Problem
Malaysia Real Property Gain Tax Act 1967
Mr. Ahmad inherited a piece of estate land from his late father who passed away on 7 July 2016. The estate land was originally acquired by his father on 15 October 2011 for RM750,000. In 2013, his father had incurred RM60,000 on drainage and piping due to frequent flooding in the estate. The ownership of the land was transferred to Mr. Ahmad on 1 August 2016 when its market value was RM1.9 million.
On 1 November 2017, Mr. Ahmad transferred the land to a company controlled by him, Prosperous Estate Sdn. Bhd. (PESB) for a consideration of RM2 million. The consideration was satisfied by the issuance of 1.8 million shares of RM1.00 each in PESB and cash of RM200,000.
PESB carried out improvement works at the estate by building a palm oil processing mill costing RM1.5 million. On 1 July 2019, Mr. Ahmad sold his shares in PESB for RM5 million. On 1 November 2019, PESB sold the land and building to an unrelated company for a consideration of RM6 million. Incidental expenses incurred in connection with the disposal were valuation fees RM80,000 and legal fees of RM25,000.
Task
Calculate the real property gains tax payable under the Real Property Gains Tax Act 1976 (as amended) on the respective disposals by Mr. Ahmad and Prosperous Estate Sdn Bhd.