Malaysia’s Inland Revenue Board has revised its capital gains tax guidelines for unlisted shares, providing new rules on nominee and beneficial ownership, broadening the scope and timing of disposals, removing redeemable preference shares from the equity category, and clarifying CGT rates and compliance requirements.
The Inland Revenue Board of Malaysia (IRBM) has updated its capital gains tax guidelines for unlisted shares on 21 September 2026, which apply to profits from the disposal of unlisted shares and certain foreign or domestic capital assets.
The updated guidelines replace the previous version dated 21 July 2025 and bring significant clarity to the taxation of unlisted shares under the Income Tax Act 1967 (ITA).
The revised guidelines introduce guidance on nominee and beneficial ownership arrangements, expand the scope of transactions treated as disposals, remove redeemable preference shares from the category of equity-type shares, and clarify the chargeable persons, disposal and acquisition dates, and methods for determining market value and consideration.
The key changes are summarised below:
Nominee and beneficial ownership arrangements
The updated guidelines establish a look-through approach for bare nominee arrangements, treating the nominee as holding only legal title on behalf of the beneficial owner. Accordingly, acquisitions and disposals by the nominee are treated as transactions of the beneficial owner, who bears the related CGT reporting and tax obligations. Transfers between a beneficial owner and nominee are expressly excluded from the definition of disposal, helping prevent double taxation.
Broadened definition of “disposal”
The updated guidelines broaden the definition of a disposal for CGT purposes to cover more than conventional sales or transfers. Disposals now include the extinguishment of shareholder rights following a company’s dissolution or winding up, as well as corporate restructuring transactions such as capital reductions, share conversions, and redemptions. Share buy-backs and transactions resulting in the cessation of ownership of a capital asset are also treated as disposals.
Expanded rules on completion dates & statutory compliance
The updated guidelines clarify that the disposal date is generally the date of the written agreement or, where no written agreement exists, the completion date. Completion occurs when ownership is transferred or ends, rights are extinguished, or full consideration is received, whichever occurs first. For transactions subject to legal or regulatory requirements, the completion date is when all prescribed requirements have been satisfied, with complex corporate transactions subject to additional Special Guidelines.
Removal of redeemable preference shares (RPS) & equity characteristics
The updated guidelines clarify the scope of CGT by specifying the characteristics of shares considered equity in nature, while removing redeemable preference shares (RPS) from this category. Under Paragraph 6.3, a security is generally regarded as equity in nature where its dividend rights are not fixed or guaranteed, the holder has a residual claim on the company’s assets after higher-priority creditors are satisfied upon liquidation, the instrument has no predetermined maturity date, and it provides voting rights to the holder.
CGT rates and compliance requirements
Capital gains tax applies to companies, LLPs, trust bodies, co-operative societies, and taxable Labuan entities. Shares acquired on or after 1 January 2024 are subject to CGT at 10% of chargeable income, while for shares acquired before that date, taxpayers may elect between 10% of chargeable income and 2% of the gross disposal price. Taxpayers must report disposals electronically through the e-CKM Form and pay the tax due within 60 days of the disposal.
