses.

There are various types of personal reliefs provided in our income tax assessment system. Some of these are general reliefs provided to individuals like the Earned Income Relief. There are also other reliefs that serve specific objectives and thus are provided only to specific group of qualifying individuals. The foreign maid levy (FML) relief is one targeted relief meant to encourage married women to re-join the workforce after they have set up their families. This is the reason why FML relief is provided only to married working women. Therefore, we are not able to allow you to claim this relief. However, if you have contributed to your parent's maintenance, you can qualify for the parent relief. The parent relief is given as a recognition for individuals taking care of their parents who are 55 years old or more, or are physically or mentally handicapped. It is however not meant to compensate the individual in full for the expenses incurred in caring for his/her parents.

Currently, older workers are eligible for a higher quantum of earned income tax relief. While individuals below the age of 55 may claim $1000 of earned income relief, those between the age of 55 and 59 may claim $3,000 of earned income relief and those aged 60 and above may claim $4,000 of earned income relief. With effect from YA2003, the first $20,000 of income is also not taxable. Most older workers earning about $2,000 a month would therefore be paying minimal (or nil) tax and will not benefit from such tax exemption. Furthermore, exempting tax would have limited impact in improving the ''employability'' of the elderly group of workers as the cost to business/employers remains unchanged.

The earlier announced position had been to require employers to track their foreign employees when they leave the country until they exercise their stock options. However, after wide consultation with companies and tax practitioners on the implementation of this measure, it was found that tracking employees would be onerous, increase business costs, and be very difficult to effect. This ''deemed exercise'' rule simplifies the process for both employers and employees, while assuring the stock option holders that they will not be worse off. If the gains when the foreign employees actually exercise their options later on are lower than what was deemed, they can ask IRAS to refund the difference.