Compute the real property gains tax

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Reference no: EM132773462

Question - Sheikh Ali, a citizen of Qatar, arrived in Malaysia on 20 March 2014. On 2 June 2014, Sheikh Ali acquired a condominium for RM5,200,000, incurring stamp duty of RM50,000 and legal fees of RM10,000.

Sheikh Ali renovated the condominium, incurring enhancement costs of RM80,000 and purchased furniture for RM19,000. Following a dispute with the seller of the condominium, Sheikh Ali incurred legal fees of RM5,000 to defend his legal title to the condominium.

In September 2017, Sheikh Ali received an offer to sell the condominium to Zaheer, who paid him a deposit of RM9,000. However, due to a lack of loan facility, Zaheer decided not to pursue the acquisition and the deposit was forfeited to Sheikh Ali.

On 5 April 2018, Sheikh Ali signed a sale and purchase agreement to dispose of the condominium to Avenue Sdn Bhd for RM5,400,000. The agent's brokerage fees for the sale were RM15,000.

Required -

(a) Compute the real property gains tax (RPGT) arising from the disposal of the condominium by Sheikh Ali to Avenue Sdn Bhd. Clearly identify the disposal price, the acquisition price and the tax rate applicable to the disposal.

(b) Advise Sheikh Ali on the following:

(i) His RPGT filing obligations on the disposal of the condominium.

(ii) Whether he is entitled to elect for the lifetime private residence exemption.

Reference no: EM132773462

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