CONFIDENTIAL 1 AC/JULY 2021/TAX467/TEST

UNIVERSITI TEKNOLOGI MARA

TEST
ANSWER SCHEME

COURSE : TAXATION 1
COURSE CODE : TAX 467
EXAMINATION : JULY 2021

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QUESTION 1
a.

YA Period of Stay No of Status Section Reasons

Days
2016 15/7 – 26/12 165 NR√
2017 18/5 – 2/7 51 R√ S 7 (1)(b) He stayed in Malaysia less than 182 days √
20/10 – 15/11 27 √ in YA 2017 and the period is linked to√ YA
16/11 – 31/12 (46 TA) 2018 that consist of at least 182 consecutive
78 days inclusive of TA√
2018 1/1 – 2/1 (2 TA) R√ S 7 (1)(a) He stayed in Malaysia for at least 182 days √
3/1 – 28/7 207 √
207
2019 5/1 – 6/4 93 R√ S 7 (1)(c) √ He stayed in Malaysia at least 90 days in YA
7/4 – 31/12 (269 TA) 2019 √ and 3 out of 4 immediatepreceding
93 years (YA 2016, 2017 and 2018) √ he was a
resident or stayed in Malaysia at least 90
days. √
2020 20/2 – 31/4 71 R√ S 7 (1)(d) He was a resident √ in 3 immediate
√ preceding years of assessement √
(YA 2019,2018,2017) and resident in the
following year of assessment (YA 2020) √
2021 7/1 – 30/6 175 R√ S7(1)(c) √ He stayed in Malaysia at least 90 days in
YA2021 √ and 3 out of 4 immediate
preceding years (YA 2020, 2019 and 2018 √
he was a resident or stayed in Malaysia at
least 90 days. √
(24x ½ =12 marks)

QUESTION 2

A. Constructed Building
RM
Cost of land Nil /
Architect fees 12,000 /
Cost of internal road and drainage system 38,000 /
Construction cost 2,000,000 /
Wiring and plumbing 40,000 /
Legal and professional fee 20,000 /
2,110,000
10% Rule:
Office does not fall in the ambit of industrial building. Since the office is 12% which is
more than 10 % of the total space therefore it does not qualify as IB. Therefore.
QE = RM2,110,000 x 88% = RM1,856,800.//
(8 / x ½ = 4)

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YA RM

2019 QBE 1,856,800

IA (10%) / (185,680)
AA (3%) / (55,704)
RE 1,615,416
2020 AA (3%) (55,704) /
RE 1,559,712
2021 AA (3%) (55,704) /
RE 1,504,008

(4/ x ½ = 2)

Canteen & restroom

YA 2021 QBE 1,200,000

IA (10%) /
AA (3%) /
RE

B. Plant & Machinery

Cutting Machine
RM
Cost of machine 60,000 /
Cost of installation 5,000 /
Cost of preparing site (COPS) 12,000 /
Aggregate cost 77,000

10% Rule
10% x Aggregate cost = 10% x RM77,000 = RM7,700. Since COPS (RM12,000) is
more than / 10% Rule (RM7,700) therefore, COPS does not qualify as QE. QE =
RM77,000 – RM12,000 = RM65,000. //

YA RM

2019 QE 65,000
IA (20%) / (13,000)
AA (3%) / (9,100)
RE 42,900
2020 AA (3%) (9,100)/
RE 33,800
2021 AA (3%) (9,100)/
RE 24,700

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Toyota Vellfire

Capital portion = 300,000 – 30,000

60 months
= RM4,500 //

YA RM RM
RQE = 50,000

2019 QE = Deposit + Capital portion

30,000 / + (4,500 x 2) // 39,000 39,000
IA (20% x 39,000) / (7,800)
AA (20% x 39,000) / (7,800)
RE 23,400
2020 QE: (4,500 X 12 =54,000 but restrict to) 11,000 11,000
34,400 50,000
IA (20% X 11,000) (2,200)
AA (20% X 50,000) (10,000)
RE 22,200
2021 Disposal (50,000/300,000 x 180,000) /// (30,000)
Balancing charge / (7,800)

C. Agriculture Allowance
1. Replacing cucumbers with tomatoes is considered as replanting√ and therefore,
qualify for agricultural allowances √

2. The expenditure incurred on the replacement of the rubber trees with oil palm trees
is new planting √ and therefore, qualify for agricultural allowances √.

3. Flower plant (roses) is not crops √ and therefore does not qualify for agriculture
allowances √

(6 √ X ½ = 3 mark)
(Total: 20 marks)

QUESTION 3
a.

RM RM
Provisional Adjusted Income 610,000√
Less: Benefits to partners
Interest on capital
Damia (210,000 x 5%) 10,500 √√
Adam (140,000 x 5%) 7,000√√
Haikal (100,000 x 5% x 4/12√) 1,250√√ (18,750)

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Salary
Damia (10,000 x 12) 120,000 √√
Adam (8,500 x 12) 102,000√√
Haikal (6,000 x 3) 18,000√√ (240,000)

Travelling Allowance
Damia (1,200 x 12) 14,400√√
Adam (1,000 x 12) 12,000√√
Haikal (1,000 x 3) 3,000√√ (29,400)

Divisional Income √ 321,850

Damia & Associates

Computation of partners Total Income for YA 2018

Damia Adam Haikal

Pre-divisional income (9/12√ x 321,850 = 144,832 96,555 -
241,387.50). 60:40
Post-divisional income (3/12√ x 321,850 = 40,231 26,821 13,410
80,462.50). 3 : 2 : 1

Add: Benefits to partners

Interest on capital 10,500 7,000 5,000
Salary 120,000 102,000 18,000
Travelling Allowance 14,400 12,000 3,000
Adjusted Business Income √ 329,963 244,376 39,410
Add: Balancing charge (6,000)(3:2:1) 3,000√ 2,000√ 1,000√
Less: Capital Allowance (18,000)(3:2:1) 9,000√ 6,000√ 3,000√
Less: Capital Allowance – Damia 10,000√√ - -
Statutory Business Income √ 351,963 252,376 43,410
Add: Other Income
Honorarium 2,000 √
Aggregate Income 351,963 43,410
Total Income √ 351,963 254,376 43,410

(34 √ x ½ = 17 marks)

b. LLP is an alternative business form that is introduced by the Companies Commission of

Malaysia (CCM) to provide options to businesses and entreprenuers to carry out their
business operations to be more competitive. An LLP has hybrid features of
a company√ that provides limited liability to its partners√.

(2 √ x 1 = 2 marks)
(Total:15 marks)

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