| Real
Property Gains Tax |
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| 1. |
Basis
of Taxation
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The chargeable
gains arising from the disposal of any land situated in Malaysia
or any interest, option or other right in or over such land or
the disposal of shares in a 'real property company' is subject
to Real Property Gains Tax.
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| 2. |
Rates
of Tax
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Category
of Disposal
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Company
(%)
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Individuals
& Other Person (%)
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Disposal
within 2 years
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30
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30
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Disposal
in the 3rd year
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20
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20
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| Disposal
in the 4th year |
15
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15
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| Disposal
in the 5th year |
5
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5
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| Disposal
in the 6th and subsequent years |
5
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0
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The
above rates apply for disposals on or after 27 October 1995.
An
individual who is not a citizen and not a permanent resident is
subject to the following rates:
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Category
of Disposal
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Company
(%)
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Disposal
within 5 years after the date of acquisition of the chargeable
asset
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30
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Disposal
in the 6th and subsequent years after the date of acquisition
of the chargeable asset
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5
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| These
rates apply for disposals on or after 17 October 1997 |
Up
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| 3. |
Example
to illustrate how Real Property Gains Tax is calculated |
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Disposal
on 10.11.95
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300,000
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Less:
Renovations
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20,000
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Legal
Fees
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3,000
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23,000
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277,000
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Acquisition
on 14.04.92
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200,000
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Add:
Stamp duty paid
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3,000
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Legal
Fees
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2,500
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5,500
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205,500
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71,500 |
| Less:
Paragraph 2, Schedule 4 (10%) |
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7,150 |
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| Chargeable
Gain |
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64,350 |
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Tax
on RM 64,350 @ 15% = RM 9,652.50
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Up
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| 4. |
Disposer's
Responsibilities
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The
disposer of a real property has to submit the following within 30
days from the date of the Sale and Purchase agreement:
(i)
Completed CKHT 1 form;
(ii) Copies of stamped Sale and Purchase Agreement or Form 14A
(memorandum of transfer) to prove the acquisition and the disposal
of the property;
(iii) Copy of the title deed / grant (if any);
(iv) Copies of bills and receipts for expenses claimed.
(in case of companies or non-citizen and non-permanent resident
individuals, details not required if asset is disposed in the
sixth or subsequent year from the date of acquisition).
Up
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| 5. |
Acquirer's
Responsibilities
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An
acquirer has to submit the following within one month from the
date of signing of the Sale and Purchase Agreement:
(i)
Completed CKHT 2 forms (in duplicate);
(ii) Copy of stamped Sale and Purchase Agreement or Form 14A (memorandum
of transfer) to prove the acquisition;
(iii) Copy of title deed / grant (if any).
Acquirer
(or his solicitor) is also required to retain the whole of the
consideration monies or a sum not exceeding five percent (5%)
of the total value of the consideration whichever is the lower,
until he receives clearance (Form CKHT 4 or CKHT 5) from the Inland
Revenue Board.
Up
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| 6. |
Exemptions
Available |
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(I)
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A
gain arising on disposal prior to 7 November 1975, the date
of coming into force of the RPGT Act 1976.
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| (II) |
An
amount of RM5,000 or 10% of the chargeable gain, whichever
is greater, for each disposal of a property by an individual. |
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| (III) |
A
gain accruing to the Government, a State Government or a local
authority. |
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| (IV) |
A
once in a lifetime exemption on a gain accruing to an individual
who is a citizen or a permanent resident or to a husband and
wife in respect of the disposal of one private residence. |
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| (V) |
A
gain equal to to the amount of estate duty payable where the
disposer is compelled to dispose the property in order to
pay the estate duty. |
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Up
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| 7. |
A
No Loss And
No Gain Situation |
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Applicable
only to companies (as defined in the RPGT Act 1976) for the following
situations:-
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(I)
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Transfer
of asset between companies in the same group to bring about
greater efficiency in operation for a consideration consisting
of not less than 75% syer in the transferee company and
the balance of a money payment.
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| (II) |
Transfer
of asset between any companies for any consideration in any
scheme of reorganisation, reconstruction or amalgamation whereby
the transferee company is being restructured to implement
any such scheme in compliance with Government policy on capital
participation in industry.
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| (III) |
Distribution
of asset by a liquidator of a company and the liquidation
of the company was made under a scheme of reorganisation,
reconstruction or amalgamation whereby the transferee company
is being restructured to implement any such scheme in compliance
with Government policy on capital participation in industry. |
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Up
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| 8. |
Several
Transactions
Where Disposal Price Is Deemed Equal To Acquisition Price |
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(I)
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Transfer
of assets between spouses.
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| (II) |
Gifts
made to the Government, State Government, local authority
or a charity exempt from income tax.
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| (III) |
Disposal
of an asset as a result of a compulsory acquisition under
any law.
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| (IV) |
Disposal
of an asset by a person to an Islamic Bank under a scheme
where that person is financed by such bank in accordance with
the Syariah.
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For
further questions on RPGT, please go to their website at http://www.hasilnet.org.my/
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