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Q MY HOME, a two-bedroom private apartment, is owned 40 per cent by my sister and the rest by myself. She is having difficulty paying the mortgage since she got married because she already owns another property with her husband.

To lighten her burden, I’d like to buy her share at the market rate and have 100 per cent ownership of the house.

Since we are not selling the property but merely changing the owner’s name to just my name, will there be any stamp duty or legal fees and if so, how much and what is the cheapest way to settle them? Can I pay these fees with my Central Provident Fund (CPF) savings?

A A TRANSFER of an interest in an immovable property is chargeable with stamp duty, regardless of whether the interest transferred amounts to 100 per cent share in the property or less.

Your plan involves a sale of 40 per cent of the property from your sister to you.

The stamp duty payable on such transfer would be based on either the purchase price or the market value of the 40 per cent share, whichever is the higher, at the following rates:

For the first $180,000 in value or consideration - 1 per cent.

For the next $180,000 in value or consideration - 2 per cent.

Thereafter, for the value or consideration in excess of the first $360,000 - 3 per cent.

For example, if the market price of the property is $500,000 and you buy your sister’s 40 per cent share at $200,000 (40 per cent of $500,000), the stamp duty would be calculated in the following manner:

For the first $180,000, it is $1,800.

For the next $20,000, it is $400.

Total stamp fee payable is $2,200.

CPF funds and mortgage loans can be arranged to finance up to 95 per cent of the purchase price of the 40 per cent share.

CPF funds can also be used to pay the stamp fee and the legal fee payable by you as the purchaser. Your total CPF withdrawals will be subject to a housing withdrawal limit.

To determine the limit applicable to you, you may refer to the explanatory notes at www.cpf .gov.sg

But CPF funds cannot be used to pay legal fees incurred by your sister as the seller. The legal procedures involved in the whole transaction include the:

Sale by your sister of her 40 per cent share to you;

Purchase, charge and/or mortgage of the 40 per cent share by you; and

Refinancing of 60 per cent of the outstanding mortgage. This is necessary because there is a change of mortgagors from two names to one.

This means the mortgage of your 60 per cent share also has to be redeemed and re-mortgaged simultaneously.

There are no fixed costs to govern how much lawyers would charge. You can check with lawyers on their fees before you engage them. As a guide, the Law Society’s recommended fees are:

For sale - 0.15 per cent of the sale price subject to a minimum of $900;

For purchase and mortgage - 0.4 per cent of the purchase price subject to a minimum of $2,500; and

For refinancing - 0.4 per cent of the loan refinanced subject to a minimum of $2,500.

So to sum up, the costs involved in the transfer cannot be avoided. Only your sister’s legal fees in the sale and 5 per cent of the purchase price have to be paid by cash.

The rest of the costs can be paid from your CPF funds and the mortgage. You will have to get quotes yourself from financial institutions and legal firms to establish their rates.

Lie Chin ChinPartnerLie Kee Pong Partnership

Q I AM a retiree of about 60 and a Singapore permanent resident (PR). I want to make a simple will. My wife is Singaporean but a Malaysian PR.

I have three assets in Malaysia: a half-share of a shop lot, a half-share of a condomi-nium unit and a restaurant business.

If I make a will in Singapore, will it be valid in Malaysia? How much will it roughly cost to make the will?

What are the things I need to prepare? Do I have to make a will in the presence of a lawyer?

A THERE should not be any problem with recognition of your Singapore will in Malaysia if it is properly drafted and executed. The formal requirements for legal validity are similar in both countries and based on English law.

However, because you own real estate and a business in Malaysia, it would be worthwhile to get a Malaysian lawyer to look at the will as well, to see if he has any advice in relation to Malaysian law relating to land and business.

You need to agree on the legal costs with your lawyer. The cost of a simple family will may be only a few hundred dollars each for you and your wife.

If your requirements are more complex, it could cost more, depending on how much time your lawyer needs to spend on it.

You may want to call a few law firms to compare prices and the services offered.

There will be additional costs if you also employ a Malaysian lawyer.

You will need to send your lawyer a copy of your identity card and copies of your title deeds, business certificates and other documents if requested.

You will also need to give some thought to the appointment of executors to carry out your wishes after you die, guardians for any children who are minors and, of course, to whom you want to leave your wealth.

Some lawyers may ask you to complete a fairly simple form, so that they can get some relevant information about you and an idea of what you want to say in your will, before meeting you or producing a first draft.

This form is usually designed to help you direct your thoughts on the matters in the will-making process that are most important to you.

You could probably find a sample will in the National Library. But I do not recommend that you just copy it and hope that it will work for you.

Once you are gone, it is too late to do anything about mistakes or misunderstandings in your will. The best thing is to ask for legal assistance to make sure that your will eventually does what you want it to do with the minimum of fuss.

Your lawyer will probably also have some suggestions for you to enhance your will and could offer advice and assistance with CPF nominations and certain types of insurance nominations that cannot be covered by your will.

He can also advise you on the all-important choice of executors, trustees and guardians.

Your lawyer will probably want to witness your will to ensure it is signed in compliance with the proper formalities. But there is no legal requirement in Singapore that your will be witnessed by a lawyer.

If you make a will yourself, you have to get it signed in the presence of two competent witnesses, each of whom is neither a beneficiary nor the spouse of any beneficiary of your will.

However, your DIY will may not achieve everything you want, or cover certain technical points you may not have thought about. A lawyer with experience in probate work, trusts and estate planning would be in a better position to guide you.

Simon Trevethick AssociateColin Ng & Partners

Advice provided in this column is not meant as a substitute for comprehensive professional advice.

Source : Sunday Times - 14 May 2006