How much of the return a Singapore family actually keeps
Six instruments and a profile that measure the distance between what a portfolio earns and what reaches the family: fees, the tax that still applies to you, and the compounding each of them takes with it. Singapore itself taxes almost none of a private portfolio, so the answer turns on which other tax system still follows you. Every rate can be changed.
By Eldar Edmond Grady, CEO, PPLI.com. Research checked 27 September 2026.
Singapore law as at 27 September 2026, Year of Assessment 2026, for an individual resident in Singapore who holds the portfolio or policy personally. Home-country rates are the 2026 figures stated on the page.
PPLI.com is a research publisher, not an insurer, broker or financial adviser, and is not licensed by the Monetary Authority of Singapore. Nothing here is an offer of insurance. To buy a policy, deal with an insurer or adviser licensed or exempted by MAS and check it on the MAS Financial Institutions Directory.
Direct holding against a policy, for a Singapore resident
A resident individual in Singapore pays no tax on foreign-sourced investment income received in Singapore, on one-tier dividends or on interest from approved banks, and gains on investments are generally not taxable. Held directly, such a portfolio compounds with nothing taken by Singapore each year.
With a policy, a family whose only tax home is Singapore gains nothing on tax: there is no annual tax for the policy to defer, so its charges are a cost and nothing else. The instruments show that result as it is, with a break-even that stays negative.
The case changes when another system still taxes you: US citizenship, a return to the UK you expect to make, or PRC tax residence through hukou. The direct portfolio then pays that system's tax every year, and a policy that the system treats as life insurance can defer it. Which leaves more depends on the tax character of the return, the horizon, the charges and how the money comes out. The instruments measure each of those without assuming the answer.
S$1,000,000 of interest-bearing assets over 10 years
Hypothetical. A single asset yielding 5% a year, all of it interest, no fees and no policy charges except the US excise. The figures can be checked with a calculator.
Held directly 1,000,000 x 1.05^10 = S$1,628,895
Policy, before charges 1,000,000 x 1.05^10, no tax at the end = S$1,628,895Held directly 1,000,000 x (1 + 5% x (1 − 40.8%))^10 = S$1,338,706
Policy, 1% excise 990,000 x 1.05^10 = S$1,612,606
Surrendered 1,612,606 − 40.8% x 612,606 = S$1,362,663
Paid out on death excluded from income, s 101(a) = S$1,612,606For the Singapore-only reader the policy can add nothing: the direct side already compounds untaxed, so any charge is a loss. For the US person the policy leaves S$23,956 more than holding directly on surrender and S$273,899 more if it pays out on death, before any charge other than the excise. That is the room the policy's charges have to fit into.
The structure instrument and the PPLI break-even do this calculation with charges, dividends, realised gains, the UK return and US estate tax included.
One engine, one Singapore tax model
The engine
All six instruments and the profile call the same Wealth Intelligence engine, version 1.6.0. It projects each asset class year by year: gross return, fees taken first, income taxed as it arises, growth taxed only when turnover realises it, base cost carried forward.
Which tax system applies to you
Five presets, each with its rates shown and editable. Singapore only: Interest, dividends and realised gains at 0, the policy gain at 0 on surrender and at death. A resident individual pays no tax on foreign-sourced income received in Singapore, on one-tier dividends or on interest from approved banks, and gains on investments are generally not taxable. IRAS treats payouts from insurance policies as capital receipts. United States person: For a citizen or green-card holder living in Singapore: interest and other ordinary income at 40.8% (37% plus 3.8% net investment income tax), qualified dividends and long-term gains at 23.8%. The policy builds up tax-deferred; a surrender gain is taxed at 40.8% and a death benefit is excluded from income (s 101(a)). The 1% excise on premiums paid to a foreign insurer (s 4371) is an entry cost. UK-connected, returning to the UK: No UK tax on the direct portfolio while you live in Singapore; after return the 2026/27 additional-rate figures of 45% on interest, 39.35% on dividends and 24% on realised gains. The policy gain on encashment after return is taxed at 45%, or 47% for an encashment after 5 April 2027, on the share of the policy period spent as a UK resident (ITTOIA s 528). No top-slicing and no allowances. Mainland China domicile (hukou): Interest, dividends and realised gains at 20%. The policy gain on surrender at 20% while the assumption that offshore policy gains are taxed is switched on, which is the default because the position is unsettled. The death benefit is exempt as insurance compensation.
Returning to the UK
The one preset whose rates change over time. The wealth simulator, the tax drag calculator, the structure tool and the PPLI break-even apply 0 for the years you remain in Singapore and UK rates from the year of return. If your time abroad is 5 years or less, the temporary non-residence rules can bring policy gains made abroad into charge on return; the model states this and does not apply it.
Estate tax
Singapore has had no estate duty for deaths on or after 15 February 2008. Only the US preset carries a figure: estate tax at 40% above the US$15,000,000 exclusion for 2026, applied to both sides alike. Other estate or inheritance taxes that may still reach you are described, not modelled, because they usually fall on both sides alike.
Common questions
Does a policy save tax for someone taxed only in Singapore?
No. A resident individual already pays no Singapore tax on foreign-sourced investment income received in Singapore, on one-tier dividends or on interest from approved banks, and gains on investments are generally not taxable. With nothing to defer, a policy's charges are a cost. The instruments show this with every rate at 0.
Why are there presets for the US, the UK and mainland China?
Because those systems can keep taxing a Singapore resident. The US taxes its citizens and green-card holders on worldwide income, the UK taxes you again after you return, and the PRC can treat a person whose hukou keeps China as home as a tax resident. Each preset loads that system's rates, and every rate can be edited.
Can the break-even be negative?
Yes. Where the direct portfolio pays no tax, or very little, the policy's charges are larger than anything it defers and the difference stays negative in every year. The instruments report that as the result, not as missing data.
Is anything I enter sent to PPLI.com?
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Instruments and related reading
Wealth Intelligence profileOne set of facts, carried into every instrumentOpen →Tax drag calculatorThe annual tax cost, asset class by asset classOpen →PPLI break-evenThe year a policy pays for its charges, if it doesOpen →Wealth simulatorThe whole horizon, with withdrawals, fees and taxOpen →Tax efficiency for Singapore residentsThe tax that follows you, system by systemOpen →PPLI for Singapore residentsWhat a policy does and does not change for a Singapore residentOpen →PPLI.com is a research publisher, not an insurer, broker or financial adviser, and is not licensed by the Monetary Authority of Singapore. This page is general information about how tax systems treat a portfolio and a life insurance policy. It is not an offer of insurance and not advice on any product. A policy from an insurer not licensed in Singapore is outside the Policy Owners' Protection Scheme and outside Singapore statutory nominations.
The authorities this page relies on
Income Tax Act 1947 s 13(7A), s 13(1)(za) and s 13(1)(zd)
Foreign-sourced income received in Singapore by a resident individual is exempt, except income received through a partnership in Singapore (s 13(7A)(b)). Dividends paid by Singapore-resident companies under the one-tier system are exempt (s 13(1)(za)), as is interest on deposits with approved banks (s 13(1)(zd)). sso.agc.gov.sg, ITA 1947 s 13
IRAS, gains from sale of property, shares and financial instruments
Gains from the sale of shares and financial instruments are generally not taxable, and gains from trading can be. IRAS lists "payouts from insurance policies as they are capital receipts" among gains that are generally not taxable. iras.gov.sg, gains
Estate Duty Act 1929 s 2A
The Act applies only to persons dying before 15 February 2008. IRAS: estate duty has been removed for deaths on and after that date. sso.agc.gov.sg, EDA s 2A
IRS, US citizens and resident aliens abroad
A US citizen or resident alien living abroad "is subject to tax on worldwide income from all sources". irs.gov, citizens abroad
Rev. Proc. 2025-32 and 26 USC 1411
For 2026 the 37% rate applies above US$640,600 of taxable income for a single filer and the 20% rate on long-term gains and qualified dividends above US$545,500. The 3.8% net investment income tax (s 1411) does not apply to nonresident aliens, so it does apply to US citizens abroad. Top combined rates: 40.8% and 23.8%. irs.gov, Rev. Proc. 2025-32
26 USC 101(a)
Amounts received under a life insurance contract by reason of the death of the insured are excluded from gross income. law.cornell.edu, s 101
26 USC 4371
An excise tax of 1 cent per dollar, 1%, applies to life insurance premiums paid to a foreign insurer. With no US-Singapore treaty there is no treaty waiver. law.cornell.edu, s 4371
gov.uk, tax rates on property, savings and dividend income
For 2026/27: savings income at 20, 40 or 45%, dividends at 10.75, 35.75 or 39.35% from 6 April 2026. Savings rates rise to 22, 42 and 47% from 6 April 2027. gov.uk, rate changes
ITTOIA 2005 s 528, time-apportionment relief
The gain on a policy is reduced in proportion to the days in the policy period on which the holder was not UK resident, so a family returning to the UK is charged only on the UK-resident share. legislation.gov.uk, s 528
PRC Individual Income Tax Law, arts 1, 3 and 4
A person domiciled in China, meaning habitually resident there because of household registration, family or economic ties, is a resident taxed on worldwide income (art 1). Interest, dividends and property-transfer income are taxed at 20% (art 3). Insurance compensation is exempt (art 4). chinatax.gov.cn, IIT Law
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