Renunciation of inheritance by beneficiaries does not constitute a gift for stamp duty purposes; instead, it should be assessed under a nominal fixed duty.

(2 Appeals)

Wong Kian Kheong J:

A. Background

[1] The late Mr Tan Kok Lee@ Tan Chin Chai (Deceased) died intestate on 17 May 2018 and left three beneficiaries, namely:-

(1) the Deceased's widow who is the appellant (Appellant) in the above two appeals (2 Appeals); and

(2) two children of the Deceased, Mr Tan Chun Keat (Mr Tan) and Ms Tan Kai Hui (Deceased's 2 Children).

[2] On 8 August 2018, the Appellant and Mr Tan had been appointed by the Shah Alam High Court as co-administrators of the Deceased's estate (Estate).

[3] In view of the Deceased's intestacy, s 6(1)(e) of the Distribution Act 1958 ( DA ) provides that the Appellant and the Deceased's 2 Children shall each have one-third of the Estate.

[4] The Estate consists of, among others, the Deceased's interest in five pieces of land [Deceased's Interest (5 Properties)].

[5] The Appellant and Deceased's 2 Children executed a "Deed of Family Arrangement" on 2 October 2018 (Deed). According to clause 1 of the Deed (Clause 1), the Appellant and Deceased's 2 Children agreed to distribute, among others, the Deceased's Interest (5 Properties) to the Appellant only. In other words, the Deceased's 2 Children renounced in Clause 1 their entitlements to the Deceased's Interest (5 Properties) under DA [Renunciation (Entitlements under )].

[6] Premised on the Deed, the Shah Alam High Court issued an order on 20 December 2018 to vest the Deceased's Interest (5 Properties) in the Appellant only (Vesting Order).

[7]Pursuant to the Vesting Order, the Appellant and Mr Tan (as co-administrators of the Estate) executed five "Forms 14A", instruments of transfer of the Deceased's Interest (5 Properties) under the National Land Code, in favour of the Appellant only (Forms 14A).

[8] Pursuant to s 36(1) of the Stamp Act 1949 ( SA ), the Collector of Stamp Duties (Collector) imposedad valoremstamp duty on the Forms 14A (Collector's Assessment). The Collector's Assessment was made on the ground that the Forms 14A concerned "release or renunciation by way of a gift" under item 66(c) [Item 66(c)] in the First Schedule to (1st Schedule).

[9] The Appellant objected to the Collector's Assessment and applied to the Collector to review the Collector's Assessment under s 38A(1) SA (Review Application). The Review Application was made on the basis that stamp duty of RM10.00 should be assessed for the Forms 14A in accordance with item 32(i) in the 1st Schedule [Item 32(i)].

[10] The Review Application was dismissed by the Collector [Collector's Dismissal (Review Application)]. Hence, the Appellant paid the stamp duty in full as stated in the Collector's Assessment and the Appellant then filed the 2 Appeals to the High Court against the Collector's Dismissal (Review Application) pursuant to s 39(1) SA .

B. Sole Issue

[11] The only question posed by these 2 Appeals is whether Forms 14A in this case attract ad valorem stamp duty under Item 66(c) (release or renunciation of property by way of a gift) or a fixed amount of stamp duty of RM10.00 pursuant to Item 32(i) (conveyance or transfer which is not specifically charged with stamp duty). There are conflicting High Court decisions on this issue.

C. Relevant SA Provisions

[12] I reproduce below ss 4(1),16(1) SA , Items 32, 46 and 66 of the 1st Schedule:

"Instruments chargeable with duty

s 4(1)Subject to [ SA ] and subject to the exemptions contained in [ ] and in any written law for the time being in force, the several instruments specified in the First Schedule shall, from and after the commencement of [ ], be chargeable with the several duties specified in such Schedule.

...

Voluntary conveyance inter vivos.

s 16(1)Any conveyance or transfer operating as a voluntary disposition inter vivos shall be chargeable, with the like stamp duty as if it were a conveyance or transfer on sale.

[1st Schedule]

Item 32. CONVEYANCE, ASSIGNMENT,TRANSFER OR ABSOLUTE BILL OF SALE:

Item 46.

Item 66.

[Emphasis added]

D. Conflicting High Court Decisions

[13] In support of the 2 Appeals,