Thursday, July 30, 2015

SRS Withdrawals - No Longer Need to Cash Out and Reinvest

According to the MOF website, SRS members no longer need to liquidate their investments when they withdraw their savings from SRS account. Instead they can have their investment "transfer" out. Please read:

From MOF website:

SRS Withdrawals in the form of investments

Previously, all SRS withdrawals must be made in cash. Where savings in an SRS account have been used to acquire investments, the investments must be liquidated before the sales proceeds can be withdrawn in cash from the SRS account.
From July 2015, SRS members will be able to apply to their SRS operators to withdraw investments from their Supplementary Retirement Scheme (SRS) accounts without having to liquidate their investments. This is 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 member’s 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or his legal personal representative (if he is deceased) from his SRS account, after the SRS investment that is to be withdrawn had earlier been deemed withdrawn upon death or after the expiry of the 10-year withdrawal period.1
For a withdrawal of type a, b or c above, an SRS investment that is withdrawn will be valued by the SRS operator or the financial product provider (where applicable) and its value will be brought to tax. This is similar to the treatment for cash withdrawn from an SRS account.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.
This change allows SRS members to hold their SRS investments outside of the SRS scheme without having to incur the transaction costs to first liquidate their SRS investments (so as to withdraw cash from their SRS accounts) and thereafter re-purchase the same investments outside of the SRS scheme. More information can be found in Q25 to Q48 of the SRS booklet.

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