What the tax that follows you costs a portfolio each year
The annual tax on a portfolio held directly, under each tax system that most often still reaches a Singapore resident, set against the same portfolio inside a policy before charges.
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.
Singapore's rate is 0; the question is which other system applies
Singapore taxes a resident individual's employment and business income at progressive rates, up to 24% on chargeable income above S$1,000,000 from Year of Assessment 2024. It leaves most of a private portfolio alone: foreign-sourced income received by a resident individual is exempt, as are one-tier dividends and interest from approved banks, and gains on investments are generally not taxable.
Many families who live in Singapore are still inside another system. A US citizen or green-card holder is taxed by the US on worldwide income wherever they live, and there is no US-Singapore income tax treaty. A UK-connected family that returns to the UK is taxed there again from the year of return. A Chinese citizen whose hukou, family or economic ties keep China as the place of habitual residence can remain a PRC tax resident.
The table in the instrument shows the same portfolio under each of these, with the rates each preset loads, and the same portfolio inside a policy, where nothing is taxed until the policy ends.
Tax on S$10,000,000 of bonds yielding 4.5%, first year
Hypothetical. All of the return is interest. No fees.
Singapore only 0% = S$0
US person 40.8% = S$183,600
UK-connected, after return 45% = S$202,500
UK, from 6 April 2027 47% = S$211,500
Mainland China domicile 20% = S$90,000The same bonds inside a policy pay none of this along the way. What they pay instead is the policy's charges every year and the tax on the whole gain when the policy ends, which is why the structure page and the PPLI break-even exist.
What each preset loads
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.
Custom
Your own rate on income, on realised gains, on the policy gain at exit and at death, and an entry cost on the premium.
Common questions
Why is the UK preset shown at 45%?
It uses the 2026/27 additional-rate figures that apply after a return to the UK: 45% on interest, 39.35% on dividends and 24% on realised gains. The savings rate rises to 47% from 6 April 2027, and that option is one click away. While you remain in Singapore the direct portfolio bears no UK tax.
Does Singapore tax income received through a partnership?
It can. The exemption for foreign-sourced income received by a resident individual excludes income received through a partnership in Singapore (Income Tax Act 1947 s 13(7A)). The instruments assume the portfolio is held personally.
Instruments and related reading
Tax drag calculatorThe same question, asset class by asset classOpen →Tax efficiency for Singapore residentsThe written analysis behind the presetsOpen →US citizens in SingaporeWhat a US-compliant life policy changesOpen →Leaving the UK for SingaporeOffshore bonds, time apportionment and the inheritance tax tailOpen →Mainland Chinese families in SingaporeHukou, tax residence and an offshore policyOpen →Wealth Intelligence profileUse your own tax position everywhereOpen →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, individual income tax rates
From Year of Assessment 2024 the top resident rate is 24% on chargeable income above S$1,000,000; the tax on the first S$1,000,000 is S$199,150. iras.gov.sg, rates
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
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
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
gov.uk, capital gains tax rates
Gains of higher and additional rate taxpayers are taxed at 24%. gov.uk, CGT rates
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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