SUGGESTED SOLUTION PQ 1

SOLUTION 1A
Explain the exemption available of being a Malaysian citizen individual under the Real
Property Gains Tax Act 1976:

• Entitled for private residence exemption i.e 100% exemption from RPGT
• Schedule 4 exemption i.e 10% of Chargeable Gain or RM10,000 whichever is higher
• NGNL situation under paragraph 12 of Schedule 2 of RPGT Act 1976 for the transferof
real property as a gift between parent and child; husband and wife; grandparent and
grandchild
• NGNL situation under paragraph 3(1)(b) of Schedule 2 of RPGT Act 1976 for the
transfer of real property owned by an individual (connected person) to a family-controlled
company in exchange for consideration of at least 75% shares issued by that company

SOLUTION 1B

a. RPGT on the transfer of shophouse from Fifi to Glam Sdn Bhd:

Consideration received by Fifi: RM %

Shares in Glam Sdn Bhd 200,000 units x RM2 = RM400,000 83.3%
Money payment 80,000 16.7%
Total RM480,000 100%

The transfer of the shophouse from Fiona (individual citizen) was made to a family-
controlled company (Glam Sdn Bhd).

Therefore, Fiona is not subject to RPGTbecause the transfer qualifies for No Gain No
Loss transaction under paragraph 3(1)(b) of Schedule 2 of RPGT Act 1986 since the
shares in a family-controlled company received by Fiona is more than 75% of the total
consideration (83.3%).

The 200,000 shares acquired are chargeable assets under para 3(1)(b) of Schedule 2
of RPGT Act 1986 and the disposal of these shares by Fiona in future are subjected to
RPGT
b.i. The disposal of 100,000 shares Fiona acquired from the disposal of shophouse to Glam
Sdn Bhd

The disposal of 100,000 shares was a para 3(1)(b) shares and thus subjected to
RPGT.

Disposer: Fiona (individual citizen) RM

Disposal Price [DOD: 1/12/2020]
Consideration received (100,000 x RM3) 300,000
Disposal Price 300,000

Acquisition Price [DOA: 1/3/2020]

Consideration paid:
Acquisition price of the shophouse by Fiona 350,000
Add: Permitted expenses incurred by Fiona -
Less: Money payment received by her (80,000)
Acquisition Price 270,000

Chargeable Gain 30,000

Less: Schedule 4 exemption
10% of CG or 10,000 WIH (10,000)
Net Chargeable Gain 20,000
RPGT rate (within 3 years, individual citizen) 30%
RPGT payable 6,000

b.ii The disposal of 50,000 shares originally acquired by Fiona

The disposal of 50,000 shares is not subjected to RPGT because the company is nota
real property company and therefore the original shares are not a chargeable asset.
SOLUTION 1C

Disposer: Aliyah (individual non-citizen) RM

Disposal Price [DOD: 1/12/2020]
Consideration received (MV) 630,000
Less: Incidental costs
Advertisement (1,800)
Valuation fees (8,700)
Brokerage fees (1,200)
Legal fees (7,000) (18,700)
Less: Permitted expenses
Cost of enhancing the value of the asset
Fence (23,000)
Repair tiles NIL
Replacement of roof (150,000) (173,000)
DISPOSAL PRICE 438,300

Acquisition Price [DOA: 1/7/2016]

Consideration paid 240,800
Add: Incidental cost
Legal fees 3,700
Insurance 8,600 12,300
Less: Capital receipts
Compensation received (22,000)
Deposit forfeited (9,900) (31,900)
ACQUSITION PRICE 221,200
CHARGEABLE GAIN 217,100
Less: Schedule 4 exemption
10% of CG = (10% x 217,100) = 21,710 or 10,000 WIH (21,710)
NET CHARGEABLE GAIN 195,390
RPGT rate (individual non-citizen in the 5th year) 30%
RPGT Payable 58,617

END OF SOLUTIONS