(TAX UPDATE) You Filed Your CKHT. A Year Later, HASiL Your Documents in 14 Days

(TAX UPDATE) You Filed Your CKHT. A Year Later, HASiL Your Documents in 14 Days

Introduction

A company sells a piece of land. The directors compute the gain, file the CKHT return through e-CKHT, pay what is due, and move on. As far as everyone is concerned, the matter is closed.

Then, roughly a year later, a letter arrives from HASiL. It cites Section 27 of the Real Property Gains Tax Act 1976. It asks for four documents. It gives you 14 days.

This is what an RPGT audit looks like under the new self-assessment system. If you dispose of real property through a Sdn Bhd, you want to understand it before the letter lands, not after.

What changed on 1 January 2025

For most of its life, RPGT ran on a formal assessment model. You filed your CKHT return, and HASiL raised a Notice of Assessment. The number that mattered came from them.

That changed on 1 January 2025. RPGT moved to a Self-Assessment System, introduced through the Finance Act 2024 and the accompanying enforcement legislation gazetted on 31 December 2024. Under self-assessment, the return you file is deemed to be an assessment by the Director General. HASiL no longer issues a manual Notice of Assessment for every disposal.

The responsibility shifts to you. You decide the acquisition price, the disposal price, the incidental costs, the permitted expenses, and any exemption. You file, and that filing stands as your assessment.

Self-assessment does not mean no one checks. It means the checking moves to the back end. On 1 January 2025, HASiL also published the RPGT Audit Framework, setting out how it reviews returns after they are filed.

The Section 27 letter is that framework in action.

What Section 27 actually is

Section 27 of the RPGT Act 1976 is the power to call for information. It lets HASiL require you to produce the records behind your return. It is not, by itself, an accusation. It is a request for the working papers that support the number you filed.

A typical CKHT 800A letter asks a corporate disposer for four things:

  • The audited accounts for the relevant year of assessment.

  • The tax computation for that year, being the computation prepared for the Borang C.

  • The fixed asset schedule for that year.

  • The detailed disposal account for the asset disposed of.

Each of these is requested for a reason.

Why HASiL wants these four documents

The audited accounts and the Borang C tax computation let HASiL place the disposal in the context of your wider affairs. They confirm the asset was on the books, how it was carried, and whether the disposal was reported consistently across your income tax and your RPGT filings. Inconsistency between the two is a common trigger for questions.

The fixed asset schedule traces the asset's cost base. RPGT is a tax on the gain, and the gain is disposal price minus acquisition price minus allowable costs. The schedule shows when the asset was acquired, at what cost, and what has been capitalised to it since. If you claimed enhancement costs or capital additions in your RPGT computation, this is where HASiL checks that they are real, capital in nature, and reflected in the asset itself.

The disposal account is the heart of the review. It should show the disposal consideration, the acquisition consideration, the incidental costs of acquisition and disposal such as legal fees, agent commission, and stamp duty, and the permitted expenses claimed. This is where an aggressive or careless computation shows up.

Where companies get caught

Most RPGT adjustments do not come from outright evasion. They come from ordinary record keeping that does not survive scrutiny. The recurring weak points:

Costs claimed without documents. You deducted a cost of enhancement, but you cannot produce the contractor invoices or the proof of payment. Under self-assessment, the burden of proof sits with you.

Repairs dressed up as enhancement. Only capital enhancement reflected in the asset at the point of disposal is a permitted expense. Routine repairs and maintenance are not. The line matters, and HASiL knows where to look.

Disposal price understated. Where the consideration in the sale agreement does not reflect market value, or where related party terms apply, expect questions. The Act allows HASiL to look to market value in connected party and certain other cases.

Timing and holding period. The date of disposal drives the applicable rate. A misdated agreement can push the gain into a higher band.

Exemptions claimed loosely. If you relied on an exemption or a group relief position, the file needs to support the election and the conditions, not just assert them.

What to do when the letter arrives

The 14-day clock is short, and it runs from the date of the letter, not the date you opened it. Treat it seriously from day one.

Do not send a partial bundle and hope for the best. Assemble the four documents, reconcile them to the CKHT return you actually filed, and find any gap before HASiL does. If a figure in your return cannot be supported, it is better to know now, with your adviser, than to discover it in an adjustment with penalties attached.

If you genuinely need more time, ask for it in writing before the deadline, not after. Route the response through the person who prepared the computation, so the answers match the filing.

How to be ready before the letter lands

The best RPGT audit response is the file you built at the time of disposal. When you dispose of property through a company, close the RPGT file properly on day one.

Keep the sale agreement, the valuation if any, and the completion statement together. Keep every invoice for costs you intend to claim, with proof of payment. Keep the acquisition documents, even if the purchase was years ago, because the acquisition price anchors the whole computation. Keep records for at least seven years.

Under self-assessment, your return is your assessment, and your file is your defence. Build it once, properly, and a Section 27 letter becomes a morning of retrieval rather than a scramble.

KTP's View

Self-assessment did not make RPGT lighter. It made it quieter, and then heavier at the back end. The number you file is now the number you must stand behind, and the RPGT Audit Framework gives HASiL a clear route to test it.

For SME owners, the lesson is simple. The discipline that protects you is not applied when the letter arrives. It is applied at the point of disposal, when the deal is fresh and the documents still exist. A clean disposal file is cheap to build in the moment and expensive to reconstruct a year later under a 14-day deadline.

If you have disposed of property through your company in the last two years, do not wait for the letter. Pull the file, test it against what you filed, and fix the gaps while you still can.

This article is general educational content. It is not tax advice for any specific transaction or taxpayer. For advice on your own facts, speak to a licensed tax professional.

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