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Basis Of Taxation
The chargeable gains arising from the disposal of any land situated in
Malaysia and 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.
Disposer's Responsibilities
The disposer of a real property has to submit the following within 30 days
from the date of disposal of the asset:
1. Completed Form CKHT 1;
2. Copies of stamped Sale and Purchase Agreement or Form 14A (memorandum
of transfer) to prove the acquisition and disposal of the asset;
3. Copy of grant/title deed (if any);
4. 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).
Acquirer's Responsibilities
An acquirer has to submit the following within 30 days from the date of
disposal of the asset:
1. Completed CKHT 2 forms;
2. Copy of stamped Sale and Purchase Agreement or Form 14A (memorandum of
transfer) to prove the acquisition;
3. Copy of grant/title deed (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.
Exemptions Available For Real Property Gains Tax (RPGT)
(i) A gain arising on disposal prior to 7 November 1975, the date of
coming into force of the RPGT Act 1976.
(ii) An amount of RM5,000 or 10% of the chargeable gain, whichever is
greater, for each disposal of a property by an individual.
(iii) A gain accruing to the Government, a State Government or a local
authority.
(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 two private residence (each for husband and
wife as amended in Budget 2005).
(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.
A No Loss And No Gain Situation
Applicable only to companies (as defined in the RPGT Act 1976) for the
following situations:-
(i) 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.
(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.
(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.
Several Transactions Where Disposal Price Is Deemed Equal To
Acquisition Price:
(i) Transfer of assets
between spouses.
(ii) Gifts made to the Government, State Government, local authority or a
charity exempt from income tax.
(iii) Disposal of an asset as a result of a compulsory acquisition under
any law.
(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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Example To
Illustrate Calculation Of Real Property Gains Tax
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Disposal
Price on 10.01.2000 |
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300,000 |
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Less:
Renovation/extension costs |
20,000 |
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Legal fees |
3,000 |
23,000 |
277,000 |
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Acquisition
Price on 15.04.1996 |
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200,000 |
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Add: Duty stamp paid |
3,000 |
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Legal fees |
2,500 |
5,500 |
205,500 |
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71,500 |
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Less: Exemption of
RM5,000 or 10%of the chargeable gain, whichever is greater |
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7,150
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Chargeable gain |
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64,350 |
Tax on RM64,350 @
15% = RM9,652.50
Rate of tax 15% for
disposal in the fourth year after the date of acquisition.
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| Rates Of Tax
(Real Property Gains Tax)
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CATEGORY OF
DISPOSAL |
COMPANY (%) |
INDIVIDUALS &
OTHER PERSON (%) |
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Disposal within
2 years |
30 |
30 |
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Disposal in the
3 rd year |
20 |
20 |
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Disposal in the
4 th year |
15 |
15 |
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Disposal in the
5 th year |
5 |
5 |
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Disposal in the
6 th year and subsequent years |
5 |
0 |
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 |
RATE OF TAX (%) |
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Disposal within
5 years after the date of acquisition of the chargeable asset |
30 |
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Disposal in the
6 th and subsequent years after the date of acquisition |
5 |
These rates apply for
disposals on or after 17 Oktober 1997.
Source:
http://www.hasilnet.org.my
1/11/2004 |
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