I am in the progress of selling my leasehold factory (Waiting for buyer to sign S&P and pending transfer of ownership). I bought the factory more than 20 years. By right, it shouldn't tax any RPGT if my property sell before 1st Jan 2019.

However, my lawyer told me that my factory case is special, and we need to wait for state government approval to complete whole selling progress. He has no confident that state government approval can be done before 1st Jan 2019, and would like to submit pre 3% tax to government earlier, if finally we not able to obtain state government approval before 1st Jan 2019, we need to pay extra 2% tax (new RPGT is 5% for property bought more than 5 years). Otherwise, government will refund the money to us.

Need your advice. Is my lawyer statement make sense?

Can refer to old topic which was discussed before.

https://forum.lowyat.net/topic/2544709/all

It is considered a conditional SPA if need consent.

Depends on which state, leasehold consent may take 30 days only. Discuss with your lawyer and expedite the sale of your factory. 5% for 20 years inflation is a huge amount

1. So if you cant get state consent by 31st Dec 2018 you are liable to pay 5% RPGT of the profit (less allowed deductible) ..so this is clear.

2. On the amount to be deducted to forward to the tax dept am not sure if this is to be remitted within 30 days from your conditional SPA or
from date of consent ..

3. and the amount to be retained by lawyer to cover this 5% rpgt has not been set yet by the gomen? is it 5% of selling price???
(anyone knows?)

3) Lawyer is required to withold 3% of the SPA price which will be sent to LHDN (for RPGT purpose) once the SPA becomes unconditional.
3% is the standard as far as I knew.

If the RPGT is different with the 3% aka RPGT needed to be paid is less than 3% of the SPA price, then seller requests the refund, while if the final RPGT is more than 3% of the SPA price, then needs to pay the difference of the 3% afterwards.

This post has been edited by cherroy: Nov 22 2018, 09:48 AM

very unlikely state consent will be given before 1st Jan 2019.

your disposal date will be the date of state consent.

it doesn't mean u need to pay additional 2% tax right now..

govt will calculate your RPGT based on 5% of your nett profit.

so if your 3% of your selling price unable to cover that RPGT (taxed based on 5% of the nett profit) then u need to pay the shortfall. Doesn't mean it's 2% (of your current selling price).

What i am keen to know is the guidelines from IRB on this matter with regards to the amount to be withheld for this new 5% rpgt for property bought
after year 2000? Meantime we can only speculate..

amount to be withheld remains at 3%