1. 0 Charitable Planning Leaving Your Legacy through Leaving Your Legacy through Chua Tia Guan Head of Tax & Financial Planning Great Vision Advisory Group Chua Tia Guan Head of Tax & Financial Planning Great Vision Advisory Group

2. All rights reserved 1 Definition of Legacy Moral values? No clear definition Reputation? Vision? Money or Wealth? Contribution to the society?

3. All rights reserved 2 Why the RICH use charitable planning as a means of leaving their Legacy? Strong sense of calling Visionary Tax benefit purposes Reputation and recognition Strong sense of calling Visionary Tax benefit purposes Reputation and recognition

4. All rights reserved 3 Why the RICH use charitable planning as a means of leaving their Legacy? Preservation of wealth - legacy for generations - children not capable - fish vs fishing net Preservation of wealth - legacy for generations - children not capable - fish vs fishing net

5. All rights reserved 4 Charitable Planning (a) : Determine your Cause (c) : Decide how much to set aside (b) : Determine who can benefit (d) : Determine the type of vehicle

6. All rights reserved 5 Generally in Malaysia, the work 'charitable' can be classified into four categories; (a) for the relief of poverty; (b) for the advancement of education; (c) for the advancement of religion; (d) for other purposes (e.g. medical, sports, cultural etc) beneficial to the community (a) : Determine your Cause

7. All rights reserved 6 is it limited by nationality? whether for specific race, colour, religion or group of people? whether the founder’s family members can benefit from the trust or foundation (b) : Determine who can benefit

8. All rights reserved 7 will it be a lump sum contribution or periodical contribution will the trust/ foundation be dependent on the founder’s contribution only or also from the general public Depends on the distribution requirement and budget (c) : Decide how much to set aside

9. All rights reserved 8 (d) : Determine the type of vehicle Types of charitable planning vehicles available:- Setting up foundation/ institution/ trust Using testamentary trust Using insurance trust Outright gift Types of charitable planning vehicles available:- Setting up foundation/ institution/ trust Using testamentary trust Using insurance trust Outright gift

10. All rights reserved 9 (d) : Determine the type of vehicle Tax Approved Organization/ Institution/ Trust Non-tax Approved Organization/ Institution/ Trust vs If using Charitable Foundation/ Institution/ Trust

11. All rights reserved 10 Benefit of Tax Approved institution/ organisation/ trust Tax deduction on cash donation paid - Individual/ corporate donors allowed deduction up to 7% of Aggregate Income Tax exemption on income (including donation) - Income fully exempted (d) : Determine the type of vehicle

12. All rights reserved 11 Tax Approved vs Non-Tax Approved Body Issues for consideration:- Approval from IRB Board of Trustee Beneficiaries Minimum fund disbursement requirement Issues for consideration:- Approval from IRB Board of Trustee Beneficiaries Minimum fund disbursement requirement

13. All rights reserved 12 Tax Approved vs Non-Tax Approved Body Issues for consideration:- Approval requirement for changes Investment Tax benefit Issues for consideration:- Approval requirement for changes Investment Tax benefit

14. All rights reserved 13 The institution or organisation may be established through the following (A) Company limited by guarantee (Companies Commission Malaysia) (B) Other organisation/ institution (Registry of Societies) (C) Trust Fund under Trustees’ Incorporation Act (PM’s department) (d) : Determine the type of vehicle

15. All rights reserved 14 A) Company limited by guarantee (Companies Commission Malaysia) Need to obtain approval from Minister of Domestic Trade and Consumer Affairs Need to prepare project paper to state the following:- i)Company’s Objective ii)Cash flow projection for first 2 years iii)Background and profile of the founder

16. All rights reserved 15 A) Company limited by guarantee (Companies Commission Malaysia) Need to prepare project paper to state the following (Cont’d):- iv)Donation commitment letter from the founder on the amount to be donated into the Company v)Background and profile of the board of directors

17. All rights reserved 16 A) Company limited by guarantee (Companies Commission Malaysia) Any amendment to M&A or appointment of new directors will need Minister’s approval

18. All rights reserved 17 B) Other organisation/ institution (Registry of Societies) Terms of the Foundation governed by the constitution & Societies Act Lengthy process to set-up Management of the society (i.e. meeting, voting, etc) need to be clearly stipulated in the Constitution

19. All rights reserved 18 C) Trust Fund under Trustees’ Incorporation Act (PM’s department) Trust Fund incorporated under Trustees (Incorporation) Act, 1952 Terms of the Trust Fund governed by the trust deed Need to apply to the PM’s department for the incorporation of the Trust Fundso

20. All rights reserved 19 C) Trust Fund under Trustees’ Incorporation Act (PM’s department) Appointment of Trustee subject to approval from the PM’s department Any subsequent changes need to apply to the PM’s department for approval

21. All rights reserved 20 Conclusion Objectives? Beneficiaries? Eligibility or criteria? Board of Director/ Board of Trustee? Funding Project paper (including projection of receipt and expenditure)

22. All rights reserved 21 Thank you www.greatvision.com.my