Dissertations / Theses on the topic 'Inheritance and transfer tax – Maine'

Diploma thesis is focused on the comparison of the tax burden on residential property owner in the Czech Republic and in selected European countries. The content of this thesis is a comprehensive review of taxes relating to real estate in our country, their detailed analysis and subsequent comparison with the situation of selected countries. The possible future development of property taxation in the Czech Republic is predicted in conclusion.

This diploma thesis focuses on the analysis of the effectiveness of transfer taxes in the period 2006 to 2010 in the Czech Republic. The first part of this thesis describes the historical development and the basic characteristics of transfer taxes in the Czech Republic and analyzes in details the current legislation. The second part deals with the analysis of the effectiveness of transfer taxes, i.e. measurement of the administrative costs of taxation and their subsequent comparison with revenues. The measurement of the administrative costs is used by the method called WTE staff. On the base of the measurement is done the conclusion about the administrative costs of taxation and about efficiency of transfer taxes in the tax system of the Czech Republic. The third part discusses on plans for future development in this area of transfer taxes in the Czech Republic.

This diploma thesis is focused on a critical comparison of the tax burden on real estate in the Czech Republic and in selected countries of the European Union. At first, comparison will be implemented on the general level, after that a practical calculation for the most popular type of housing will be realized. This thesis provides a comprehensive view of the tax on real estate and business transfer. A comparison of taxes related with real estate in the countries of the European Union will be used for a prediction of the tax burden on real estate in the Czech Republic for the following years.

This thesis examines the case for a wealth transfer tax in Thailand, against the background, inter alia, of the failure of Thailand’s defunct tax law on estate and inheritance (the Estate and Inheritance Tax Act, 1933). Thailand has a significant problem with income and wealth distribution, with an increasing gulf between the rich and the poor—a root cause of the nation’s ongoing political conflicts. Such substantial economic inequality is partly caused by imbalances and inequalities in the Thai taxation system, and it will be argued that the tax system requires restructuring through the introduction of the wealth transfer tax. This would be a significant tax policy initiative that may assist in tackling a root cause of Thailand’s political and economic crises. In addressing the above issues, this thesis examines aspects of the US federal estate and gift taxes and the UK inheritance tax systems. Comparisons between the criteria, rules and concepts in the US and UK systems reveal that Thailand should not simply import wholesale the approach of either country. Both systems have commendable features that may, when combined, help address the causes of the failure of the Thai Estate and Inheritance Tax Act of 1933. It will be argued that a wealth transfer tax should be introduced in Thailand, in the form of a transferor-based system, which incorporates selected criteria, rules, and concepts arising from both the US and UK jurisdictions. In adopting the proposed reform, it is essential to consider Thailand’s political, economic, social and legal contexts, including Thailand’s current legislation relating to wealth transfers, as such laws will inform and partly shape the drafting of a prospective wealth transfer tax in Thailand.

Thesis (MAcc)--University of Stellenbosch, 2009.
AFRIKAANSE OPSOMMING: Met die bekendstelling van kapitaalwinsbelasting in 2000 was belastingpligtiges en belastingadviseurs bekommerd oor die invloed daarvan op belasting- en boedelbeplanning. Om die volle impak daarvan te verstaan moet die werking van kapitaalwinsbelasting ondersoek word. Paragraaf 10 van die Agste Bylae definieer die belasbare kapitaalwinste vir die jaar van aanslag. Hiervolgens word kapitale winste in die hande van verskillende belastingpligtiges teen verskillende “koerse” belas. In die algemeen word daar na Paragraaf 10 verwys as die insluitingsartikel wat op kapitaalwinste van toepassing is. Aangesien slegs ‘n “gedeelte” van kapitaalwinste onderhewig is aan normale belasting is een van die grootste faktore in die huidige belastingomgewing steeds om te onderskei tussen inkomste van ‘n kapitale of nie-kapitale aard. Deur die toepassing van Paragraaf 10 word kapitaalwinste gerealiseer deur Trusts en Maatskappye teen hoër koerse belas, as in die geval van individue. Dit het tot gevolg dat belastingpligtiges en belastingadviseurs die gebruik van trusts as ‘n effektiewe hulpmiddel vir boedelbeplanning begin bevraagteken het. Die effektiewe belastingkoers van toepassing op kapitaalwinste gerealiseer deur individue is egter die laagste van al die verskillende belastingpligtiges. Wanneer ‘n individue te sterwe kom is sy boedel onderhewig aan boedelbelasting, wat ‘n verdere belasting las tot gevolg het. Indien ‘n trust effektief toegepas word tydens die opstel van ‘n boedelplan vir ‘n individu sal die bates van die trust nie onderhewig wees aan boedelbelasting nie. Deur die verskeie opsies wat beskikbaar is vir ‘n belastingpligtige, wanneer hy ‘n besluit moet neem watter beleggingsvoertuig hy moet gebruik vir die belegging, kan die effektiewe belastingkoerse vergelyk word. Deur die uitkomste van die verskeie opsies teenoor mekaar te vergelyk bewys dit dat indien ‘n trust korrek aangewend word, dit steeds as ‘n effektiewe hulpmiddel in ‘n boedelplan kan aangewend word. Tydens die uitvoer van die vergelyking van die verskillende opsies wat vir die belastingpligtige beskikbaar is, is die tydwaarde van geld buite rekening gelaat. Indien die lewensverwagting van ‘n individu in berekening gebring word kan die uitkoms van die vergelyking moontlik anders wees. Deur dit alles in ag te neem bevestig dit weereens dat elke individue se boedelplan uniek sal wees indien sy persoonlike finansiële omstandighede in ag geneem word.
ENGLISH ABSTRACT: With the introduction of capital gains taxation in 2000, taxpayers and their advisors feared the impact thereof on tax planning and estate planning. To determine the impact thereof the taxation of capital gains must be understood. Paragraph 10 of the Eight Schedule define the taxable portion of capital gains for the year of assesment. Paragraph 10 is also commonly known as the inclusion clause applicaple on capital gains. This application of paragraph 10 has the effect that capital gains realised by different types of taxpayers are taxed at different rates. Due to the application of paragraph 10 only a portion of the capital gain realised by the taxpayer is subject to normal taxation. Therefor one of the biggest concerns for taxpayers still is to determine if income are of a capital nature or not. The inclusion rate, according to paragraph 10, applicable on capital gains realised by trusts and companies is higher than that of a individual and gives rise to a bigger tax burden relating to capital profits for trusts and companies. Therefor taxpayers and their advisors doubt wether a trust could still be used as an effective tool for estate planning. The effective tax rate on caiptal gains for individuals is the lowest for all types of taxpayers. But when an individual dies his estate is subject to estate duty, which leaves an additional burden for an individual to take into account. When a trust is effectively utilised in preparing an estate plan for an individual, the assets of the trust should not be subject to estate duty. By evaluating the effective tax rates applicable to the different options available to a taxpayer when he needs to determine which investment vehicle to use when making an investment, a comparision can be made. By comparing the effective tax rates a conclusion can be drawn that a trust can still be used as an effective tool for estate planning when utilised properly. When the comparison was made the time value of money was ignored. If the life expectancy of a individual are taken into account the outcome could be different. When everything is taken into consideration the conclusion is that the estate plan for every individual is unique and determined by his or her personal financial circumstances.

Death and taxes are unavoidable. In terms of the current legislation both estate duty and capital gains tax (hereinafter referred to as 'CGT') are levied upon death. The South African National Treasury is reconsidering taxes on death as estate duty contributes minuscule revenue, and its administration is cumbersome. Worldwide taxation is based on either source or residence. Because of the R3 500 000 exemption from estate duty, only wealthy individuals are generally subject to estate duty. Wealthy individuals make use of the annual R4 000 000 foreign investment capital allowance by owning offshore property. The aim of this study is to document how death taxes are currently levied on an estate which holds offshore property, given the perception that foreign property is exempt from death duties, and also to consider the impact on taxes payable on offshore property at death if estate duty were to be abolished. These objectives cannot be achieved without a thorough understanding of the development and future of estate duty, the impact of CGT on death, how selected foreign countries levy taxes upon death, and how residents of South Africa are taxed on property situated within foreign countries. When CGT was introduced in 2001 the estate duty rate was reduced and it is likely that, if estate duty is repealed, the rate of CGT will be increased. In South Africa, residents are taxed on worldwide income and capital gains. The international perspective is that the foreign country has the sovereignty to levy taxes on a person who owns property situated within its boundaries. An estate which holds offshore property may also be subject to estate duty in terms of the tax law of that country which results in double taxation in the hands of the deceased estate. South Africa has concluded international agreements with a number of foreign countries through double tax agreements and estate tax treaties to prevent double taxation. In terms of the Estate Duty Act, and in some of the treaties, a rebate is allowed in respect of foreign estate taxes paid. However, if estate duty is abolished, the deceased estate may be liable for estate tax in the foreign country where the assets are situated and the deceased estate may not qualify for any rebate in South Africa in respect of foreign taxes paid. Hence, the abolition may have detrimental consequences on the liquidity requirements, and on the heirs, in cases where offshore property is involved. It is vital that proper estate and tax planning advice is given before a resident acquires offshore property as the tax implications may be enormous. The current impact of estate duty and CGT on a resident who owns offshore assets is that the said taxes will be levied either here in South Africa or in the foreign country. The effect of capital transfer tax on a resident with an offshore asset can never be underestimated.
Thesis (M.Com. (Tax))--North-West University, Potchefstroom Campus, 2011.

The thesis deals with tax liabilities of an owner of real estate. The theoretical part describes tax acts in 2010 which are used in the thesis. I focused on selection of the parts of the acts which refer to real estate so that the public can easily understand and use them. The practical part includes taxation of specific cases with commentary and reasoning of individual steps arising during purchase, usage and transfer of real estate. The specific cases are modelled for a natural person taxpayer not being an entrepreneur and a natural person taxpayer being an entrepreneur.

Thesis (LLM)--University of Stellenbosch, 2004.
ENGLISH ABSTRACT: This study deals with a theoretical and practical investigation of the subject discipline of estate planning in order to identify a reliable and appropriate estate planning model. For purposes of this study, the investigation is restricted to the development of such a model in respect of a person within the niche of an average salary earner with the focus on an appropriate financial planning in respect of his death. An investigation is conducted into the basis from which the subject emerged and developed. It is determined that this basis is the method of successionand that it also forms an integral part of any proposed estate planning. Relevant principles and the methods of succession which were in force in the Roman, Roman-Dutch and English law of succession are analysed. Through the historic development, against the background of these systems, a link is made to the South African law of successionand the position in terms of the South African law is determined. The theoretical basis of the subject discipline is also laid down. The different role players involved are identified in the process and the proposed estate planning process is identified and described. The administration of estates process within the context of the English law is compared with the same process in the context of the South African law through a comparative study. This investigation is limited to those aspects of the administration of estates process important for purposes of estate planning, especially in view of the influence that the rules of the Englishlaw had on the South African law in respect of this process. Practical problems currently experienced by trust companies in respect of the administration of estates are also identified and analysed. These problems also indicate the need for the identification of a reliable and appropriate estate planning model. The identification of an appropriate estate analysis model is identified as an essential control mechanism for the proposed estate planning model. This model is furthermore expanded in order to point out the problem areas in respect of different scenarios with a determined conventional family construction as the basis for the analysis. Available estate planning instruments and techniques are identified as aids in order to facilitate the testator's estate plan by virtue of the proposed estate planning model. Testamentary mechanisms are distinguished from inter vivos mechanisms and applicable legislation is discussed. A reliable and appropriate estate planning model is identified, bearing in mind the results of the researchconducted. This study is concluded with an adjudication and consolidation of the results of the research with a special reference to the implementation phase of an estate plan and the frequent revision thereof.
AFRIKAANSE OPSOMMING: Hierdie studie handeloor 'n teoretiese en praktiese ondersoek van die vakdissipline boedelbeplanning met die oog daarop om 'n betroubare en toepaslike boedelbeplanningsmodel te identifiseer. Die ondersoek word vir doeleindes van hierdie studie beperk en afgebaken tot die ontwikkeling van so 'n model vir 'n persoon wat homself in die nis van die gemiddelde salaristrekker bevind met die fokus op 'n toepaslike finansiële beplanning vir die intrede van dié se dood. Daar word ondersoek ingestel na die basis waaruit dié vakdissipline ontstaan en ontwikkel het. Daar is gevind dat die metode van erfopvolging daardie basis uitmaak en ook 'n integrale deel vorm van enige boedelbeplanningwat onderneem word. Relevante beginsels en die metodes van erfopvolging soos dit in die Romeinse, Romeins- Hollandse en Engelse erfreg gegeld het, word ontleed. Met die historiese ontwikkeling in hierdie stelsels as agtergrond, word daar by die Suid-Afrikaanse erfreg aangesluit en die posisie volgens die Suid- Afrikaanse reg bepaal. Die teoretiese grondslag van die vakdissipline word ook vasgelê. Die verskillende rolspelers betrokke by die voorgestelde boedelbeplanningsproses word geïdentifiseer en die voorgestelde boedelbeplanningsprosesword beskryf. Die boedelberedderingsprosesword ook binne die konteks van die Engelse reg met dié proses binne die konteks van die Suid- Afrikaanse reg deur 'n regsvergelykende studie vergelyk. Hierdie ondersoek word ook beperk tot daardie aspekte van die beredderingsproses wat vir doeleindes van boedelbeplanning van belang is, juis in die lig van die invloed van die Engelsregtelike reëls op die Suid-Afrikaanse reg ten aansien van gemelde proses. Praktiese probleme wat tans tydens die beredderingsproses van bestorwe boedels deur trustmaatskappye ervaar word, word ook geïdentifiseer en ontleed. Hierdie probleme ondersteun ook die behoefte aan die identifisering van 'n betroubare en toepaslike boedelbeplanningsmodel. Die identifisering van 'n toepaslike boedelontledingsmodel word aangetoon as 'n onontbeerlike kontrolemeganisme van die voorgestelde boedelbeplanningsmodel. Hierdie ontledingsmodel word ook uitgebrei om probleemareas ten aansien van verskillende scenario's uit te wys met 'n bepaalde konvensionele gesinskonstruksie as die basis vir die ontledingsmodel. Beskikbare boedelbeplanningsinstrumente en -tegnieke word geïdentifiseer as hulpmiddels om die erflater se toepaslike boedelplan ingevolge die struktuur van die voorgestelde boedelbeplanningsmodel te fasiliteer. Testamentêre meganismes word van inter vivos meganismes onderskei en toepaslike wetgewing word ook bespreek. Na aanleiding van die resultate van hierdie navorsing word 'n betroubare en toepaslike boedelbeplanningsmodel geïdentifiseer. Die studie word afgesluit met 'n beoordeling en samevatting van die resultate van die navorsing met 'n spesifieke verwysing na die implementeringsfase van 'n boedelplan en die gereelde hersiening daarvan.

The thesis examined the current system of the taxation of wealth in South Africa with an emphasis on the taxes that apply upon the death of the taxpayer. The focus of the research was on the problems associated with estate duty, namely the issue of double taxation; the alleged cumbersome administration of the tax and the limited revenue that it brings in; it’s questionable efficacy due to extensive estate planning on the part of taxpayers while they are still alive and its lack of uniformity with other wealth taxes. An interpretative research approach was followed which involved analysing documentary data. The conclusions that were reached were that estate duty as a wealth tax in South Africa has been rendered ineffective due to the inherent problems associated with its application, namely the fact that double taxation exists, not only in the context of capital gains tax, but also in that taxpayers resent being taxed upon death after having paid income tax during their lives. The perceived unfairness that is associated with estate duty has caused the creation of a secondary industry of estate planning, with the aim of minimising estate duty, which industry has resulted in the ineffectiveness of estate duty and its limited revenue. No evidence could be found regarding the Treasury’s assertion that estate duty is a cumbersome tax to administer. The final conclusion reached was that the current estate duty regime needs to be overhauled preferably by extending the current system of capital gains tax and abolishing estate duty, with due consideration being given to the consequences associated therewith.

Thesis (MComm) Stellenbosch University, 2005.
AFRIKAANSE OPSOMMING: Wanneer 'n natuurlike persoon (die vereffenaar) besluit om sy of haar groeibates (byvoorbeeld, vaste eiendom of aandele) aan sy of haar familietrust oor te dra, word sodanige bate-oordrag se markwaarde gewoonlik (volgens die mening van die belastingskrywers, Keith Huxham en Phillip Haupt) deur die toestaan van 'n rentevrye leningsrekening aan die trust gefinansier. Die vermindering van die bedoelde uitstaande skuld by wyse van skenkings van die vereffenaar, het met die verordening van belasting op kapitaalwins (BKW) op 1 Oktober 2001 'n BKW-dilemma vir sodanige trust geskep. 'n BKW-aanspreeklikheid ingevolge paragraaf 12(5) van die Agtste Bylae tot die Inkomstebelastingwet, NO.58 van 1962, soos gewysig, (hierna as "die Wet" verwys) sal in hierdie omstandighede vir die trust ontstaan, omrede die toepaslike vermindering as 'n vermindering van 'n debiteur (die familietrust) se skuld (die uitstaande leningsverpligting) deur 'n krediteur (die vereffenaar) teen geen vergoeding beskou mag word. Belastingraadgewers in die algemeen adviseer gevolglik (volgens onder meer die siening van 'n regskonsultant van San lam Trust, Elmarene Erasmus) hulle kliente dat 'n trust benut moet word op 'n wyse wat verseker dat die vereffenaar nie die trust se tersaaklike uitstaande leningsrekening vir geen werklike betaling verminder nie. 'n Werklike betaling van die skenking word derhalwe voorgestel. Sodanige werklike betaling word bewerkstellig deurdat die vereffenaar 'n bedrag geld ten bedrae van R30 000 (die skenkingsbelasting-vrystellingsperk ingevolge artikel 56(2)(b) van die Wet) direk aan die trust betaal of andersins 'n tjek vir die betrokke bedrag aan die trust uitreik. Teen die einde van die belastingjaar, dit wil se nadat die toepaslike skenking ontvang is, besluit die trustees van die trust meestal om die kontant, wat per die trust se rekeningkundige rekords op hande is, aan te wend ter aflossing van 'n gedeelte van die uitstaande leningsverpligting aan die vereffenaar verskuldig. Daar word deurgaans veronderstel dat die toepaslike trust in hierdie omstandighede oor geen verdere uitstaande skuld, rentedraend al dan nie, beskik nie. Deur te aanvaar dat die vereffenaar nie.regstreeks afstand doen van 'n gedeelte van die uitstaande lening vir geen betaling nie, is die waarskynlikheid dat 'n BKWaanspreeklikheid vir die trust (vanwee enige leningsvermindering) sal ontstaan deur middel van die studie bepaal. Die betekenis van die frase "verminder of afgelos" ("reduced or discharged" per die Engelse teks van die Wet) ingevolge paragraaf 12(5) van die Agtste Bylae tot die Wet is onder meer verklaar aan die hand van die woordeboekbetekenis van die woorde "reduced" en "discharged" en die strekking van "kwytskelding" en "voldoening" as relevante vorme van tenietgaan van 'n verbintenis (byvoorbeeld, 'n uitstaande leningsverpligting) kragtens die Suid-Afrikaanse kontrakte- en handelsreg. Die skrywer het die gevolgtrekking gemaak dat die betrokke frase dui op die gedeeltelike of algehele kwytskelding deur 'n krediteur van 'n skuld (soos byvoorbeeld, 'n uitstaande leningsverpligting) wat deur 'n debiteur aan die bedoelde krediteur verskuldig is. Voldoening (as 'n verskyningsvorm van die tenietgaan van 'n verbintenis) aan 'n skuld op 'n gedeeltelike of volledige basis deur middel van die betaling van 'n bedrag geld of 'n tjekbetaling kan egter volgens hierdie gevolgtrekking nie as 'n vermindering of aflossing van 'n skuld teen geen vergoeding ingevolge paragraaf 12(5) van die Agtste Bylae tot die Wet gesien word nie. Die sogenaamde "verwisseling van tjeks" - prosedure ter ondersteuning van die tersaaklike skenking- en leningvermindering-betalings is vir studiedoeleindes as 'n ekwivalent vir 'n verwisseling van 'n bedrag geld geag. 'n Ondersoek na die relevante howe se benaderings in Suid-Afrikaanse belastingsake [naamlik, ITC 1583 (1993) 57 SATC 58, ITC 1603 (1995) 58 SATC 212 en ITC 1690 (1999) 62 SATC 497] asook buitelandse sake [naamlik, Richard Walter (Pty) Limited v Commissioner of Taxation (1996) 67 FCR 243; 33 ATR 97 en MacNiven (Her Majesty's Inspector of Taxes) v Westmoreland Investments Limited (2001) UKHL 6; (2001) 1 ALL ER 865] ten aansien van sodanige prosedure, het aangetoon dat dit benut kan word as 'n grondslag vir die geldige nakoming van, oftewel voldoening aan 'n verbonde party se uitstaande skuld ingevolge 'n tersaaklike transaksie of reeling. Die onderliggende transaksie of reeling moet egter oor 'n regsgeldige uitwerking beskik, ooreenstemmend met die toepaslike regsgeldige bedoeling van die betrokke partye. Analisering van die vermindering van 'n trust se uitstaande leningsverpligting in samehang met die voorafgaande ontvangs van skenkingbetalings, het ook met verwysing na die gemeenregtelike wese bo vorm - leerstuk geskied. Hierdie ontleding het onder andere benadruk dat die belastingdoeltreffende werking (veraI in 'n BKW-konteks) van die bestudeerde reeling die aanwesigheid van egte ("genuine") en ongesimuleerde skenkingen leningvermindering-betalings, ooreenkomstig die regsgeldige bedoeling van die vereffenaar en trustees van die familietrust, om onderskeidelik skenkings en leningverminderings teweeg te bring, vereis. Die moontlike toepassing en effek van artikel 103(1) van die Wet (die Suid-Afrikaanse algemene teenvermydingsbepaling) op die bestudeerde reeling, is oorweeg deur onder meer ag te slaan op die siening van belastingskrywers (soos byvoorbeeld, D. Clegg, M.A. Kolitz en K. van der Linde) aangaande die uitwerking van hierdie bepaling op transaksies en reelings in die algemeen. Die skrywer het tot die gevolgtrekking gekom dat die toepaslike skenking- en leningvermindering-betalings onderskeidelik op 'n afsonderlike basis oor bona fide besigheidsdoelwitte moet beskik. Die besigheidsdoelwit van die skenkingbetalings mag byvoorbeeld verband hou met die vereffenaar se oogmerk om sy of haar persoonlike bates buite die bereik van sy of haar ondernemingskrediteure te plaas, gegewe die aanname dat die vereffenaar 'n sake-ondernemimg bedryf. Die leningvermindering-betalings se gepaardgaande besigheidsdoelwit mag weer betrekking he op die verbetering van die familietrust se balansstaatposisie soos weerspieel deur finansiele verhoudingsgetalle met betrekking tot onder andere Iikwiditeit en solvabiliteit. Verder is dit in hierdie verband van essensiele belang dat daar geen skakel of verbintenis tussen die onderliggende betalings moet bestaan nie. Die belastingskrywer, M.L. Stein se mening bied steun vir die belang van die afwesigheid van die bedoelde interafhanklikheid. Die teenwoordigheid van die betrokke besigheidsdoelwitte tesame met die ontbreking van enige interafhanklikheid tussen die relevante betalings, behoort dus (volgens die skrywer se beskouing) te verhoed dat die belastingeffektiewe werking (veral in 'n BKW-verband) van die reeling onder oorweging deur artikeI103(1) van die Wet se toepassing en effek ter syde gestel word. Die skrywer het tot die slotsom gekom dat egte, onvoorwaardelike (jaarlikse) skenkingbetalings deur die vereffenaar aan sy of haar familietrust wat aan die einde van die belastingjaar opgevolg word deur ongesimuleerde leningvermindering-betalings, geInisieer deur die trust se trustees sonder enige inmenging of invloed van die vereffenaar, na aile waarskynJikheid'n BKW-dilemma vir die familietrust (in die vorm van 'n BKW-aanspreeklikheid per paragraaf 12(5) van die Agtste Bylae tot die Wet ten aansien van enige leningsvermindering) sal uitskakel.
ENGLISH ABSTRACT: When a natural person (the settlor) decides to transfer his or her growth assets (for example, fixed property or shares) to his or her family trust, the market value of such a asset transfer is usually financed (according to the opinion of certain tax authors, for instance, Keith Huxham and Phillip Haupt) through the grant of a interest free loan account to the appropriate trust. The reduction of the proper indebtedness by way of donations from the settlor, created a capital gains tax (CGT) dilemma for the trust concerned since the commencement of CGT on 1 October 2001. A liability for CGT in terms of paragraph 12(5) of the Eighth Schedule to the Income Tax Act 58 of 1962, as amended, (hereinafter referred to as ''the Act'1 will arise in these circumstances in respect of the trust, because the applicable reduction may be seen as a reduction of the debt (the outstanding loan account) of a debtor (the family trust) by a creditor (the settlor) for no consideration. In general, tax consultants consequently advise their clients (in accordance with, among others, the view of Elmar{me Erasmus, a legal advisor of Sanlam Trust) that a trust should be utilise in a manner which would ensure that the settlor does not reduce the outstanding loan account of the relevant trust for no actual payment. Hence an actual payment of the donation is proposed. The real payment as such is accomplish through the direct payment of R30 000 (the exemption amount for donation tax purposes in terms of section 56(2)(b) of the Act) by the settlor to the trust or otherwise through the issue of a cheque in the amount of R30 000 by him or her. At the end of the tax year, that is after the receipt of the relevant donation, the trustees of the trust will in most of the time decide to appropriate the cash on hand (as per the accounting records of the trust) in order to redeem a portion of the outstanding loan liability due to the settlor. The assumption that the apposite trust in these circumstances has no additional outstanding debt (interest free or not) is maintained on a continuous basis. By the acceptance of the fact that the settlor does not directly relinquish a portion of the outstanding loan for no payment, the probability that a CGT liability would arise in respect of the trust (on account of any loan reduction) is determined by means of the study concerned. The meaning of the phrase "reduced or discharged" in terms of paragraph 12(5) of the Eighth Schedule to the Act is inter alia explained according to the dictionary construction of the words "reduced" and "discharged" and the effect of "remission" and "settlement" as relevant forms of dissolution of an agreement in pursuance of the contract - and mercantile law of South Africa. The author concluded that the appropriate phrase is indicative of the partial or complete remission of an indebtedness (for example, an outstanding loan liability) by a creditor owed by a debtor to the creditor involved. Settlement (as a form of dissolution of an agreement) of an indebtedness on a partial or complete basis by means of the payment of an amount of money or payment by cheque may however in accordance with this inference not be perceived as a reduction or dischargement of a debt for no consideration in terms of paragraph 12(5) of the Eighth Schedule to the Act. The so - called "exchange of cheques" procedure in support of the relevant donation - and loan reduction payments is deemed for study purposes to be the equivalent of an exchange of an amount of money. An examination of the approaches by the proper courts in South African tax cases [to wit, ITC 1583 (1993) 57 SATC 58, ITC 1603 (1995) 58 SATC 212 and ITC 1690 (1999) 62 SATC 497] as well as foreign cases [to wit, Richard Walter (Pty) Limited v Commissioner of Taxation (1996) 67 FCR 243; 33 ATR 97 and MacNiven (Her Majesty's Inspector of Taxes) v Westmoreland Investments Limited (2001) UKHL 6; (2001) 1 ALL ER 865] with regard to the procedure in question has demonstrated that it could be turn to account as a basis for the valid fulfilment of, that is to say the settlement of the outstanding indebtedness of a connected person in respect of the relevant transaction or arrangement. The underlying transaction or arrangement should however have a result sufficient in law, in correspondence with the apposite legal intention of the parties involved. Analysis of the reduction of the outstanding loan liability in relation to a trust in conjunction with the foregoing receipt of donation payments also occurred with reference to the common - law substance over form doctrine. The analysis in question inter alia emphasises that the tax efficient operation (especially in a CGT context) of the scrutinised arrangement necessitates the existence of genuine, unsimulated donation - and loan reduction payments according to the legal intentions of the settlor and trustees of the family trust to respectively give occasion to donations and loan reductions. The conceivable application and effect of section 103(1) of the Act (the general anti _ avoidance provision in South Africa) in respect of the scrutinised arrangement is considered inter alia on account of the views of certain tax authors (for instance, D. Clegg, M.A. Kolitz and K. van der Linde) with reference to the application and effect of this provision on transactions and arrangements in general. The author deduced that the relevant donation - and loan reduction payments each ought to possess a bona fide business purpose on a separate basis. The business purpose in connection with the donation payments may for instance have relevance to the intention of the settlor to locate his or her personal assets outside the range of his or her business creditors, in light of the supposition that the settlor is carrying on a business venture. The business purpose that may be coupled with the loan reduction payments could refer to the enhancement of the balance sheet position of the family trust as reflected by financial ratios in respect of, among other things, liquidity and solvability. Moreover it is essential in this context that no link or connection exists between the underlying payments. The opinion of the tax author, M.L. Stein renders support for the significance of the absence in relation to the correlation concerned. The presence of the appropriate business purposes along with the absence of any interdependance between the relevant payments should consequently (according to the view of the author) avert that the application and effect of section 103(1) of the Act would disregard the tax efficient operation (particularly in a CGT context) of the arrangement considered. The author arrived at a conclusion that genuine, unconditional (annual) donation payments by the settlor to his or her family trust which are succeeded by unsimulated loan reduction payments at the end of the tax year, initiated by the trustees of the trust without any interference from or influence of the settlor, would in all probability preclude a CGT dilemma (in the form of a CGT liability in terms of paragraph 12(5) of the Eighth Schedule to the Act in relation to any loan reduction) for the family trust.

M.Comm.
The first objective of this dissertation is to establish whether wealth or capital taxes are relevant to South Africa. If the answer is yes, the further objective is to identify the various forms of capital and wealth taxes in order to determine which form of wealth or capital tax would be suitable in South Africa in the future (refer chapter 2). The second objective, once the form of capital tax for a future South Africa is identified, is to determine which assets or, in other words, which property will be subjected to such a tax (chapters 3-5). The third objective is to analyse the recommendations contained in the fourth interim report of the Katz Commission of Inquiry into certain 3 aspects of the tax structure of South Africa (hereafter, referred to as the Katz Commission) and to examine the effect of these recommendations on the inclusion of property in the deceased's estate which will be subjected to such a tax (chapter 5). The fourth objective is to provide the reader with two diagrams which will enable such person to determine: whether a deceased person's estate will be subject to estate duty in terms of the current Act 45 of 1955, as amended (hereafter, referred to as the Act); and what an estate consists of (chapter 6). The fifth objective is to provide the reader with a comprehensive alphabetical property checklist to enable such person to determine whether a specific asset should be included in the estate of a deceased person (chapter 6).

LL.M. (Tax Law)
Capital Gains Tax (“CGT”) was introduced with effect from 1 October 2001 by the insertion of section 26A and an Eighth Schedule into the Income Tax Act 58 of 1962, by the Taxation Laws Amendment Act 5 of 2001. Paragraph 40(1) of the Eight Schedule provides that a deceased person must, with certain exceptions, be treated as having disposed of his assets to his estate for proceeds equal to the market value of those assets as at the date of death. Paragraph 40(1A) of the Eight Schedule provides that if an asset of a deceased person is treated as having been disposed of under paragraph 40(1) and is transferred directly to the estate of the deceased person, the estate must be treated as having acquired the asset at a cost equal to its market value as at the date of death for base-cost purposes, and if the asset is transferred directly to an heir or legatee, the heir or legatee must be treated as having acquired the asset at a cost equal to its market value as at the date of death for base-cost purposes. The capital gain will be the difference between the market value of a taxable asset of the deceased on the date of his death and its base cost to him, which is included in his final income tax assessment and which will have to be settled out of the estate‟s assets. There are many arguments in favour of the discontinuance of the levying of CGT at the death of a taxpayer in South Africa, which arguments become evident when comparing the South African CGT provisions regarding the levying of CGT at death with tax jurisdictions such as Australia, the United States, the United Kingdom, Canada, Botswana and Nigeria. Canada for example abolished their inheritance tax in 1972 which in that particular situation justifies the levying of CGT at death. If CGT will continue to be levied at the death of a taxpayer it is suggested that a carry-over approach in terms of which the heir inherits the asset at its acquisition cost and the CGT liability is deferred until the heir actually disposes of the asset should be followed. This approach is currently followed in Australia, Botswana and Nigeria. The holder of an inherited bare dominium will suffer at the hands of a CGT anomaly where the deceased created a limited interest, for example a usufruct over a fixed property bequeathed by him to the bare dominium holder. The anomaly that transpires is that the limited interest created by the deceased will result in an artificial drop in the base cost of the fixed property so bequeathed and there will be no adjustment to the base cost when the bare dominium holder succeeds to full ownership of the fixed property, for example when the usufructuary passes away, meaning that the same capital gain will be taxed twice. It is submitted that legislative amendments are required to provide for an increase in the base cost applicable to the bare dominium holder when the usufructuary eventually passes away. Alternatively the SARS‟s current practice in this respect should be altered to avoid the unbearable situation where a capital gain may be taxed at 2 separate instances. At least two anomalies exist when dealing with capital losses in the deceased‟s final period of assessment and in the winding up of the deceased‟s estate. Firstly a capital loss may not be carried forward from the deceased‟s final assessment to his deceased estate to be set off against capital gains that may be realised in the winding up of the estate. Secondly a capital loss incurred on the sale of a capital asset during the winding up of a deceased estate cannot be carried over from the deceased estate to the heirs of the deceased and will thus remain unutilised. It is suggested that the method followed in Canada in respect of capital losses that occurred in the year of a taxpayer‟s death should be followed in South Africa, ie that such capital loss may be carried back three years in order to reduce any taxable capital gains that occurred in those years or that the capital losses may be utilised to reduce other income of the taxpayer in his final return. It is further suggested that this method should also be followed in respect of unutilised capital losses that occurred in the winding up of the estate, alternatively the capital losses so realised must be carried over to the heirs of the deceased.

In section 3(3)(d) of the Estate Duty Act 45 of 1955 (the Act) the legislature introduced the concept "competent to dispose", described in section 3(5) of The Act as a "power". If the deceased was "competent to dispose" property for his own benefit or that of his estate, section 3(3)(d) deems that property to be property of the estate. In order to determine when property may be deemed property of the deceased estate it is necessary to analyse the meaning of section 3(3)(d) as read with section 3(5) of the Act. An analysis of section 3(3)(d) of the Act indicates that it may be applied to those with a legal right to dispose of property for their own benefit or for the benefit of their estates. This interpretation is based on the meaning of "competent to dispose", and "power" as derived form the analysis.
Private Law
LL.M.

M. Comm.
The purpose of this study is to determine the desirability of implementing of a system of capital transfer tax in South Africa. The implementation of a capital transfer tax system in South Africa should generate additional income without placing a further administrative or financial burden on the South African Revenue Services. A system of capital transfer tax will replace the current system of donation tax and estate duty in South Africa. Any new system will be based on the principles established by these two forms of taxation, but should simultaneously address many of the loopholes in these two systems. Since the Margo Commission's recommendation in 1986 that South Africa should implement a system of capital transfer tax, much has been written about this form of capital tax but the government has never implemented the recommendations. However, it is certain that a system of capital transfer tax will be implemented in South Africa in the future. The current system of donation tax and estate duty is not effective in levying the taxes and earning the income for the government for which it was originally designed. Over the years numerous ways have been developed to legally avoid these taxes, which is why they are referred to as voluntary taxes (Anon, 1988:17). This dissertation consists of three parts: The first part is a literature study in which capital taxes are discussed. The distinction between income and capital is reviewed. The various forms of capital taxes are identified and the arguments for and against introducing one of them are discussed. This part concludes with arguments for and against a system of capital transfer tax for South Africa. The second part is an analysis of donation tax and estate duty as currently levied in South Africa. The shortcomings of the current legislation are discussed and legal ways to avoid estate duty are identified. The inheritance tax system in the UK and the donation tax and estate duty system in the USA are also briefly discussed. The anti-avoidance measures implemented in these countries are discussed in some detail in view of recommendations to implement similar measures in South Africa. In the third part a capital transfer tax system for South Africa is proposed. Precautions to minimise the avoidance of these taxes through interest-free loans and generation-skipping devises are discussed. Finally a conclusion is reached regarding the matters analysed in this dissertation.