1. Alex, a Malaysian, worked as a factory manager in Klang, Selangor. Unfortunately, he passed away on 31 October 2020 at Klang Hospital due to kidney failure. According to his will, his estate will be managed Andy, his brother, who is a Malaysian resident. The estates income for the year of assessment 2020 is as follows:

Caf business

Adjusted income

Frozen food trading business

Net profit before tax

Depreciation

Capital allowance

Homestay business

Adjusted loss

Gross rental received from residential house per annum

Quit rent and assessment (for residential house)

Fire insurance (for residential house)

Repair and maintenance (for residential house)

Interest income from fixed deposit placement in Ambank Bhd. (paid on 1 July 2020)

Dividend income from investment in companies listed in Bursa Malaysia (single tier; paid on 30 November 2020)

RM

98,000

100,000

5,000

10,000

24,000

12,000

250

1,050

2,000

200

1,000

According to Alexs will, the following payment will be made by the executor:

• An annuity of RM5,000 to Alexs mother.

• An annuity of RM10,000 to Alexs wife, who is a full-time housewife.

• A distribution of RM15,000 to Jennifer, Alexs only daughter. Jennifer, aged 19 in 2020, is a full-time student in a local university.

Alexs spending in year 2020 before he passed away is as follows:

• RM10,000 medical fees for his parents.

• RM5,000 pocket money for his wifes parents.

• RM4,000 medical insurance premium for himself.

Required:

Compute the following for the year of assessment 2020:

i) Chargeable income of Alex (to the date of his death) and executor. (13 marks)

ii) Total income of Alexs mother, Alex wife and Alexs daughter, Jennifer.

(4 marks)

Note: 1) Alex died domiciled in Malaysia. 2) You should indicate by the use of the word nil for any item referred to in the question for which no adjusting entry needs to be made (in the column which belongs to either deceased person or the executor) correctly in the tax computation. 3) Round up all figures.

2. Assumed Andy has never been appointed as an executor prior to Alexs demise. He plans to distribute all of the deceaseds estate to the beneficiaries before paying the tax. Discuss whether his plan to distribute all of the deceaseds estate to the beneficiaries before tax payment is an appropriate decision.

(3 marks)

[Total: 20 marks]