Highlights of the RPGT Act

Real Property (s.2)

Defined to mean any land situated in Malaysia and any interest, option or other right in or over such land.

Gain (s.2)

Defined to mean (a) gain other than gain or profit chargeable with or exempted from income tax under Malaysian income tax law; or (b) in the case of a unit trust, gain not treated as income under Malaysian income tax law.

Chargeable Persons (s.2)

Allowable Loss (s.7)

Defined in Section 7 of RPGT Act to mean loss suffered on disposal of chargeable asset which, if it had been a gain, would have been chargeable with the tax. Amount of allowable loss can be used as deduction from total tax assessed for the year of assessment in which the disposal was made, and can be carried forward to subsequent year(s) of assessment, until the whole amount of the tax relief to be allowed has been allowed.

Private Residence (s. 8, sched. 3)

Submission of Returns (s. 13)

Additional Assessments (s.15)

Director General may make additional assessment within twelve (12) years after the end of that year of assessment. Where Director General, where it appears to him that a person chargeable with tax has been guilty of any form of fraud or wilful default, may at any time make an assessment in respect of that person for the purpose of making good any loss of the tax attributable to the fraud or wilful default.

Cases where acquirer may be assessed (s.16)

Acquirer may be assessed (the amount equal to the tax payable by the disposer + 10% of the tax payable) in the following circumstances:

- where consideration on disposal of chargeable asset consists of another asset (whether chargeable or not);

- where there is a failure by both disposer and acquirer to submit a return to the Director General; or

- the consideration on the disposal of a chargeable asset is for the purposes of the Act the market value of the asset.

Acquirer not entitled to any deduction for tax relief for allowable losses suffered by disposer. However, acquirer assessed under this section shall be entitled to recover as a debt due to him from the disposer the amount of any payment made in pursuance of the assessment.

Right of Appeal (s.18)

Appeal is to Special Commissioners, in the same manner as an appeal against an assessment of income tax made under the Income Tax Act 1967.

Error or mistake (s. 19)

Payment of tax (s.21)

Certificate of Clearance (s.21A)

Anti-Avoidance Provisions (s.25(2))

The Director General, where he ha reason to believe that any transaction has the direct or indirect effect of -

(a) altering the incidence of tax which is payable or suffered by or which would otherwise have been payable or suffered by any person;

(b) relieving any person from any liability which has arisen or which would otherwise have arisen to pay tax or to make a return;

(c) evading or avoiding any duty or liability which is imposed or would otherwise have been imposed on any person by the RPGT Act; or

(d) hindering or preventing the operation of the RPGT Act in any respect,

may, disregard or vary the transaction and make such assessments as he considers just and proper in the circumstances.

Incorrect Returns (s.30)

Any person who-

(a) makes an incorrect return on behalf of himself or another person;

(b) gives any other incorrect information in relation to any other matter affecting his own or any other person's liability to the tax

shall, unless he satisfies the court that the incorrect return or other incorrect information was made or given in good faith, be guilty of an offence.

Wilful evasion (s.31)

Following would be an offence for wilful evasion with intent to evade or assist in evasion of tax:

(a) omitting from return any particulars required relating to disposal of chargeable asset;

(b) making a false statement or entry in a return made under the RPGT Act;

(c) giving false answer (whether orally or in writing) to question asked or request for information made under the RPGT Act;

(d) preparing or maintaining or authorising the preparation or maintenance of any false books of account or other false records;

(e) falsifying or authorising the falsification of any books of account or other records;

(f) producing or allowing or authorising the production of, books of accounts which is knowingly false;

(g) making use or authorising the use of any fraud, art or contrivance; or

(h) making a fraudulent claim for repayment.

Fine not exceeding RM10,000-00 (and/or imprisonment of 3 years) + special penalty of three (3) times the amount of tax undercharged.

Transactions in which disposal price deemed equal to acquisition price (s.3 of Sched.2)

(a) devolution of assets of deceased person on his executor or legatee under a will or intestacy or on the trustees of a trust created under his will;

(b) transfer of assets between spouses or transfer of assets owned by individual (and/or wife / connected person to a company) to a company controlled by the individual (and/or wife / connected person) for consideration consisting of shares in the company, or for consideration consisting substantially of shares in the company, and the balance of a money payment;

(c) acquisition from or disposals to a nominee or trustee resident in Malaysia by an individual or his wife or by both being absolutely entitled as against the nominee or trustee;

(d) conveyance or transfer of an asset by way of security, or transfer of a subsisting interest or right by way of security in or over an asset (including re-transfer on the redemption of the security);

(e) gifts made to the Government, State Government, local authority or charity exempt from income tax;

(f) disposal of an asset as a result of a compulsory acquisition;

(g) disposal of an asset by a person to an Islamic Bank under Syariah principal of Al-Murabahah.

Acquisition Price (s.4 of Sched.2)

Defined as the amount or value of consideration in money or money's worth given by or on behalf of the owner wholly and exclusively for the acquisition of the asset (together with incidental costs to him of the acquisition) less -

(a) any sum received by way of compensation for any kind of damage or injury to asset or for destruction or dissipation of asset or for any depreciation or risk of depreciation of the asset;

(b) any sum received under a policy of insurance for any kind of damage or injury to or loss, destruction or depreciation of asset; and

(c) any sum forfeited to him as a deposit made in connection with any intended transfer of the asset.

Private Residence (s.4 of Sched.3)

".. a building or part of a building in Malaysia owned by an individual and occupied or certified fit for occupation as a place of residence"

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