Chris1855

Yes that's right BB. I have been lurking here but only just opted to get involved. Question for you, is there a way to draft a will which will automatically transfer ownership to the surviving partner, without all this hassle

bakedbean

Ours is in a Trust. It's supposed to automatically transfer to me. But my idea of automatic and their idea of automatic is not the same.

Well Chris, I'm neither a lawyer or a will specialist so cannot answer that one.

Chris1855

Thanks for the reply, I will consult a lawyer on this, hopefully there is a way around paying tea money to get ownership of your own property !!!

JC3

Correction. There is such a rule. But I think it may have started much earlier possibly around 1992 (FIC Guidelines). I'll check.

JC3

Hi,

Please ignore the following from my previous post “Any stamping of SPA made after 1 July 2012 is subjected to these changes” as it’s misleading out of context.

Here’s a Malaysia Property Investment Guide 2015 by Jones Lang LaSalle.
It gives some of the background to Foreign Property Ownership (Page 8) and State Authority Consent (Page 9).

As already stated, sale of properties by all foreigners in Penang is only allowed 3 years after signing of the Sales and Purchase agreement.

From what I can see the ‘no re-sale within 3 years’ restriction was started many years ago with the Foreign Investment Committee (FIC) Guidelines, since repealed, but this restriction has been kept alive by the Penang State Authority, and still applies today. In Malaysia, land is a state matter.

JC3

Stuurman

The 3 year lock in is Penang state law and I know of another case where the husband passed away and the counter was reset to 0. (I think I told you about that case a while ago BB, she lived in Alila) She even already had a buyer for their joint owned property but that fell through because she wasn't allowed to sell. If I remember well she tried to appeal that decision but was also turned down.

BB, how about the timing for the RPGT? Has that been reset as well?

bakedbean

Yes i remember you saying about that lady. Can't remember if it was on here or another place.

I'm not planning to sell within 3 years so it's probably not too much of an issue for me...the three year lock in.

The RPGT.....oh yes I'm just waiting for Trustees to mention that hahaha I'm interested to see what happens. If they are going to work out any capital gains (from myself to myself? Serious?) then they need to take into account any renovation costs as well. Nobody has asked me so far LOL. I'll keep updated on this topic anyway. Interesting times.

They go through the motions here but the dots don't always get joined up. But we know that, don't we

columbine

I don't think there would be RPGT in this kind of transfer as it would be the original purchase price of the property from joint names to the remaining spouse at the same price.

JC3

I’m left wondering what RPGT would be payable on a subsequent sale, and whether the RPGT clock is re-set to zero (at transfer to spouse) on some or all of the property’s value.

E.g. Would the RPGT payable on subsequent sale be:
a) 30% or 5% from the date of original acquisition ?
b) 30% or 5% from the date of transfer ?
c) Half at rate a) and half at rate b) ?
d) Something else ?

The RPGT rates for non-resident individuals are as follows:

• Disposal within five years after the date of acquisition 30%
• Disposal in the sixth year after the date of acquisition or thereafter 5%

JC3

Gunnar45

I had a similar case in France, since I inherited half of our home, I had to pay RGPT on that half only when I subsequently sold the condo.
(We had owned the place long enough for my half to be free of RGPT)
That is quite logical and would match alternative 'c' in JC3 post above.

Question remains of course, do the MY authorities see it in the same way?
A small indication that they actually do is:
If one reads through the Q & A's of Real Property Gains Tax 101 (Part 2) | Malaysian Taxation 101, one finds that the value of an inherited part of a jointly owned property shall be considered at present market value, not at the original purchase price.

Meaning they do consider that the value of each individual owners separate part may differ depending on the date of acquisition.

bakedbean

Thanks for that link Gunnar. Will have a good read through.

My property agent is suggesting to me that RPGT is not applicable since the half-share is a "gift" rather than a "sale", but will everyone think so? Anyway, I shall query in my next torpedo to the Trustees.

Gunnar45

It is difficult to get straight answers from the web, the information one finds is contradictory.
The below site states that there is no RGPT because the inheritance is calculated at original purchase price value and it is therefore no gain!
Death and Taxes | Malaysia property news and resources

But the Malaysian Taxation 101 Q&A states that the inheritance is valued at present value. #11 in the Q&A highlights this.

But regardless, as there is no inheritance tax in Malaysia there shouldn't be any taxes in either case, I mean it sounds a bit strange if the tax exempt inherited real estate or inherited part of it would be subject to RGPT at the time of inheritance.

bakedbean

Thanks for another good link Gunnar Malaysia works in mysterious ways.

bakedbean

Well I have one bit of possible good news. I say "possible" as I only believe things when I see them these days.

But looks like my Will "adviser" has been somewhat usurped by the solicitor of the Trust executor (boy, this is complicated) and the executor is saying "solicitor has advised that the 3 years lock in period is based on the date of Sale & Purchase agreement. Therefore in your situation the 3 years lock in period will not apply since the (half of) property is not acquired by sale."

Has common sense prevailed for once? On the face of it, it seems so. Of course, unless I sell the property, I won't know for sure. However, it would seem that the Penang authorities are having a change of mind on this ruling, or at least a change of interpretation of rules.

I know of at least one expat, in my predicament (spouse passed), who got stung with another 3 year lock-in.

BEVS

Oh goodness. I do hope so for you.