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“Dear lawyer Yeo, I am a Singapore Permanent Resident (PR), and I would like to transfer ownership of my house in Malaysia to my father to become eligible to apply for an HDB flat in Singapore.

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After the transfer, I intend to arrange for my father to execute a will, naming me as the sole beneficiary of the property. This way, in the event of his passing, I can inherit the house as per the terms of his will.

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I have a few questions regarding the inheritance of the house through my father’s will. If I were to convert to Singapore citizenship in the future, would I still be eligible to inherit the property as outlined in the will? Additionally, if I inherit the property after my father’s passing, would I be liable for any inheritance taxes or other fees imposed by the Malaysian government?

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I would greatly appreciate your guidance on these matters. Thank you for your time, and I look forward to your advice.”

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Answer:

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1.  According to Malaysian laws, changing citizenship does not affect a person’s right to inherit property. This means that even after acquiring Singapore Permanent Resident (PR) status or becoming a Singaporean citizen, the previous citizen would still entitled to inherit any property left by his/her parents in Malaysia.

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2.     However, before the property can be inherited by the foreign beneficiary,  it is necessary to apply for a Court Order known as “Grant of Probate” from the High Court of Malaysia. The purpose of this legal process is to confirm the validity of the will. With respect to the procedure of obtaining Grant of Probate in Malaysia, we have provided explanation in our another article, which can be accessed by clicking this link.

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3.     Once the Grant of Probate has been obtained, the executor can then engage a conveyancing lawyer to prepare the transfer document for the beneficiaries. However, it should be noted that while foreign citizens have the right to inherit properties in Malaysia, according to the Malaysian National Land Code, they must obtain the consent of the state governments before inheriting the estate. The requirements to obtain “the consent” “Kebenaran” (in Malay) can vary depending on which state governments are dealing with.

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4.     Therefore, even though there is no inheritance tax in Malaysia, the executor must pay a fee (from the estate of the deceased) to the state government so to obtain “consent” before transferring the property. The estimated cost for applying consent is about a few thousand ringgits.

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5.     While the Johor State Government’s current policy makes it relatively easy to obtain consent from relevant units, usually we advise clients to add a clause in the will granting the executor the power to sell the property and distribute the proceeds to the designated beneficiary in case the state’s policies change in the future. This provides an alternative option should there be any difficulty in obtaining state consent in the future.

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6.     Therefore, after a Malaysian citizen converts his/her citizenship, and wishes to inherit property through the will of his/her parent, generally there would be three types of fees payable: (1) the legal fee for applying the Grant of Probate, (2) the application fee for obtaining state government’s consent, and (3) the registration fee (payable to the land office) for transferring the property.

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The above is the information regarding foreigners inheriting properties in Malaysia that we would want to share with you today. Should you have further inquiries for this matter, please do contact us: https://wa.link/q3kmv5

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****If you want to know about the laws and procedures of applying to reseal a foreign grant of probate, you can read our article by clicking this button.

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****If you want to know whether according to the laws of Malaysia, a debt of a deceased will pass on to his/her beneficiaries? You can read our article by clicking this button.

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You can learn other legal information from our website：https://www.yeolaw.my/

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