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Gain on Disposal of Real Property in Malaysia

Capital Receipt or Revenue Receipt?

Mervyn Ong (Director, Tax Advisory)
03/09/2019
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Many real property owners, whether an individual or a company, saw their worth increase significantly since the year 2010 due to the bull run in the real property market. Even though the real property market has somewhat started to cool down since 2017, many real property owners are still staring at substantial increases in their real property values.

Those real property owners who are looking at cashing out now will see a substantial gain upon disposal of their real property. Now the question is this: is the gain on disposal of real property a capital receipt or a revenue receipt?

A layman’s answer to that question would be capital receipt. Generally, Malaysia does not impose tax on capital receipts except in certain situations where the receipt arose from the disposal of real property or shares in a real property company, which is taxable under the Real Property Gains Tax 1976 (RPGTA), or where the capital receipt is treated as a revenue receipt. Continue reading >>>

 

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