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Lecture6 - RPGT Class Exercise Q

This document contains 3 questions regarding the calculation of Real Property Gains Tax (RPGT) in Malaysia. Question 1 provides details of Mr. Chai's acquisition and disposal of a house, including prices and expenses. Question 2 details Terry's acquisition and disposal of a condominium, including renovation costs and compensation received. Question 3 gives information about a company's (EWSB) acquisition of land and construction of shop lots, including costs and the eventual disposal price. The required task for each question is to calculate the disposal price, acquisition price, and chargeable gain or RPGT payable based on the Real Property Gains Tax Act 1976.

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70 views

Lecture6 - RPGT Class Exercise Q

This document contains 3 questions regarding the calculation of Real Property Gains Tax (RPGT) in Malaysia. Question 1 provides details of Mr. Chai's acquisition and disposal of a house, including prices and expenses. Question 2 details Terry's acquisition and disposal of a condominium, including renovation costs and compensation received. Question 3 gives information about a company's (EWSB) acquisition of land and construction of shop lots, including costs and the eventual disposal price. The required task for each question is to calculate the disposal price, acquisition price, and chargeable gain or RPGT payable based on the Real Property Gains Tax Act 1976.

Uploaded by

premsuwaatii
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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BAW4624 Tax Compliance _RPGT_Class Exercise & Past Year Questions

QUESTION 1
Mr. Chai signed an agreement to purchase a semi-detached house on 15 August 2018 for RM
350,000. He fully settled the payment on 31 October 2018 and the vendor than transferred the
house to him on 22 December 2018. Mr Chai incurred ithe following expenses in acquiring
the house:

RM
Stamp duty on transfer 10,000
Interest on mortgage loan 27,000
Legal fees 5,775
Renovation cost 47,000

In May 2019, Mr. Chai received RM36,600 insurance compensation for flood damages to the
house; and again another insurance compensation of RM17,400 was received in June 2020. In
August 2020, he received a forfeited deposit RM 10,000 from a potential buyer who called
off the deal.

Mr Chai decided to migrate to Australia. A buyer agreed to purchase the house for
RM675,000, and signed an agreement with Mr. Chai on 17 March 2022. The payment was
settled on 15 May 2022, and the title was transferred to Mr Chai on 31 May 2022.

In disposing the house, Mr Chai had incurred the following expenses:


RM
Cost of advertisement 2,000
Valuation fees 7,000
Brokerage fees 12,100

Required:

Compute the following for Mr Chai in respect of the disposal of the house:
i) disposal price,
ii) acquisition price
iii) chargeable gain .

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BAW4624 Tax Compliance _RPGT_Class Exercise & Past Year Questions

RPGT-PYQs
QUESTION 1 (2019)

Sandy sold her condominium on 17 May 2018 for RM450,000. Up to the time of sale, Sandy
had incurred an interest charge of RM20,700 on the mortgage loan she took to buy the
condominium.

Sandy acquired the condominium on 17 April 2015 for RM290,000. She incurred the legal
fees of RM2,900 and a stamp duty of RM8,700 on the acquisition. While holding the
property, a fire destroyed the dining hall and she received an insurance compensation of
RM6,500.

In February 2016, Sandy received an offer to sell the condominium to Jason, who paid a
deposit of RM10,500. However, Jason decided not to proceed with the deal and forfeited the
deposit. Sandy then engaged an agent to sell the property and incurred the agency fee of
RM13,500, valuation fee of RM900 and advertisement cost of RM400 in order to dispose of
the property.

Required:
With reference to the Real Property Gains Tax 1976 (as amended):
(i) Calculate the disposal price of the condominium.

(ii) Calculate the acquisition price of the condominium.

(iii) Calculate the real property gains tax (RPGT) arising from the disposal of the
condominium.

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BAW4624 Tax Compliance _RPGT_Class Exercise & Past Year Questions

QUESTION 2 (2020)

Terry, a resident in Malaysia, acquired a condominium (‘the property’) in Melaka. He signed


the sales and purchase agreement on 1 June 2016 for RM325,000. He made full payment of
the acquisition price on 2 January 2017. He incurred the following expenses incidental to the
acquisition.

RM
Stamp duty 6,320
Legal fee 3,100

In 2017, Terry took a 10-year house loan amounted to RM100,000 with total interest payment
of RM16,000 from Public Bank to finance the property, while the balance of the purchase
price was settled by using the money withdrawn from his Employee Provident Fund (EPF)
second account. He settled his house loan on 30 December 2018.

Terry renovated his property on 17 February 2017 before he got married. He had spent
RM45,000 for renovation. Due to leakage on the property’s wall, Terry received
compensation from the developer amounted to RM10,000 on 3 April 2017.

In 2019, Terry and his family decided to move out from Melaka due to new employment
opportunity in Klang Valley and decided to let go his property. He sold the said property for
RM558,000 on 16 June 2019. He incurred valuation fee of RM9,100 and brokerage fee of
RM55,800 to facilitate the sales. Terry retained a deposit of RM6,500 which had been
forfeited by a prospective buyer earlier.

Required:

With reference to the Real Property Gains Tax (RPGT) Act 1976 (as amended), determine the
acquisition date, chargeable gain and RPGT payable to Terry on the disposal of the
condominium.

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BAW4624 Tax Compliance _RPGT_Class Exercise & Past Year Questions

QUESTION 3 (2021)
East World Sdn. Bhd. (EWSB), a resident company in Malaysia, acquired land in Kajang,
Selangor at the price of RM540,000 for investment purpose. EWSB paid the deposit of 40%
of the property’s price on 1 January 2012 and the balance was financed by a bank loan with
3% annual interest rate. EWSB signed the sales and purchase agreement on 14 February
2012. The company incurred stamp duty of RM22,400 and legal fees of RM19,650.

On 25 June 2012, EWSB started to build three-storey shop lots on the land and incurred
construction costs amounting to RM720,000. The shop lots were completed in April 2013 and
rented out where rental income was derived.

After making a full settlement of the bank loan in 2019, EWSB disposed the entire property
for RM1.55 million and incurred the following expenses:

i) Valuation costs of RM8,300


ii) Legal fees of RM4,220
iii) Advertisement cost of RM1,800
iv) Real estate agent’s fees of RM48,000

The sales and purchase agreement was signed on 16 March 2020 between EWSB and the
buyer.

Additional information:

EWSB had an allowable loss brought forward from the disposal of a company’s property in
October 2011 amounting to RM24,800.

Required:

With reference to the Real Property Gains Tax (RPGT) Act 1976 (as amended), determine the
RPGT payable by East World Sdn. Bhd. (EWSB) on the disposal of property.

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