Call for Comment: Discussion Paper on Contingent liabilities in terms of the Income Tax Act
04 December 2013
Posted by: Author: SARS Legal and Policy
Author: SARS Legal and Policy
SARS published a Discussion Paper on Contingent Liabilities on the 4th of December 2013 which can be accessed here.
This discussion paper sets out SARS's views on the income tax implications for the seller and purchaser when the transaction is structured so that the purchase price of assets acquired as part of a going concern is settled or partly settled by the assumption of free-standing contingent liabilities.
The outcome will be the same regardless of whether the sale agreement reflects the purchase price as comprising a lump sum net amount or as an itemised list of assets less liabilities and contingent liabilities.
This discussion paper does not consider the effect, if any, of the application of the corporate rules contained in sections 41-47.
The views set out in this document are not final and once comments have been received, SARS will consider publishing Interpretation Notes on appropriate aspects of the discussion paper.
The SAIT will be making a submission to SARS. Kindly submit all comments to firstname.lastname@example.org by no later than 25 March 2014.