BBFT2013 TAXATION Question 3 (A) Tim, a Malaysian citizen, signed a sales and purchase agreement to acquire a house in Penang for RM300,000 on 5 June 2017. He obtained a bank loan of RM200,000 and made full payment of the acquisition price on 1 January 2018. The title of the land was only transferred to him on 1 March 2018. Tim incurred stamp duty of RM4,500 and legal fee of RM2,500 in relation to the acquisition of the house. Upon acquisition, Tim spent RM35,000 on extending and renovating the house. On 15 May 2018, the property was partially damaged by fire and he received insurance compensation of RM48,000. In February 2019, Tim was approached by a buyer who is interested to purchase the house and who paid a deposit of RM6,500 and proceeded to make an application for a bank loan. The buyer, however, was not successful in his bank loan application and accordingly Tim forfeited the deposit of RM6,500. On 12 December 2020, the property was sold to Tim's cousin, Susan, at a price of RM480,000 when its market value at the time of transfer was RM520,000. In relation to the disposal, Tim has incurred the following expenditures: RM Valuation fee 5.500 Legal fee 8,000 Commission to agent 2,000 Tim has also incurred interest expense of RM15,000 in relation to the bank loan he took to finance the property. Tim has a real property gains tax loss relief of RM3,000 from the disposal of a piece of land in 2006. Required: (a) State, with explanations, the date of acquisition of the land by Tim. (2 marks) (b) Compute the real property gains tax payable by Tim for the year of assessment 2020. (10 marks) (B) With reference to the provisions of the Income Tax Act, 1967, explain whether or not in each of the following circumstances the employment income is derived or deemed derived from Malaysia: Required: (a) Jenny and Vivian are employed as air stewardess by Thai Airway and Malaysian Airline respectively. (5 marks) (b) James, a Malaysian citizen, is employed in the civil service to work as a member of the embassy staff with the Malaysian Embassy in China. (3 marks) [Total: 20 marks]