Estate Tutorial

BAC4644 ADVANCED TAX
Question 1
Mr Adrian, a tax resident, died domiciled in Malaysia on 30 June 2021. He left a will and
appointed Mrs Robinson as the executor of the estate. Mr Adrian’s income and expenditure for
the year ended 31 December 2021 is as follows:
RM
Income derived from Malaysia
Manufacturing Business
Profit before tax 180,000
Depreciation 12,000
General Provision of bad debts 6,000
Capital allowance 20,000
Balancing charge 6,000
Bakery Business:
Gross income 80,000
Revenue expenses 30,000
Capital allowance 3,000
Balancing allowance 500
Dividend (single-tier) received on 2 March 2021 6,000

Interest on fixed deposit in RHB Bank (received on 1 October 2021) 10,000
Rental income per month 2,000

(The house was first rented out on 1 February 2021)
Foreign income:
Royalty income received from Singapore 30,000
Only RM15,000 was remitted to Malaysia on 15 September 2021.
Expenditures incurred during the year of assessment 2021:

Cash contributions to an approved institution on 1 December 2021 500
Annuity payable per annum to Mr Adrian’s sister 3,000
Medical expenses for serious disease for Mr Adrian’s child 6,000
Note: At the time of his death, Mr Adrian who is a single parent, has two children, both under 18 years
old.
Required:
Compute the chargeable income of Mr Adrian and his estate for the year of assessment 2021.
1
Question 2
Misman, a Malaysian resident, aged 46, is an entrepreneur. He derived income from business as
well as non-business sources. In August 2021, he was involved in an accident and passed away
on 30 September 2021. He left behind a wife (not working) and two unmarried children. In the
year 2021, his wife and his two children were resident in Malaysia. His brother, Azman, a
Malaysian resident was appointed as an executor of his estate.
Azman provided the following information pertaining to Misman’s income tax return for the
year 2021:
(i) The adjusted income and capital allowance from a trading business were RM 400,000 and
RM 60,000 respectively. The adjusted business losses brought forward from 2020 was RM
50,000.
(ii) Rental income were received from the following properties:
Apartment Semi-detached house

RM RM
Rental income per month 2,000 4,000
Quit rent for 2021 1,200 2,400
Repair & maintenance 1,500 -
The apartment was rented since January 2015. The semi-detached house was
occupied by Misman and his family until September 2021 and effective from 1 October
2021, the house was rented to a tenant.
(iii) Particulars about Misman’ children was as follows:
Bahar Aged 21 years old, studying medicine in India since 2021.

Citra Aged 17, waiting for SPM result
(iv) Misman’s wife was able to trace the expenses paid by Misman from January 2021 until 30
September 2021 as follows:
(a) RM 6,000 to a private nursing home for Misman’s father.

(b) RM 1,500 for his children books.
(c) RM 6,000 for Misman’s life insurance premium.
(d) RM 3,500 for his children’s medical insurance premium.
(e) RM 4,200 for this family’s sport equipment.
(f) RM 1,200 for the broadband subscription fee.
(v) Azman has made cash donation of RM 1,000 from Misman’s business to an approved
institution.
Required:
2
Compute the chargeable income of Misman and the executor of his estate for the year of
assessment 2021.
3
QUESTION 3
Mr. Zacky was born in UK. He has been living in Kuala Lumpur and never left Malaysia since
1985. His wife, Madam Fiona is a Malaysian resident and a full-time housewife. They have three
children, who were all born and are resident in Malaysia. In the year 2021, their first child was
26 years old and worked as an Pharmacist. Their second child was a 23-year-old lecturer and a
part-time PhD student. Their youngest child was 19 years old and studying in Multimedia
University.
On 15th July 2021, Mr. Zacky met with serious car accident. He succumbed to his injuries and
died on 31st July 2021. He had left a will in which he appointed his sister, Christina as the
executor.
Details of his income and expenses for the year of assessment (YA) 2021 are as follows:
Vegetables wholesale and trading business Adjusted income RM135,400

Unabsorbed loss from YA2020 RM1,550
Interest income from fixed deposit account RM3,750
(received on 31st August 2021).
Dividend income from Singapore (remitted RM5,000
to Malaysia on 31st May 2021).
Rental per month of a 5-acre plantation in RM12,000
Pahang
Annuity payable to Madam Fiona. The RM24,000
money was yet to be transferred to her due
to some technical issues.
Approved donation to Furry Friends Farm RM2,500
Animal Shelter 1 March 2021.
In the year up until his death, Mr. Zacky had incurred the following personal expenses.
 Own life insurance premium of RM4,350 for the year.
 Subscriptions of printed magazines , journal and books amounted to RM1,000.
 Broadband payment of RM1,450.
 Complete medical check-up package costing RM450 for himself.
Required:
Calculate the income tax payable for Mr. Zacky and the estate of the deceased for YA2021.

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BAC4644 ADVANCED TAX

Dividend (single-tier) received on 2 March 2021 6,000

Rental income per month 2,000

Expenditures incurred during the year of assessment 2021:

(ii) Rental income were received from the following properties:

Apartment Semi-detached house

(iii) Particulars about Misman’ children was as follows:

Bahar Aged 21 years old, studying medicine in India since 2021.

(a) RM 6,000 to a private nursing home for Misman’s father.

Vegetables wholesale and trading business Adjusted income RM135,400

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