Question
subject taxation Siblings, Aishwarya, Dhanya and Ganesh own properties around Malaysia and derive rental income from these properties. Listed below are the properties owned by
subject taxation
Siblings, Aishwarya, Dhanya and Ganesh own properties around Malaysia and derive rental income from these properties. Listed below are the properties owned by them with the market value as at 31December 2019:
Market value
RM
Condominium in Penang - owned by Aishwarya1,200,000
Terrace house in Seremban - owned by Dhanya450,000
Bungalow in Kuala Lumpur - owned by Ganesh1,900,000
Shophouse in Ipoh- owned by Aishwarya1,000,000
4,550,000
All the properties were purchased without any external borrowings. The siblings decided to set up a company, ADG Properties Sdn. Bhd. (ADG), transferred all the properties owned by them to that company. Their intention is for the company to manage the rental collection and to acquire further properties for rental purpose. They do not intend to provide any ancillary services for any of the rental properties.
ADG will acquire the properties by issuing ordinary shares equal to the value of the properties to the siblings. They will transfer the properties to ADG on 31 December 2019 and ADG will start to collect all rentals from January 2020.
On 31st August 2021, ADG disposed off the condominium in Penang for a sum of RM 2,000,000 and incurred agent fees of RM25,000 for the disposal.
Required
The siblings have approached you as a tax consultant for advice on the tax impact on the forming of ADG Properties Sdn. Bhd. and the transfer of the properties to ADG. Your advice should consider the following aspects:
question 1
The stamp duty liability for the transfer of the properties. You need to show the calculation for the stamp duty liability
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started