The gain is calculated from price at time of disposal less price at time of acquisition.

The price at time of acquisition by initial owner (deceased) is not relevant.

Let's say now you dispose it at RM100K now. Perhaps it was transferred to her name as beneficiary 2 years ago on 13/12/2009. LHDN will assess the market price of the property at that date - 13/12/2009 (or thereabouts).

Let's assume that it was RM80K at 13/12/2009, so the gain is:

RM100K - RM80K = RM20K.

It is not nett gain at 5% of RM20K.

Acquisition price also includes cost of renovations, legal fees, agent fees, etc. Add that to acquisition price - perhaps RM5K

Final acq price = RM85K.

Disposal price also includes legal fees, agent fees, etc. So you deduct that from disposal price - perhaps RM8K.

Final disposal price = RM92K.

Nett gain = RM92K - RM85K = RM7K.

Taxable gain - 5% of RM7K = RM350.00

However, you would need to pay 2% of the purchase price upfront first. LHDN will refund the rebate to you later once they've processed your file.

* All receipts evidencing renovations, legal fees, agent fees - must be submitted.

* In the Form CKHT 1A (for vendor) - at the part where price of acquisition is required to be filled up - LEAVE IT BLANK. LHDN will fill it up with their assessed market price and they'll do the final math.

Normally in such arrangements, the SPA will state the higher price, but in the SPA it would state that you have received a further 10k as deposit/part payment. Or a letter of acknowledgement of payment is issued by you to the purchaser confirming that a further 10k has been paid.

Later when the balance purchase price is received, 10k goes to the purchaser.

In such arrangements, the purchaser has to agree to bear the difference between the 10k increase of RPGT. If he doesn't agree, then the deal would not go through. He can't expect you to pay for it when he benefits from the 10k increase.

There's nothing to protect you as the seller, it is more to protect the purchaser so as to prevent you to turn around and claim that the balance purchase price is 90% of 110k and not 90% of 100k which is the actual situation.

That's all.