Kelana Suria Sdn. Bhd constructed a factory in 2003 with qualifying building expenditures of RM1,021,500. They claimed industrial building allowance of RM316,665 over 7 years. In 2010, the factory was sold for RM1,250,000 with RM250,000 related to land costs. This resulted in a balancing charge of RM295,165 for Kelana Suria.
Wawasan Gemilang Ltd purchased the factory building from Kelana Suria in 2010 for RM1,000,000. As the entire building is used for medical equipment manufacturing, the full purchase price is considered a qualifying industrial building expenditure.
Kelana Suria Sdn. Bhd constructed a factory in 2003 with qualifying building expenditures of RM1,021,500. They claimed industrial building allowance of RM316,665 over 7 years. In 2010, the factory was sold for RM1,250,000 with RM250,000 related to land costs. This resulted in a balancing charge of RM295,165 for Kelana Suria.
Wawasan Gemilang Ltd purchased the factory building from Kelana Suria in 2010 for RM1,000,000. As the entire building is used for medical equipment manufacturing, the full purchase price is considered a qualifying industrial building expenditure.
Kelana Suria Sdn. Bhd constructed a factory in 2003 with qualifying building expenditures of RM1,021,500. They claimed industrial building allowance of RM316,665 over 7 years. In 2010, the factory was sold for RM1,250,000 with RM250,000 related to land costs. This resulted in a balancing charge of RM295,165 for Kelana Suria.
Wawasan Gemilang Ltd purchased the factory building from Kelana Suria in 2010 for RM1,000,000. As the entire building is used for medical equipment manufacturing, the full purchase price is considered a qualifying industrial building expenditure.
Kelana Suria Sdn. Bhd constructed a factory in 2003 with qualifying building expenditures of RM1,021,500. They claimed industrial building allowance of RM316,665 over 7 years. In 2010, the factory was sold for RM1,250,000 with RM250,000 related to land costs. This resulted in a balancing charge of RM295,165 for Kelana Suria.
Wawasan Gemilang Ltd purchased the factory building from Kelana Suria in 2010 for RM1,000,000. As the entire building is used for medical equipment manufacturing, the full purchase price is considered a qualifying industrial building expenditure.
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Dec-11
1. Kelana Suria Sdn. Bhd is in business of manufacturing rubber. For the
financial year ended 31st December, the company incurred the new factory expenditure for the purpose of its business.
RM Cost of land 120,000 Legal fee for the land acquisition 12,500 Legal fee (factory) 20,000 Cost of demolished a non factory building 62,000 Contraction cost 474,500 Drainage and irrigation 50,000 Labour and transportation cost 250,000 Cost of changed land status 62,500 Cost of plant 40,000 Cost of preparing a site to install the plant 125,000
The building was constructed and used in 2003 and divided as a office and showroom for 1//11 from the total building space. Due to financial problems, Kelana Suria Sdn. Bhd stopped the rubber production and the building was sold to Wawasan Gemilang Ltd on 1st September 2010 for RM 1,250,000 of which RM 250.000 was related to the cost of land. Wawasan Gemilang Ltd’s financial year report ended 31st December every year and involved in the manufacture of medical equipment.
You are required to:
Determine the qualifying building expenditure and calculate the
industrial building allowance for each company for the relevant year of assessment up to year assessment 2010. ffice and problems, lding was sold to of which ANSWER:
KELANA SURIA SDN. BHD.
Year Ended 31 December every year
Rule of 75% RM Cost of plant 40,000 Cost of preparing site 12,500 TOTAL COST 165,000
𝟏𝟐𝟓𝟎𝟎𝟎 /𝟏𝟔𝟓𝟎𝟎× 100 % = 76% > 75% 𝟎
∴ The Cost of preparing site is more than 75%, so the cost of entitled for Industrial building.
RM Cost of land NIL Legal fee for the land acquisition NIL Legal fee (factory) 20,000 Cost of demolished a non factory building 62,000 Contraction cost 474,500 Drainage and irrigation 50,000 Labour and transportation cost 250,000 Cost of changed land status NIL Cost of plant 40,000 Cost of preparing a site to install the plant 125,000 TOTAL COST 1,021,500
Rule of 10%
Test : 1∕11 × 100 % = 9% < 10%
∴ Office and showroom is less than 10%.
So, office and showroom are entitled for Industrial Building and can claimed Industrial Building Allowance (IBA) . Therefore, the QBE is RM 1,021,500 Computation of Industrial Building Allowance
