UOA Unit Wins Leave to Challenge RM165.7 Million Tax Assessment Over REIT Asset Disposal

KUALA LUMPUR (May 25): The High Court has allowed Distinctive Acres Sdn Bhd, an investment unit of property developer UOA Development Bhd (KL:UOADEV), to challenge a RM165.66 million tax bill and penalty linked to the sale of an asset to a REIT in 2020. Judge Alice Loke Yee Ching also granted a temporary stay for Distinctive Acres until June 16. Both the company and the Inland Revenue Board (IRB) must appear in court on that date. ADVERTISEMENT Earlier, Loke dismissed an objection raised by the IRB’s senior federal counsel, Nur Irmawatie Daud. The company was represented by Datuk S Saravana Kumar and Tan Jia Hua of Messrs Rosli Dahlan Saravana Partnership. Saravana confirmed Monday’s outcome when contacted by The Edge. Last October, it was reported that Distinctive Acres was issued a notice of additional assessment by the IRB over the disposal of UOA Corporate Tower in Bangsar South to UOA Real Estate Investment Trust (KL:UOAREIT) in 2020. ADVERTISEMENT IRB decided that the gain was subject to corporate income tax rather than real property gains tax, the company said. “Based on advice from our tax consultant, the company has a strong basis to challenge the treatment and validity of the additional assessment,” UOA Development said in its filing with the bourse then. Challenge filed last October Following that, UOA Development, through Distinctive Acres, filed a judicial review application on Oct 22 last year to seek permission from the court to quash the IRB’s decision to issue the notice of additional assessment dated Oct 10, 2025. In judicial review proceedings, leave (permission) had to be gained for the merits of the challenge to be heard. The additional assessment arose from the disposal of UOA Corporate Tower A, which the company claims was illegal, void, unlawful and/or in excess of authority, irrational and/or unreasonable, and resulted in a denial of the company’s legitimate expectations. Besides this, the company is seeking a declaration that the gains arising from the disposal of Tower A should not be subjected to double taxation and should only fall within the scope of the Real Property Gains Tax Act 1976 (RPGTA). Distinctive Acres is also seeking a declaration that the gains arising from the disposal of Tower A are exempted from the RPGTA by virtue of the Real Property Gains Tax (Exemption) (No 4) Order 2003. It is also seeking a stay of enforcement and effect of the IRB decision until the full and final determination of the application to quash the decision. Pls redo similar, write what I learn including title in article format

UOA Unit Wins Leave to Challenge RM165.7 Million Tax Assessment Over REIT Asset Disposal

KUALA LUMPUR (May 25): Distinctive Acres Sdn Bhd, an investment subsidiary of UOA Development Bhd, has secured permission from the High Court to proceed with its legal challenge against a RM165.66 million tax assessment and penalty imposed by Malaysia’s Inland Revenue Board (IRB) following the disposal of an office tower to a REIT in 2020.

High Court judge Alice Loke Yee Ching also granted an interim stay of enforcement until June 16, with both parties required to return to court on that date for further proceedings.

The decision came after the court dismissed a preliminary objection raised by the IRB. Distinctive Acres was represented by Datuk S Saravana Kumar and Tan Jia Hua of Messrs Rosli Dahlan Saravana Partnership.

What Happened?

The dispute stems from the sale of UOA Corporate Tower A in Bangsar South to UOA Real Estate Investment Trust in 2020.

In October 2025, Distinctive Acres received a Notice of Additional Assessment from the IRB, which determined that the gain from the disposal should be taxed under corporate income tax rules rather than under the Real Property Gains Tax (RPGT) regime.

The reassessment resulted in a tax bill and penalty amounting to RM165.66 million.

Legal Challenge Filed

On Oct 22, 2025, Distinctive Acres filed a judicial review application seeking leave from the High Court to challenge and quash the IRB’s decision.

The company argues that the additional assessment was:

Illegal and void;

Unlawful and beyond the authority of the IRB;

Irrational and unreasonable; and

Contrary to the company's legitimate expectations regarding the tax treatment of the transaction.

With leave now granted, the case can proceed to a full hearing on its merits.

Key Arguments Raised by Distinctive Acres

The company is seeking declarations from the court that:

The gains from the disposal of UOA Corporate Tower A should not be subjected to double taxation.

The transaction should fall solely within the scope of the Real Property Gains Tax Act 1976 (RPGTA).

The disposal qualifies for exemption under the Real Property Gains Tax (Exemption) (No. 4) Order 2003.

The IRB's additional assessment should be set aside.

The company is also seeking a continued stay of enforcement pending the final determination of the judicial review proceedings.