QUESTION 1

A trust has been set up by Mr. Handsome for the benefit of his beneficiaries. In accordance
with the trust deed, Mr. Good, a resident of Malaysia for income tax purposes, has been
appointed as a trustee to the trust body. The trust deed contains the following terms:

(i) Evelyn Handsome (Mr. Handsome wife) be paid RM900 per month throughout her
life time till she remarries.
(ii) RM1,000 per month be paid to his only daughter until she reaches 21 years old, after
which she would be entitled for one quarter (1/4) of the trusts divisible income.
(iii) The trustee, Mr. Good is allowed RM12,000 per annum for services rendered in
administering the trust body.
(iv) The remainder of the trust income is to be divided as follows:

(a) One third (1/3) to his sister.

(b) The remaining two thirds (2/3) to be divided between his two sons as deem
fit by the trustee for their maintenance and education expenses.

The trust body derived the following income for the year ended 31.12.2015:

RM
Business (Malaysia) 160,000 (gross)
Rental (Malaysia) 100,000 (gross)
Interest (United Kingdom remitted to Malaysia) 48,000
Dividend (Malaysia) 110,000 (net)

Other information;

(a) In the year 2015;

His only daughter celebrated her 19th birthday
Both his sons were attending local universities

(b) Expenses relating to business are as follows:

RM
Revenue expenses (all allowable) 45,000
Renovation expenses on business premise 30,000
For the year of assessment 2015, capital allowances
claimed and allowed 25,000

(c) Expenses incurred on Malaysia property rented out are as follows:

RM
Ordinary repairs and maintenance 5,000
Fire insurance 3,000
Assessment and quit rent 2,500
 (d) In the year 2015, amounts distributed to the following beneficiaries were:
RM
Eldest son 45,000
Second son 36,000

Required:

i) Calculate the tax payable by the trust body for the Year of Assessment 2015
(current year basis). (Provision to section 61 (2) ITA is not applicable).

ii) Calculate each beneficiarys statutory income from the trust body and section
110 set off (if any) to be given to the respective beneficiaries.

QUESTION 2
A non-discretionary trust has been set up by Mr. Kim for the benefit of his beneficiaries. In
accordance with the trust deed, Mr. Ko, a resident of Malaysia for income tax purposes, has
been appointed as trustee to the trust body. The trust deed contains the following terms:

(i) Madam Eun Sang will be paid RM1,000 per month throughout her life time till she
remarries.
(ii) The trustee, Mr. Ko is allowed RM10,000 per annum for services rendered in
administering the trust body.
iii) The remainder of the trust income is to be equally divided between his two sons for
their maintenance and education expenses.

The trust body derived the following income for the year ended 31.12.2015:

RM
Business 160,000 (gross)
Rental 100,000 (gross)
Interest 48,000
Dividend 110,000 (net)

Other information;

(e) Expenses relating to business are as follows:

RM
Revenue expenses (all allowable) 40,000
Capital expenses 15,000
Capital allowances 15,000

(f) Expenses incurred on Malaysia property rented out are as follows:

RM
Ordinary repairs and maintenance 5,000
Depreciation 3,000
Assessment and quit rent 2,500
Required:

i) Calculate the tax payable by the trust body for the Year of Assessment 2015
(Provision to section 61 (2) ITA is not applicable).

ii) Calculate the tax payable by the trust body for the Year of Assessment 2015
(Provision to section 61 (2) ITA is applicable).

iii) Calculate each beneficiarys statutory income from the trust body under (i) and (ii).