In terms of section 16 of the Capital Gains Tax Act [ CHAPTER 23:01], Capital Gains Tax (CGT) is deferred where any specified asset is transferred between spouses or a principal private residence is transferred to a former spouse in compliance to a court directive. The transferor and the transferee may elect that the sale price be deemed equal to the deductions allowable such that in the hands of the transferor nothing will be taxable.

What are the requirements for deferring CGT upon transfer of specified assets between spouses?

An election has to be made at the time the person making the election is submitting the CGT return for the assessment of his capital gain.

What are the conditions of deferring CGT?

The concession is limited to where:

(a) the ownership of any specified asset is transferred from a person to his or her spouse; or

(b) a person transfers the ownership of a specified asset which is his principal private residence to his former spouse in compliance with an order of a court providing for the maintenance of the former spouse or dividing, apportioning or distributing the assets of the former spouses on or after the dissolution of their marriage.

In what circumstances does the deferred CGT become due?

In the event that the specified asset is subsequently sold to another party, capital gain or assessed capital loss in the hands of the seller shall be calculated as if the asset is still owned by the first transferring spouse.


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