Renunciation Of Entitlements Under The Distribution Act 1958

Published on October 18, 2021

by Ester Ng Weng Shen (18 October 2021)

In Malaysia, if someone passes away without leaving a will, the deceased’s estate would be distributed according to the Distribution Act 1958 (“the DA1958”) instead of distribution according to the deceased’s family members’ wishes or needs.

However, it is quite common that the deceased’s family members would have their own agreed arrangement as to the distribution of the deceased’s estate where more often than not one or more beneficiaries would opt to renounce their rights or interests over some or all of the assets left behind by the deceased. A deed of family arrangement or similar document is often a mechanism used by the beneficiary(ies) to renounce their entitlements under the Distribution Act 1958.

This was what happened in the case of LEE KOY ENG V PEMUNGUT DUTI SETEM (AND ANOTHER APPEAL) [2021] 7 MLJ 481 where the High Court held that the true nature of the instruments of transfer (i.e. Form 14A) was solely to give effect to the renunciation of entitlements (under the DA 1958) to other beneficiary(ies) of a person who died intestate, and is NOT a gift of the interest. As such, the instrument of transfer should attract nominal stamp duty only.