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Exemptions from Capital Gains Tax (“CGT”) and Taxes on Foreign-Sourced Income (“FSI”) for unit trusts

Announcement

3 min read     I     Date: 19 January 2024

Background

In the 2024 budget, the government announced that one of the measures to be introduced to widen Malaysia’s tax base will be to impose taxes on foreign-sourced income (“FSI”) and capital gains tax (“CGT”). While this initiative is aimed to expand the tax base, it raised legitimate concerns surrounding its implication to unit trusts, given the significant individual investor participation in this market. 


Key Announcement

The government has acknowledged these concerns and announced its decision to exempt unit trusts from CGT and taxes on FSI. This exemption will be effective from:

  • 1 January 2024 - 31 December 2026, for FSI.
  • 1 January 2024 - 31 December 2028, for CGT.


This decision ensures that:

  • Individuals investing in unit trusts continue to benefit fully from their investments.
  • Unit trusts will remain as an attractive and accessible investment option for the rakyat.

We are confident that this positive development will benefit all stakeholders in the Malaysian capital market.