# Stamp Duty on Share Transfers and the Form of Transfer of Securities > How stamp duty on unlisted share transfers is valued and computed, which form replaced Form 32A, and how the same transaction can trigger a separate capital gains tax return. - Category: taxation - Language: en - Status: published - Updated: 2026-07-20 - Canonical: https://negaraku.md/en/taxation/stamp-duty-share-transfer --- Two things about share transfer stamping are still wrong in most Malaysian practice notes: the form they tell you to use was abolished with the Companies Act 1965, and the duty is not charged on what the buyer actually paid. ## The form There is no Form 32A. It was prescribed under the **Companies Act 1965** and did not survive the repeal. The current instrument is the **Form of Transfer of Securities under s.105 of the Companies Act 2016**, which is the form LHDN's own guidelines name when they set out what must accompany a stamping application. Watch a related trap. The **Stamp Act 1949 has its own s.32A**, headed *obligation to execute contract note*. It has nothing to do with share transfer forms, and the coincidence of numbering has propagated a good deal of confusion. ## The rate Item 32(b) of the First Schedule charges **RM3 for every RM1,000 or fractional part of RM1,000** — **0.3%** — computed on **the price or the value of the shares on the date of transfer, whichever is the greater**. There is **no monetary cap**. The RM1,000 ceiling that circulates in secondary commentary belongs to contract notes under item 31, which concern listed securities and are a different instrument entirely. Under **item 5 of the Third Schedule**, the person liable is the **grantee or transferee** — the buyer, not the seller. ## How the shares are valued Because duty runs on the greater of price and value, a transfer at RM1 between family members does not produce RM0.003 of duty. LHDN's guideline on stamping transfers of shares in companies not listed on Bursa Malaysia, dated 6 November 2019 and effective from **1 June 2019**, sets the bases: | Company | Value for duty | | --- | --- | | Sale requiring Securities Commission approval | The price or value approved by the SC | | Loss-making company | Higher of **NTA** or **consideration** | | Profit-making company | Higher of **NTA** or **consideration** | | Newly incorporated company | **Consideration** | | Dormant company | Higher of **NTA** or **consideration** | Two older bases were **abolished** by that guideline: - **Par value**, following the Federal Court in *Pemungut Duti Setem, Pulau Pinang v. Malaysia Smelting Corporation Bhd* [2012] 5 CLJ 273, which held that par value is not the real value of a share at the date of transfer but its value when first issued. - **The price-earnings ratio**, because the ratios in the 2001 guidelines came from the Capital Issues Committee, which was replaced by the Securities Commission, and the SC prescribes no ratios. The NTA formula is: > NTA = Total Assets − Intangible Assets − Total Liabilities > NTA per share = NTA ÷ total number of shares issued The company's **audited accounts must be submitted** with the transfer form. ## A worked example, following LHDN's own A company has total assets of RM141,773,958, no intangibles and total liabilities of RM37,925,789, with 40,000,000 shares issued. 28,000,000 shares are transferred for a stated consideration of RM39,690,907. - NTA = RM141,773,958 − 0 − RM37,925,789 = **RM103,848,169** - NTA per share = RM103,848,169 ÷ 40,000,000 = **RM2.5962** - Value of shares transferred = RM2.5962 × 28,000,000 = **RM72,693,600** NTA exceeds the consideration, so duty is computed on RM72,693,600. That figure is **rounded up to the nearest RM1,000**, giving RM72,694,000, before item 32(b) is applied: **RM72,694,000 ÷ RM1,000 × RM3 = RM218,082.** Duty of RM218,082 on a deal priced at RM39.7 million — because the valuation basis, not the price, drives the charge. ## Share transfers are not in STSDS Phase 1 This is worth stating plainly because "securities" appears in the Phase 1 scope and is routinely misread. In LHDN's operational guidelines, the Phase 1 *Sekuriti* return covers assignments, transfers and novations of property **other than real property, shares and businesses**. Share transfers are listed among the instruments that continue to be **formally assessed**, alongside transfers of real property and transfers of business. Practical consequences: you still submit for assessment and wait for the notice, payment falls due **14 days** from the notice under s.40 rather than 30 days from submission, and the 2026 penalty remission programme — which applies only to self-assessed Phase 1 instruments — does **not** cover share transfers. ## Relief on intra-group transfers Where the transfer is part of a corporate reorganisation rather than a third-party sale, the duty may not be payable at all. **Sections 15 and 15A** of the Stamp Act provide relief for company reconstruction or amalgamation, and for transfers of property — including shares — **between associated companies**. Two practical points. Relief is **claimed, not automatic**: LHDN directs that applications under s.15 and s.15A be submitted to the relevant **State Director's Office**, not through the ordinary stamping channel. And the conditions are strict enough that the claim should be assessed before the transfer is executed, because the instrument still has to be stamped within 30 days whether or not the relief is ultimately granted. ## The same transaction, twice A share sale by a company triggers two entirely separate obligations that practitioners regularly collapse into one. | | Stamp duty | Capital gains tax | | --- | --- | --- | | What is taxed | The **instrument** | The **gain** | | Rate | 0.3% of price or value | 10% of the gain, or the 2% election on pre-2024 assets | | Who pays | The **transferee** | The **disposer** | | Deadline | **30 days** from execution | **60 days** from disposal, for both return and payment | | Applies to | Every transfer | Only where the disposer is a company, LLP, trust body or co-operative society | The valuation logic overlaps but is not identical. For CGT, LHDN accepts NTA as a reasonable method of establishing market value where consideration must be substituted — for instance between connected persons under s.65E(8). For stamp duty, NTA is not merely accepted but is the floor: duty is charged on the higher of NTA and consideration in every category except a newly incorporated company. So a single transfer between related companies can produce a stamp duty computation on NTA, a CGT computation on NTA, a 30-day clock and a 60-day clock — and missing either is a separate default. ## Common mistakes - **Asking for Form 32A.** Use the s.105 Form of Transfer of Securities. - **Computing duty on the consideration.** It is the greater of price and value. - **Applying par value.** Abolished as a basis in 2019. - **Assuming a RM1,000 cap.** That belongs to contract notes under item 31. - **Treating share transfers as self-assessed from 2026.** They stay on formal assessment until Phase 3. - **Filing the stamp duty and forgetting the CGT return.** Different taxpayer, different deadline, different form. - **Forgetting to round up to the nearest RM1,000** before applying the rate. ## What's next Get the target company's latest audited accounts before pricing the deal, not after — NTA sets the duty floor and can move the cost materially above what the parties agreed. Then diary both clocks separately: 30 days for the instrument and, where the seller is a company, 60 days for the capital gains tax return and payment. ## Sources - Garis Panduan Mengenai Duti Setem Ke Atas Suratcara Pindah Milik Saham Bagi Saham Syarikat Yang Tidak Tersenarai Di Bursa Malaysia Berhad — https://www.hasil.gov.my/wp-content/uploads/GP_SAHAM_2019_23062020_1.pdf (LHDN) - Guidelines on Capital Gains Tax for Unlisted Shares, LHDN.AG.600-1/7/3 — https://www.hasil.gov.my/wp-content/uploads/20250721-guidelines-on-capital-gains-tax-for-unlisted-shares.pdf (LHDN) - Section 105 — Form of Transfer of Securities — https://www.ssm.com.my/Pages/Legal_Framework/PDF%20Tab%202/section_105-_form_of_transfer_of_securities_130317.pdf (SSM) - Garis Panduan Operasi — Permohonan Penyeteman Melalui Sistem Taksir Sendiri Duti Setem — https://www.hasil.gov.my/wp-content/uploads/20251226-garis-panduan-operasi-permohonan-penyeteman-melalui-sistem-taksir-sendiri-duti-setem.pdf (LHDN) --- Source of truth: https://github.com/negaraku-md/NegaraKu.md License: CC BY-SA 4.0