INCOME TAX ACT 1967 (ACT 53) PART III - ASCERTAINMENT OF CHARGEABLE INCOME Chapter 8-Special cases
Section 63. Trust annuities.
(1) This section shall apply where a person is entitled to an annuity payable under the terms of a trust (that annuity, that trust and the trust body of that trust being in this section referred to as the annuity, the trust and the trust body respectively).
(2) The amount of the annuity payable for the basis year (or for a part of the basis year) for a year of assessment shall be ascertained whenever necessary by applying subsection 19 (3) as if references therein to Chapter 4 were references to this section and references to the basis period (or to a part thereof) for a year of assessment were references to the basis year (or to a part thereof) for a year of assessment; and, where two or more amounts are payable in respect of the annuity for the basis year (or for a part of the basis year) for a year of assessment, then, in the application of this section to that annuity, and reference to an amount payable in respect of that annuity shall be construed as a reference to the aggregate of those amounts.
(3) Where the whole of the gross income off the trust body from each of its sources for the basis period for a year of assessment is derived from Malaysia or the trust body is resident for the basis year for that year of assessment-
(a) the amount payable in respect of the annuity for that basis year shall be deemed to be derived from Malaysia whether or not the trust body has any total income for that year of assessment; and
(b) in ascertaining the total income (if any) of the trust body for that year of assessment that amount shall be deducted after any deduction falling to be made under paragraph 44 (1) (a) or (b) and before any deduction falling to be made under paragraph 44 (1) (c).
(4) Where-
(a) the trust body is not resident for the basis year for a year of assessment; and
(b) either-
(i) in ascertaining the trust body's total income for that year of assessment regard is to be had only to one source, and the gross income for the basis period for that year of assessment from that source is derived partly from Malaysia and partly from outside Malaysia; or
(ii) the trust body's gross income of the basis period for that year of assessment is derived as to one of its sources wholly or partly from Malaysia and as to another of its sources wholly or partly from outside Malaysia,
subsection (5) shall apply for ascertaining the total income (if any) of the trust body for that year of assessment.
(5) Where this section applies in relation to a year of assessment, the amount payable in respect of the annuity for the basis year for that year of assessment shall be deducted after any deduction falling to be made under paragraph 44(1)(a) or (b) and before any deduction falling to be made under paragraph 44 (1)(c) and-
(a) if the whole of that amount is so deducted, that amount shall be deemed to be derived from Malaysia;
(b) if that amount exceeds what would be the total income (if any) of the trust body for that year of assessment ascertained without any deduction being made in respect of that amount, so much of that amount as equals what would be that total income as so ascertained shall be deemed to be derived from Malaysia.
(6) Where any amount is payable in respect of a joint annuity under the terms of the trust, there shall for the purposes of this section be deemed to be payable to each of the joint annuitants with respect to that amount a sum arrived at by dividing that amount by the number of joint annuitants.
(7) Where two or more annuities are payable under the terms of the trust and there is insufficient income to allow, in ascertaining the total income (if any) of the trust body of the trust, a full deduction of all amounts payable in respect of all those annuities, the Director General shall give such directions as are necessary for ascertaining how much of the amount payable in respect of each of those annuities shall be deemed to be derived from Malaysia for the purposes of paragraph 5 (b).
(8) In this section "annuity" includes any pension or other periodical payment to which paragraph 4 (e) applies.
