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38 Real Property Companies (RPC) - Coggle Diagram
38 Real Property Companies (RPC)
Tax implication
shares in RPC = chargeable asset
purpose
prevent avoidance of RPGT
by selling shares in a Co
instead of selling the RP owned by the Co
Conditions
a
controlled Co
cannot be
listed Co
having
NOT > 50 shareholders
controlled by
NOT > 5 members
acquires
RP or RPC shares
(both chargeable asset)
DV = at least 75% of the value of TTA
AP calculation
IF Co
already RPC
when purchase shares
AP = consideration paid
AD: date when the shares were acquired
Co
NOT RPC
when purchase shares
but the Co
turns into a RPC subsequently
AP = A/B x C
A: no. of shares acquired
B: total no. of shares at DOA
C: DV of RP or RPC shares owned by Co on DOA
AD: date when Co turns into RPC
Once the shares are RPC shares, will always be RPC shares
RPC shares liable for RPGT on disposal although at the time of disposal of shares, Co ceased to be an RPC
Loss from RPC shares = Permanent Loss
Para 3(b) shares VS RPC shares
treated as
Para 3(b) shares
AP = transferor's AP + transferor's PE - money payment