In the matter between The ABC Trust - appellant and the commissioner for the South African Revenue Service - respondent. Case no 11410
In the 2003 tax year, the appellant, a family trust, received a bequest by way of a testamentary disposition from the testatrix.
The respondent regarded the bequest as a discharge of a debt for no consideration, which created a capital gain in the hands of the trust.The capital gain was therefore included in the appellant's taxable income as provided for in section 26A of the Income Tax Act 58 of 1962.
Held that the Commissioner was correct in regarding the bequest as a capital gain.The court set out the relevant statutory provisions in support of its finding, and dismissed the appeal.
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