Can an Indonesian family use a Singapore trust - and what does it not fix?

Begin with the tax answer, because it is not the reason

Indonesia does not tax inheritance. The Directorate General of Taxes puts it plainly: assets received by heirs are not an object of income tax, the basis being Article 4(3)(b) of the Income Tax Law. In an article published on 12 September 2025 the Directorate confirmed a further change, that PER-8/PJ/2025 removed the requirement for heirs to produce validation of the deceased's annual return, shifting the check onto the heirs' own documents and their own tax numbers. What remains is reporting rather than taxing. Inherited assets belong in the heir's annual SPT, and at the regional level BPHTB is payable on the acquisition of land and buildings. There is no estate tax, no gift tax and no rate to plan around.

That matters because it removes the reason usually given for offshore structuring and leaves the real one visible. A family that moves assets into a Singapore trust is not buying a tax result. It is buying continuity of control, a governing law with case law behind it, a trustee that outlives the founder, and a document that says what happens next. Those are stewardship reasons, and they are the ones worth saying out loud inside the family, because the tax reason does not exist and everyone in the room knows it. A structure sold on a benefit that is not there is a structure nobody can defend at the first family meeting after the funeral.

What section 90 protects, and its four conditions

Section 90 was inserted into the Trustees Act 1967 by the Trustees (Amendment) Act 2004, in force 15 December 2004. Subsection (2) provides that no rule relating to inheritance or succession shall affect the validity of a trust, or of the transfer of any property to be held on trust, where the person creating or transferring had capacity under subsection (1), that is, capacity under the law applicable in Singapore, the law of his domicile or nationality, or the proper law of the transfer. Subsection (3) then sets the conditions: it does not apply where the settlor is a citizen of Singapore or domiciled in Singapore, and it applies to a trust only where the trust is expressed to be governed by Singapore law and the trustees are resident in Singapore. Subsection (1) covers lifetime transfers of movable property.

Around it sit the ordinary Singapore facts, which are worth stating with their dates. There is no estate duty in Singapore for deaths on or after 15 February 2008, and no inheritance, gift or net-wealth tax (IRAS). Under section 89 the Civil Law Act perpetuity provisions apply to trusts created since the 2004 amendment, and section 32 of that Act fixes the perpetuity period at 100 years, with any longer period in the instrument read down to 100 years. There is no public register of trust deeds, though since 20 June 2025 Part 7 of the Trustees Act, Transparency and Effective Control (in the Act since 2017), has provided for a Commissioner of Trust Enforcement with statutory powers of examination, information-gathering and seizure. Privacy is the absence of a filing, not the absence of a supervisor.

Where it stops: the heirs, the court, and the land

For a Muslim estate, who counts as an heir and what each takes is decided in Indonesia, in the Religious Court. Article 49 of Law No. 3 of 2006 gives the Pengadilan Agama jurisdiction at first instance between Muslims over marriage, inheritance, wasiat and hibah, and the explanation of that article defines inheritance as determining who the heirs are, determining the estate, determining each heir's share and carrying out the distribution. The Compilation of Islamic Law (Presidential Instruction No. 1 of 1991) supplies the shares: under Article 176 a single daughter takes one half and two or more take two thirds together, and where daughters inherit alongside sons the son's share is two to the daughter's one. Article 180 gives a widow one quarter where there is no child and one eighth where there is.

Two provisions in that Compilation decide most family arguments. Article 195(2) caps a wasiat at one third of the estate unless all heirs consent, and Article 195(3) makes a wasiat in favour of an heir effective only with all heirs' consent. Article 209 allows a wasiat wajibah of at most one third for an adopted child or adoptive parent who receives none. For a non-Muslim estate the Civil Code does the same work by another route: Article 913 defines the legitieme portie as the part of the estate that must go to heirs in the direct line, over which the deceased may dispose neither by lifetime gift nor by will, and Article 914 sets it at one half of the intestate share for one legitimate child, two thirds for two, and three quarters for three or more.

Land is the hardest stop, and the one advisers soften. Article 21(1) of the Basic Agrarian Law (Law No. 5 of 1960) allows only Indonesian citizens to hold hak milik. Article 26(2) provides that any sale, exchange, gift, testamentary gift or other act intended directly or indirectly to transfer hak milik to a foreigner, to a dual national, or to a legal entity other than those the Government designates is void by operation of law, the land falls to the State, and payments already received cannot be reclaimed. Directly or indirectly is the phrase to read twice. Article 21(3) adds that a foreigner acquiring hak milik by intestate succession or matrimonial mixing must relinquish it within a year or lose it to the State. A Singapore trust holds shares and offshore assets, not Indonesian land.

What forced heirship looks like when it arrives, and what is askable now

The Widjaja estate is the public record of what these rules produce when nothing was written down early. Eka Tjipta Widjaja, the founder of Sinar Mas, died in 2019; in 2020 a son born outside the founder's registered marriage sued, claiming heirship to assets he valued at US$45.8 billion, and the group's answer was that a child born out of wedlock held no stake. See the case file on the Widjaja estate for the docket. Whatever the merits on either side, the mechanism is the lesson: recognition rather than affection decides these cases, the decision is made after the funeral, in public, by people who never met the founder, and every branch learns the family's real position at the same moment, from lawyers.

What is askable while everyone is alive is narrower and far more useful than the question everyone actually wants to ask. Which assets are Indonesian-situs and which are not. Which shares sit in which holding company, and under which law that company's shareholders' agreement is governed. Whether the family sits on the religious-court track or the Civil Code track, and who the heirs would be on today's facts. Article 183 of the Compilation of Islamic Law lets heirs agree a peaceful division once each of them knows his share, which means a settlement the family writes for itself is available, but only after the shares are known. Establishing that map is stewardship, not a claim on anyone.