QUOTE(Yggdrasil @ Feb 12 2019, 08:43 PM)
It was a residential property owned by their parents from super long time ago (1950s). It's so old that the land title was not recognised and needed another 3 months or so to get the new one (after engaging professional lawyers/connections from buyer's side). Otherwise, it would have been longer.
And yes it was passed to the children (seller) in 2017 through their will. The children sold it in 2018 before the new RPGT taxed was imposed at 5% for 5 years and beyond. Previously was 0%. They sold for 0% RPGT without the special exemption.
No. It should be sold at 5 years and beyond and taxed at 5% (new RPGT).
Please consult a tax expert or LHDN to make sure as it could be on a case by case basis.
I'm positive that I am correct because a transfer has no intention for sale/business. One of the main reasons RPGT was introduced was to prevent property prices from increasing like mad because people think it's profitable to buy and sell.
Furthermore, there is no acquisition price (e.g. market value) for transfer between family members on the date of transfer. No cash is exchanged.
Do correct me if im wrong. If there are gains and are RPGT taxable, the rate will apply accordingly. 30% or 20% and so on. The only thing at play here is whether there is actual transfer of names between parents and children then subsequently sell to third party for a gain. If there is actual transfer of names from parents to children to third party and there is gain, then it is RPGT taxable.
If Parents transfer the property to children at Year 2017 (no cash exchange), LHDN will still value the property (that is where your stamp duty value actually comes from) and this forms the basis of the acquisition price for the property by the children.
Parents buy 2013 at RM100k. Transfer to children 2017 (LHDN value at Rm 200k). Children sell 2018 at RM RM 250k. Less than 3 years @ 30% tax.
Children Acquisition price is RM 200k and acquisition date is 2017.
Sell RM 250k = RM 50k gain. Tax at 30% = RM 15k RPGT payable.
Parents buy 2013 at RM100k. Transfer to children 2017 (LHDN value at Rm 200k). Children sell 2018 at RM RM 200k (no gain no loss). Less than 3 years @ 30% tax. No gain, nothing to tax at 30%.
Children Acquisition price is RM 200k and acquisition date is 2017
Sell RM 200k = RM 0 gain. RM 0 gain. Tax at 30% = RM 0 RPGT.
FOR TS case and based on your previous comments
QUOTE(Yggdrasil @ Feb 10 2019, 08:39 PM)
It depends on whether A and B are related.
In 2015, if the transfer of the property is between spouses, parents, child, grandparent or grandchild then disposal price = acquisition price. So it's gain of RM100,000 taxed at 5%.
Otherwise, it's the gain (from purchase price in 2015) taxed at 30%.
disposal price = acquisition price <<< is not same with disposal date = acquisition date.
Parents passed to children on Year 2015 (deemed disposal date for parents 2015 and as acquisition date for children 2015. Parents disposal price = children acquisition price, and acquisition price is valued by LHDN), and children sold to third party on Year 2017(deemed as disposal date 2017, and disposal price is as states in SPA between children and new buyer).
For a gain of RM 100k with only 5% RPGT tax in under 3 years time is impossible.
Like I've mentioned earlier, as long as there is transfer of name, the RPGT time frame resets to Year 0.
Anyhow, I stand corrected. Cheers. Good discussion.This post has been edited by edyek: Feb 12 2019, 11:13 PM