Tax Exempted for Unit Trust Earning

The taxation of unit trusts is governed by Section 61 of the Income Tax Act, 1967 (“the Act”). The income of unit trusts is assessed and charged to tax separately from the income of the unitholders. The income of a unit trust may consist of dividends, interest or profit and gain from sale of investments and returns on bonds.
Gains on disposal of investments by the unit trust will not be subject to income tax. The only exception is
where the investments represent real properties or shares in real property companies and the gains on disposal of
such investments will be subject to real property gains tax (“RPGT”) at rates ranging from 5 percent to 30
percent depending on the period of ownership. Due to the Malaysian Government’s efforts to promote unit trusts, most of the income received by unit trusts will be exempt from income tax.