LEARNING OUTCOME
Student are able to explain the estate duty and law governed its exercise
INTRODUCTION
» a form of capital tax which, in essence, levied on the estate of a deceased person passes on death.
» where it is payable, is governed by the Estate Duty Enactment 1941.
» administrated, computed and collected by the Collector of Estate Duty.
» levied and paid upon the principal value of all property settled or not settled which passes on the death of any person.
INTERPENETRATION
» “domicile” means the place where an individual has his permanent home, or to which he intends to return, or in some cases the country of origin. In other jurisdictions the place where an individual has a long established residence or in relation to a company, where it is incorporated.
» “collector” means the collector of estate duty appointed under the Estate Duty Enactment 1941.
» "executor" means the executor or administrator of a deceased person, and includes,— (a) any person who takes possession of or intermeddles with the property of a deceased person; and (b) any person who has applied or is entitled to any court for the grant or resealing of probate or letters of administration in respect of the estate of a deceased person
» "property" includes movable and immovable property of any kind situate or being in Malaysia and the proceeds of sale thereof respectively, and any money or investment for the time being representing the proceeds of sale; and, in the case of a deceased person who was at the time of his death domiciled in Malaysia, includes movable property wherever it may be;
» “property passing on the death” includes property passing either immediately on the death or after any interval, either certainly or contingently, and either originally or by way of substitutive limitation; and “on the death” includes at a period ascertainable only by reference to the death;
Section 5: Property which is deemed to pass on death
Property passing on the death of the deceased shall be deemed to include the following property:
(a) property of which the deceased was at the time of his death competent to dispose;
(b) property in which the deceased or any other person had an interest ceasing on the death of the deceased, to the extent towhich a benefit accrues or arises by the cesser of such interest; inclusive of property the estate or interest in which has been surrendered, assured, divested or otherwise disposed of, whether for value or not, to or for the benefit of any person entitled to an estate or interest in remainder or reversion in such property, unless that surrender, assurance, divesting or disposition was bona fide made or effected 7 years before the death of the deceased, and bona fidepossession and enjoyment of the property was assumed there under immediately upon the surrender, assurance, divesting or disposition, and thenceforward retained to the entire exclusion of the person who had the estate or interest limited to cease as aforesaid, and of any benefit to him by contract or otherwise; but exclusive of property the interest in which of the deceased or other person was only an interest as holder of an office or as recipient of the benefits of a charity or as a corporation sole;
(c) property taken as a donatio mortis causa made by the deceased or taken under a disposition made by him, purporting to operate as an immediate gift inter vivos, whether by way of transfer, delivery, declaration of trust, or otherwise, which shall not have been bona fide made 7 years before his death, or taken under any gift, whenever made, of which bona fide possession and enjoyment shall not have been assumed by the donee immediately upon the gift and thenceforward retained to the entire exclusion of the donor or of any benefit to him by contract or otherwise, subject to the following provisions: In the case of any gift inter vivos made for public or charitable purposes, the words “7 years” in this paragraph shall be read as “1year”;
(d) property which the deceased, having been absolutely entitled thereto, has caused to be transferred to or vested in himself and any other person jointly, whether by disposition or otherwise, including also any purchase or investment effected by the deceased alone or in concert or by arrangement with any other person, so that the beneficial interest therein or in some part thereof passes or accrues by survivorship on his death to such other person;
(e) property passing under any past or future settlement made by the deceased by deed or any other instrument not taking effect as a will, whereby an interest in such property, or the proceeds of sale thereof, for life or any other period determinable by reference to death is reserved, either expressly or by implication, to the settlor or whereby the settlor may have reserved to himself the right by the exercise of any power to restore to himself, or to reclaim the absolute interest in such property or the proceeds of sale thereof;
(f) money received under a policy effected by the deceased on his life where the policy is wholly kept up by him for the benefit of a donee, whether nominee or assignee, or a part of such money in proportion to the premiums paid by him, where the policy is partially kept up by the deceased for such benefit
(g) any annuity or other interest purchased or provided by the deceased either by himself alone or in concert or by arrangement with any other person, to the extent of the beneficial interest accruing or arising by survivorship or otherwise on the death of the deceased.
Where an annuity or other interest referred to above has been purchased or provided by the deceased, either by himself alone or in concert or by arrangement with any other person, the extent of any beneficial interest therein accruing or arising by survivorship or otherwise on the death of the deceased shall be ascertained, and shall be deemed always to be ascertainable without regard to any interest in expectancy the beneficiary may have had therein before the death.
» Domicile in Malaysia
First RM2,000,000 => 0%
Next RM2,000,000 => 5%
Subsequent RM2,000,000 => 10%
» Domicile out Malaysia
First RM400,000 => 0%
Next RM400,000 => 5%
Subsequent RM800,000 => 10%
The Estate Duty Enactment 遗产责任制 1941 and various other Enactments 各种其他法规 relating to estate duty were repealed 废除 with effect from 1 November 1991.
Thus, estate duty is now abolished for any estate belonging to a deceased dying after 1.11.1991
