Beneficiaries of an intestate estate can effectively gift their interest in property before full administration, triggering ad valorem stamp duty as applicable under relevant statutes.

JUDGMENT

Alice Loke Yee Ching JC:

Introduction

[1] The Originating Summons filed by the plaintiff on 23 December 2019, is essentially an appeal under s 39 of the Stamp Act 1949 read together with O 55A Rules of 2012.

[2] The plaintiff appeals against the decision of the defendant imposing ad valorem duty on the Memorandum of Transfer (Form 14A) in relation to the following properties:

(a) one whole undivided share of the property held under Geran 186688, Lot 13234, Mukim Rawang, District of Gombak, State of Selangor ("Rawang property"); and

(b) one half (1/2) undivided share of property held under Geran 163976, Lot 9797, Mukim Slim, District of Mualim, State of Perak ("Perak property").

Salient Facts

[3] The facts material to the present dispute are as follows. The plaintiff's husband died intestate on 2 June 2017. The plaintiff together with the plaintiff's daughter were jointly granted Letters of Administration on 20 April 2018. The deceased's estate comprised inter alia, the Rawang property and the Perak property. There were eight beneficiaries to the estate, including the plaintiff.

[4] On 4 September 2018, both the administrators applied for a Distribution Order from the Kuala Lumpur High Court vide Civil Suit No: WA- 24NCVC-1764-09-2018 pursuant to s 60 of the Probate and Administration Act 1959, for all the assets of the deceased to be transferred to the plaintiff as the sole beneficiary.

[5] The other beneficiaries filed an affidavit in the Kuala Lumpur suit consenting to the transfer. On 13 September 2018, the Kuala Lumpur High Court granted the Distribution Order.

[6] In respect of the Rawang and Perak property, the plaintiff's entitlement under the Distribution Act 1958 was 1/4 share. Pursuant to the Distribution Order, the remaining 3/4 entitlement of the other beneficiaries was to be transferred to her.

[7] To effect the Distribution Order, the administrators executed two Memorandums of Transfer (Form 14A) for the Rawang and Perak properties to be transferred to the name of the plaintiff. Form 14A was then submitted for assessment of stamp duty.

[8] The defendant adjudicated the stamp duties to be payable as follows. In respect of the 3/4 share in both properties transferred to the plaintiff from the estate of the deceased, the stamp duty assessed for both was a nominal sum of RM10.00. However in respect of the 1/4 share in both properties transferred to her with the consent of the other beneficiaries, ad valorem duty was imposed. Stamp duties of RM3,600 and RM19,950 were assessed for the Perak and Rawang properties respectively.

[9] The plaintiff was dissatisfied with the defendant's assessment of ad valorem duty as aforesaid. Hence, the present action in this Court.

Decision Of This Court

[10] As the deceased died intestate, distribution of the deceased's estate to his beneficiaries will be in accordance to the Distribution Act 1958 . The succession to intestate estate by beneficiaries is statutorily determined.

[11] However, in this instance, the beneficiaries surrendered their entitlement by filing an affidavit expressing their consent for the assets of the deceased to be transferred solely to the plaintiff. The relevant portion of the affidavit states that "kami telah bersetuju untuk memindahmilik kesemua hartanah-hartanah yang tersebut di atas kepada Benefisiari LAI SIEW YOONG ..."

[12] The Stamp Act 1949 [Act 378] provides for the charging of stamp duty as follows:

Instruments chargeable with duty

4. (1) Subject to this Act and subject to the exemptions contained in this Act 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 this Act, be chargeable with the several duties specified in such Schedule.

[13] Item 66 of the First Schedule of Act 378 is relevant to the factual matrix here.

66 RELEASE OR RENUNCIATION that is to say, any instrument whereby a person releases any property:

(a) If on sale.... The same duty as a conveya