Further draft interpretation note on contingent liabilities
SARS has issued a further draft of the interpretation note on the transfer of contingent liabilities (such as leave pay) where a business is sold as a going concern. The revised draft incorporates a discussion regarding the transfer of contingent liabilities in the context of the group roll-over relief provisions, which generally deal with the transfer of assets only. A contingent liability may be seen to be akin to debt; however, the rollover relief provisions do allow for the transfer of contingent liabilities in certain circumstances.
Supreme Court of Appeal ruling on valuation of shares
The Supreme Court of Appeal handed down a judgment on 30 September 2015 where the valuation of shares sold was called into question. The shares had been acquired prior to the introduction of capital gains tax and the question that arose was what value would be attributed to the shares. A valuation had been performed, but the court held that the valuation did not bear scrutiny as it was fatally flawed. The taxpayer's appeal failed. From the case, it is clear that any valuation used by taxpayers in determining the value of any capital asset will not merely be accepted.
Medium Term Budget Policy
The Medium Term Budget Policy Statement will be presented to Parliament on 21 October 2015 and it will be interesting to note any proposals that will be made.