UNIVERSITI TEKNOLOGI MARA

TAX517
TOPIC 6 : RPGT & RPC

PYQ July 2022 (PART B – Structured Question 1)

A. With regard to the shophouse in Jasin, compute the following:

i. real property gains tax (if any) by Salima on the disposal of the shophouse to
Aiman;

RM RM
Disposal Price (31.1.2021)
Consideration received (MV) 320,000

Less: Permitted expenses

Renovation (16,000) 304,000

Acquisition Price (13.7.2018)

Consideration paid 267,000
Add: Incidental cost
Legal expenses 2,600
Stamp duty 1,800 4,400
(271,400)
Chargeable Gain 32,600
Less: Sch 4 Exemption
(RM10,000 @ 10%x 32,600=3,260) - WIH (10,000)
Net Chargeable gain 22,600
Less: Allowable loss b/f (2,600)
20,000
RPGT rate 30%
RPGT payable 6,000

ii. Real property gains tax (if any) by Aiman on the transfer of the shophouse to Siti,

There will be no RPGT payable by Aiman because:

− Aiman is Malaysian citizen
− The transfer of the house is as a gift to Siti (parent and child relationship)
− The transaction is trated as no gain no loss
− The disposal price is deemed equal to acquisition price.

iii. The acquisition price of the house by Siti.

AP = AP of donor + PE incurred by donor

AP = RM304,000 + RM28,000
= RM332,000
B. With regard to Oless Sdn Bhd, determine the following:

i. Status of Oless Sdn Bhd on 1 May 2018;

RM
MV of RP 500,000
AP of shares in RPC 100,000
DV of RP 600,000
Other Tangible Assets:
Cash and bank balances 150,000
Total Tangible Assets 750,000
% DV of RP / TTA 600,000/750,000 = 80%

Status: Oless Sdn Bhd is a RPC because the % DV of RP is at least 75% of TTA

ii. Real property gains tax payable (if any) by Aiman on the disposal of 200,000
shares to Remy;

RM
Cash 50,000
Shares in Oless RM2.50 x 200,000 500,000 500,000/550,000 x 100
=90.9%
Total consideration 550,000

The transfer of factory from Aiman (Malaysian citizen) to Oless Sdn Bhd (a family
controlled company) falls under NGNL para 3(1)(b) Schedule 2.

DOA: 1/12/2019
DOD: 3/2/2021
RM
Disposal Price
Consideration received
RM4 x 200k 800,000

DISPOSAL PRICE 800,000

Acquisition Price
Consideration paid
Shares under para 3(1)(b):
AP of real property by transferor:
Consideration paid 470,000
Add: Incidental costs
Legal fees and stamp duty 10,000
Add: PE by transferor 40,000
Less: Consideration in money payment received by transferor
(50,000)
ACQUISITION PRICE 470,000
CHARGEABLE GAIN 330,000
Less: Schedule 4 exemption
RM10,000 or 10% CG, WIH (33,000)

NET CHARGEABLE GAIN 297,000

RPGT Rate (indv citizen, within 3 years) 30%

 RPGT Payable 89,100

iii. Real property gains tax payable (if any) by Aiman on the disposal of 100,000
shares to Hamid

DOA: 1/5/2018
DOD: 15/9/2021
Disposal Price RM
Consideration received
RM5 x 100k 500,000
DISPOSAL PRICE 500,000

Acquisition Price
Original shares (company is RPC)
RM1 x 100k 100,000
ACQUISITION PRICE 100,000

CHARGEABLE GAIN 400,000

Less: Schedule 4 exemption
RM10,000 or 10% CG, WIH (40,000)

NET CHARGEABLE GAIN 360,000

RPGT Rate (indv citizen, in the 4th year) 20%

RPGT Payable 72,000

c. The treatment for shares held by shareholders when an RPC ceases to be an RPC.

When an RPC ceases to be an RPC, a shareholder who acquires shares after that date
will acquire non-RPC shares.
However, existing shareholders who held shares while the company was an RPC would
hold RPC shares and continue to hold RPC shares, even after the company had ceased
to be an RPC. The RPC shares will not shed their RPC shares nature even though the
company had ceased to be an RPC.

PAST SEM TEST JUNE 2022

Question 1 (B)
a) Disposal of apartment by Muhammad
DOD : 15 July 2021
DOA : 31 March 2018

Disposal Price : RM RM
Consideration received 510,000
(-) Incremental cost
Legal fees (2,800)
(-) Permitted expenses
Renovations (25,000) 482,200
(-) Acquisition Price :
Consideration paid 425,000
 (+) Incidental costs
Legal Fees 3,000
Stamp duty 1,500
(-) Capital Receipt/Recoveries
Compensation (35,000) (394,500)
Chargeable gain 87,700
(-) Schedule 4 exemption
RM10,000 or RM8,770 (10% of (10,000)
87,700) - W.I.H
Net Chargeable Gain 77,700
RPGT rate 20%
RPGT Payable 15,540

b) Disposal of factory by Mahmud

DOD : 20 December 2019
DOA : 12 June 2017

RM
Disposal Price – MV of Factory 750,000
(-) Acquisition price (550,000)
Chargeable gain 200,000
(-) Schedule 4 exemption
RM10,000 or RM20,000 (10% of (20,000)
200,000) - W.I.H
Net Chargeable Gain 180,000
RPGT rate 30%
RPGT Payable 54,000

Mahmud is deemed to have disposed the factory at market value (RM750,000) on

the date of transfer. This is because the transaction is not an arm’s length transaction
(transfer between Mahmud and his brother).

c) Disposal of Land by Mahmud

DOD : 1 May 2018
DOA : 10 October 2015
The disposal of land by Mahmud qualifies RPGT relief (under para 12(b) Sch 2 of the
RPGTA 1976) being a disposal that enjoys ‘no gain no loss’ treatment. The disposal
price deemed to be equal to acquisition price.

Disposal of land by Muhammad

DOD : 1 May 2018
DOA : 20 February 2021

Disposal price : RM RM
Consideration received 520,000
(-) Incidental cost : Legal fees (3,100)
(-) Permitted expenses - Renovation (29,000) 487,900
(-) Acquisition price :
Consideration paid – AP of disposer 330,000
(Mahmud)
(+) Incidental cost 3,700 (333,700)
 Chargeable gain 154,200

d) Disposal of shophouse by Muhammad

DOD : 31 May 2019
DOA : 1 September 2016

RM
Disposal Price 710,000
(-) Acquisition price (590,000)
Chargeable gain 120,000
(-) Private residence exemption (50,700)
300,000 x100 = 42.25% x 120,000
710,000
69,300
(-) Schedule 4 exemption
RM10,000 or RM6,930(10% of 69,300) - W.I.H (10,000)
Net Chargeable Gain 59,300
RPGT rate 30%
RPGT Payable 17,790