Real Property Gains Tax Rates Company Indiv 1 Indiv 2 Disposed within 3 years 30% 30% 30% Disposal in 4th year 20% 20% 30% Disposal in 5th year 15% 15% 30% Disposal in 6th year and thereafter 10% 5% 10% Indiv 1 - An individual who is a citizen or a permanent resident of Malaysia. Indiv 2 - An individual who is neither a citizen nor a permanent resident of Malaysia. 150 Individual Income Tax Rates - YA2020 Rate Tax Chargeable Income (RM) % (RM) On the First 5,000 0 Next 15,000 On the First 20,000 150 Next 15,000 3 450 On the First 35,000 600 Next 15,000 8 1,200 On the First 50,000 1,800 Next 20,000 14 2,800 On the First 70,000 4,600 Next 30,000 21 6,300 On the First 100,000 10,900 Next 150,000 24 36,000 On the First 250,000 46,900 Next 150,000 24.5 36,750 Company with paid up capital more than RM2.5m 24% Company with paid-up capital of not more than RM2.5 million and with annual sales of not more than RM50 million On first RM600,000 17% Subsequent Balance 24% Non-resident company 24% Trust body (resident or non-resident) 24% 5 UBAT3123/UBAT3124 ADVANCED TAXATION Stamp duty Rate % Sale of property For every RM100 or part thereof. On the first RM100,000 On the next RM400,000 On the excess over RM500,000 1 2 3 Sale of shares On every RM1,000 or part thereof 0.3 b) Encik Rashid and his business partner distribute wireless electronic accessories to various outlets in the country. The business is carried out through a general partnership which he and his business partner each contributed RM80,000 to the partnership. Based on the business sales and his share of profits, his chargeable income for YA2020 is RM260,000. Encik Rashid and his partner are interested in forming a Limited Liability Partnership (LLP) to carry on the business in the future and would like to know the tax implications from doing so. Required: 1) State two reasons why a Limited Liability Partnership can be a most efficient vehicle to carry on a business. (2 marks) ii) Compute Encik Rashid's income tax liabilities for YA2020 under the general partnership and LLP respectively. Assume that he has no other income. (5 marks) iii) From the computations in (ii) above, advise Encik Rashid on which partnership is more tax efficient for him. (1 mark) [Total: 35 marks] Real Property Gains Tax Rates Company Indiv 1 Indiv 2 Disposed within 3 years 30% 30% 30% Disposal in 4th year 20% 20% 30% Disposal in 5th year 15% 15% 30% Disposal in 6th year and thereafter 10% 5% 10% Indiv 1 - An individual who is a citizen or a permanent resident of Malaysia. Indiv 2 - An individual who is neither a citizen nor a permanent resident of Malaysia. 150 Individual Income Tax Rates - YA2020 Rate Tax Chargeable Income (RM) % (RM) On the First 5,000 0 Next 15,000 On the First 20,000 150 Next 15,000 3 450 On the First 35,000 600 Next 15,000 8 1,200 On the First 50,000 1,800 Next 20,000 14 2,800 On the First 70,000 4,600 Next 30,000 21 6,300 On the First 100,000 10,900 Next 150,000 24 36,000 On the First 250,000 46,900 Next 150,000 24.5 36,750 Company with paid up capital more than RM2.5m 24% Company with paid-up capital of not more than RM2.5 million and with annual sales of not more than RM50 million On first RM600,000 17% Subsequent Balance 24% Non-resident company 24% Trust body (resident or non-resident) 24% 5 UBAT3123/UBAT3124 ADVANCED TAXATION Stamp duty Rate % Sale of property For every RM100 or part thereof. On the first RM100,000 On the next RM400,000 On the excess over RM500,000 1 2 3 Sale of shares On every RM1,000 or part thereof 0.3 b) Encik Rashid and his business partner distribute wireless electronic accessories to various outlets in the country. The business is carried out through a general partnership which he and his business partner each contributed RM80,000 to the partnership. Based on the business sales and his share of profits, his chargeable income for YA2020 is RM260,000. Encik Rashid and his partner are interested in forming a Limited Liability Partnership (LLP) to carry on the business in the future and would like to know the tax implications from doing so. Required: 1) State two reasons why a Limited Liability Partnership can be a most efficient vehicle to carry on a business. (2 marks) ii) Compute Encik Rashid's income tax liabilities for YA2020 under the general partnership and LLP respectively. Assume that he has no other income. (5 marks) iii) From the computations in (ii) above, advise Encik Rashid on which partnership is more tax efficient for him. (1 mark) [Total: 35 marks]