Real Property Gains Tax       a. Currently, the date of acquisition of shares in a real property company is shifted forward to the date of acquisition of additional real property or shares or both by that real property company if the defined value of such additional acquisition is equivalent to or exceeds 50% of the defined value of the real property or shares or both it already owns. It is proposed in the Finance Bill that the proviso to paragraph 34A(2) of Schedule 2 to the Real Property Gains Tax Act, 1976 which contains the above legislation be deleted. The proposed amendment is to be effective from October 17, 1997. b. Under present legislation, the acquisition price of shares in a real property company is deemed to be an amount determined in accordance with the formula :- A     x C B     Where A. is the number of shares deemed to be a chargeable asset; B. is the total number of issued shares in the relevant company at the date of acquisition of the chargeable asset; and   C. is the defined value of the real property or shares or both owned by the relevant company at the date of acquisition of the chargeable asset. It is proposed in the Finance Bill that the above formula for determining the acquisition price be applied only to a chargeable asset which is deemed to be acquired on the date the company becomes a real property company. For an acquisition of a chargeable asset where the date of acquisition is the date the chargeable asset was actually acquired, the acquisition price will be the acquisition price as defined for real property gains tax purposes (i.e. the amount or value of the consideration in money or money's worth paid), or under certain specified circumstances, the market value. The above amendment is to be effective from October 17, 1997.

[page 17 of 27] | Back | Contents | Next | | Home | This report is reproduced with permission from Kassim Chan Tax Services Sdn Bhd (36421-T) and Deloitte Touche Tohmatsu Tax Services Sdn Bhd (151497-P). 7th Floor, 3 Cangkat Raja Chulan 50200 Kuala Lumpur, Malaysia or P.O.Box 11151, 50736 Kuala Lumpur, Malaysia. Telephone: (603) 232 0711, Facsimile: (603) 2304746, (603) 230 0585 No part of this report may be reproduced in any form without the prior consent of Kassim Chan Tax Services Sdn Bhd and Deloitte Touche Tohmatsu Tax Services Sdn Bhd. Another Malaysian resource site designed and hosted by MIR Communications Sdn Bhd.