BAC4644 UNIT TRUST/CLOSED END FUND/REIT

Question 1

Public Trust was formed on 1.2.2018. On 1.4.2018, it purchased an office building in KL

for RM56 million. The building was fully tenanted and the rent receivable per month was
RM 200,000. The trust also had the following interest income from Malaysian financial
institution and other sources of income for year ended 31 Dec 2018.
RM’000
Interest received 300
Interest accrued 30
Interest receivable 10
340

Profit on sale of quoted shares 300.

Profit on sale of shares listed overseas and
Remitted to Malaysia 20
Less: Loss on disposal of shares (10)
310

Dividends from Malaysian companies (single tier) 750

Exempt dividends 50
Overseas dividends received in Malaysia 120
920

The following expenses were incurred for the building which it purchased for the period
1.4.2018 to 31.12.2018
RM’000

Fire insurance 10
Cleaning and rubbish disposal 3
Assessment and quit rent 12
Security 50
Lift service charges 12
87
Other expenses incurred for the year are:

Trustees remuneration 100

Office rent and incidental expenses 10
Fund management fee 200
Secretarial, audit and accounting fee 50
Telephone, printing and stationery expenses 20
Maintenance of unit holders’ register 40
Traveling 10
430

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BAC4644 UNIT TRUST/CLOSED END FUND/REIT

Included in the purchase price of the property were the following plant & machinery:

RM’000
Fire protection system 700
Air conditioning system 2,000
Alarm system 100
Lifts 3,000
Generator 200
Refuse disposal system 20
6,020

Assume the rate of capital allowance of 14 % for plant and machinery and the paid up
capital is below RM 2.5 million at the beginning of the basis period, calculate the income
tax payable by Public Trust

Question 2

AmInvest (Am) is approved by SC to invest in RP and securities. It is an approved REIT

as stated in S61A of ITA. The Income statement for year ending 31.12.2018 is as
follows:-
RM’000
Income
Rental income (gross) 700
Dividend income (Note 1) 20
Dividend income (exempt) 12
Debenture interest (not exempt) 4
Gain from realization of securities 44
780
Expenses
Rates and assessment 40
Maintenance of buildings 100
Salaries and allowances 40
Interest expense on loan to acquire shares 10
Depreciation 10
Telephone, printing 10
Donation to approved charity 4
Maintenance of register of shareholders 4
Audit, accounting and tax services 8
Advertising and promotion 40
Manager’s remuneration 184
450

Net profit 330

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BAC4644 UNIT TRUST/CLOSED END FUND/REIT

Notes:
1. Dividend income is derived from Malaysia and is single tier
2. Capital allowance for the year is RM 12,000.

Required:

i) Compute the chargeable income for YA 2018 if:

a) distribution to unit holders is RM 245,000

b) distribution to unit holders is RM 100,000

ii) If the unit holder is a resident company or a resident individual, how much
should Am withhold if the income is exempt? And explain whether this is a
final tax or not?

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