From 1st July 2008 FD is only RM60,000 if you own Property over RM1m

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Effective 1 July 2008, approved participants who have purchased and owned property which were bought at RM1 million and above in Malaysia are eligible to apply for exemption from placing the full FD amount required of MM2H participants. They only have to comply with the basic financial requirement of FD or RM 60,000. This amount may not be withdrawn until the participants decide to terminate their participation in MM2H programme,

Please find all the details HERE

Five minutes later I went back to the site and it had changed!!!!!!!!!!!!

Effective 1 July 2008, NEW APPLICANTS who have purchased and owned property which were bought at RM1 million and above in Malaysia are eligible to apply for exemption from placing the full FD amount required of MM2H participants. They only have to comply with the basic financial requirement of FD or RM 60,000. This amount may not be withdrawn until the participants decide to terminate their participation in MM2H programme,
   

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So it's real now 

And below that :

"New applicants have to observe the following conditions:

1.The purchased residential  property may be a fully-completed unit or one under construction.  For any property purchased, applicants aged below 50 and those aged 50 and above must produce copies of payments made to  developers, amounting to a minimum of  RM 300,000 or RM 150,000  respectively, in place of the required Fixed Deposit under this programme.    This amount does not include legal fees, transfer fees, commissions and any other related payments.

2.The property must cost a minimum of RM 1 million OR
3. Several  properties  totalling RM 1 million and above can be accumulated for this exemption.

4.The exemption may be considered for residential property which was bought within 5 years of application to participate in MM2H programme.

The following documents are required to be submitted for the financial exemption :

    * Certified copy of Sale and Purchase Agreement

    * Certified copy of Transfer of Ownership /Transfer of Deeds(if applicable)

    * Proof of mortgage loan payment ( if applicable)

    * Proof of Quit Rent/Assessment Rate Bill payment (if applicable)

    * Certified copy of Title Deed/Land Title (if applicable)

The supporting documents must be submitted together with the new application to Malaysia My Second Home Centre."

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Good news! 

You can not buy a half decent flat, in a semi-decent area, with two bedrooms -   for less than RM1m (£153,575) in Edinburgh.  For various reasons the property Market in Edinburgh is holding firm - and some even have made a small appreciation.

Am am I right in thinking that the interest on the FD RM60,000 (£9,214.527) would be tax-free?

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HI,

My understanding is that it would not be tax free as it is interest (income) earned in Malaysia. As it is only at 3.5% ( or thereabouts anyway) about 350 quid a year on RM60K not really worth worrying about.

Cheers

Brian

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Hi Brian

one of the advantages is, that any FD below 100K or fixed for >1 year is tax free.

Besides of that they deduct a tax of 5% only!

I think with that all of us used to european taxes can live happily!

Ciao

Udo

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Thanks Udo,

Did not know this I thought it was taxed. My 150K is deposited for a year so I guess I pay no tax.

Cheers

Brian

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Brian,
If my understanding is correct you may be taxed. I think I read somewhere that if you want to place more than 100k on FD, do it in two seperate lots. I think anything over 100k automatically attracts a 5% tax (presumably deductable at source)!

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Here's what it says in MoT site:

http://www.mm2h.gov.my/faq6.php


[INCOME TAX
Q What kind of taxes are the participants of this programme normally subjected to?
A Income tax is imposed on income earned from investments in local companies and local share market. Please refer to www.hasilnet.org.my for more details on the tax structure.

Q Is the interest for their fixed deposit taxable? Some say it is taxable, other it is not taxable. If the deposit amount exceeds RM100, 000.00 OR if the deposit period is one year. What is the exact regulation?
A Interest earned by an individual from fixed deposit account is exempted in the following situations:-
i. Period exceeding twelve months or more – any amount of interest.
ii. Period not exceeding twelve months – interest on fixed deposit
account of up to a maximum of RM100,000.00.

Q Is income remitted from abroad taxable?
A Before year of assessment 2004 income remitted from abroad to Malaysia (apart from pension) is subject to tax. However, from year of assessment 2004 all income remitted from abroad is not subject to tax.

Q Does the participant have to submit any personal tax declaration to the Income Tax Department of Malaysia, like Malaysians have to?
A Yes.

Q If the participants have to submit income tax return to the Income Tax department, are they entitled to any exemptions under the programme?
A They will only be taxed on the income earned in Malaysia after taking into account the personal tax allowances. The income will be taxed according to a progressive tax rate structure.

Q I am a German in which my country has a `double taxation agreement’ with Malaysia. I have an early pension and if I stay in Malaysia for at least 184 days, my pension scheme will not be taxed by the German Government and will also not be taxed by the Malaysia government. Is this true?
A Under this Programme, pension remitted to Malaysia is exempted from tax.

MALAYSIA MY SECOND HOME CENTRE (MM2H) ]

Regards,
BB

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Does this mean I have to own the $1mil property before I apply? My only concern is that this means that capital gains tax applies when I want to sell it? Is that right?

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Does this mean I have to own the $1mil property before I apply? My only concern is that this means that capital gains tax applies when I want to sell it? Is that right?

See the following Q&A on the following website:

http://www.mm2h.gov.my/faq4.php

Q Am I subjected to the property gain tax if I make a profit from selling my house?
 
A No.

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Q Am I subjected to the property gain tax if I make a profit from selling my house?
 
A No.

Fizzy:  Am I right in saying that the UK Tax Man could "get you" if you still own a Home in the UK?  ....and will try to get you on Inheritance Tax, eventually, dependent on your Estate?

If I am right ....  how do HMRC know?...Or is it "Big Brother" again?

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Thanks Fizzychickensoup. But it's still not clear to me how the process works. From reading about the RM$1mil option, it seems one has to already own the property before one applies (or is an intention to buy enough?) for the Second Home scheme since you have to show documentation such as a title or bank mortgage? If that is so, technically it seems to mean that the purchase was done before the visa was issued. Also, this would mean one needs permission from the government to buy the home?

 

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Fizzy:  Am I right in saying that the UK Tax Man could "get you" if you still own a Home in the UK?  ....and will try to get you on Inheritance Tax, eventually, dependent on your Estate?

If I am right ....  how do HMRC know?...Or is it "Big Brother" again?

If you rent your UK property you would be expected to complete a Tax Return. Whether Tax is owed or not would depend on a number of factors including how creative your accountant is

If your estate is valued above a certain amount on your death (can remember exactly how much) it would be subject to IHT. Although the law changed last year, and a certain amount is transferable.

There are many ways the Tax man could find out.
Assuming you were receiving a state pension, your Will Executor would be obliged to inform the Govt. If you died abroad, your Embassy or High Com would be involved especially if repatriation was the case.

"We have ways and means" as they say

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.... it seems one has to already own the property before one applies (or is an intention to buy enough?) for the Second Home scheme since you have to show documentation such as a title or bank mortgage? If that is so, technically it seems to mean that the purchase was done before the visa was issued. Also, this would mean one needs permission from the government to buy the home?

Hi sazz,
I see what you mean, and maybe you are right. I know that quite a few people who join MM2H have been working here before they retire, and indeed have already acquired a property or two. Therefore this new ruling may be for that group of people.

If you joined the scheme, using the full deposit route and then bought a RM1m+ property, your could certainly use the "Sales & Purchase Agreement" to have all but RM60k released from your FD.

Foreigners can buy multiple properties in Malaysia. I am not aware of any restriction, and now this is also the case for MM2Hers, whereas previously your could only purchase a minimun of two. I guess it is all good for the 'property sector'

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About IHT in UK.........

Inheritance Tax is a very simple tax – a charge of 40% is made on the net value of everything that you own above a designated threshold which is called the Nil Rate Band (commonly referred to as the NRB).

It is levied on the net value of everything that you own, including your main residence, any subsequent properties, any cash savings & investments you may have, cars, boats, personal effects (jewellery for example) and even the value of your life assurance policies.

Currently the NRB threshold for each individual for the tax year 2008/9 is £312,000 which will rise in stages to £350,000 in 2010/11. In addition, any portion of NRB unused when a spouse or civil partner dies may be transferred to the surviving spouse or civil partner and used when calculating their liability for Inheritance Tax when they die.

Hope this helps.