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Determination of Chargeable Gain / Allowable Loss

  1. Chargeable gain
    If the disposal price of the asset exceeds the acquisition price, there is a chargeable gain.

  2. Allowable loss
    If the disposal price of the asset is less than the acquisition price, there is an allowable loss.

    An allowable loss shall be allowed as a deduction to reduce the chargeable gain of a person in the subsequent disposal of chargeable asset in the same year of assessment.

    Unabsorbed losses shall be carried forward to be deducted against chargeable gains from disposal of other assets in subsequent years of assessment.

    The first year of assessment for the deduction of unabsorbed losses commences in the year which there is a chargeable gain from the disposal of asset. Any remaining unabsorbed losses may be carried forward and restricted to a period of 9 consecutive years of assessment.

  3. No chargeable gain or allowable loss shall arise where the disposal price of an asset equal its acquisition price.

  4. The computation of chargeable gain or allowable loss is as follows:

 

RM

RM

RM

The amount or value of the consideration in money or money’s worth for the disposal of the asset

 

xx

 

Less: Allowable expenses

 

 

 

-  The amount of any expenditure incurred on the asset for the purpose of enhancing or preserving the value of the asset, being expenditure reflected at the time of disposal

x

 

 

-  The amount of any expenditure incurred in establishing, preserving or defending disposer’s title to or right over the asset

x

 

 

-  The incidental cost of disposal

x

xx

 

Disposal price                                                                           

    

xx

Less:

    

 

Consideration in money or money’s worth given by or on behalf of the owner for the acquisition of the asset

  

xx

  

Add: The incidental cost of acquisition

  

x

  

 

  

xx

  

Less :

- Compensation for any kind of damage to the asset or depreciation of asset

x

 

  

-   Sum received under a policy of insurance for damage to the asset or depreciation of asset

x

 

  

-   Amount of deposit forfeited to the disposer

x

xx

 

Acquisition price

    

xx

Chargeable gain / Allowable loss [section 7 RPGTA]

    

xx

Less : Exemption under paragraph 2 of Schedule 4 (individual only)

    

xx

Chargeable gain

    

xx*

Less : Allowable loss from previous disposals

    

xx

Chargeable gain

    

xx

Tax payable : xx* @ applicable tax rate

    

 
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