• 3 Marks

AT – Nov 2015 – L3 – Q3c – Business income – Corporate income tax

Explanation of the tax implication of a land gifted under a will.

Kwame Patapaa has written in his Will that a parcel of land located in Kasoa should be given to his friend Adongo Muda upon his death in his Will. He is, however, not sure of the tax implication of this transaction and has approached you for assistance in this direction.

Required:
Detail out your response to this question.

This is a clear case of a gift from Kwame Patapaa to Adongo Muda, as land is a taxable gift under section 106 of the Internal Revenue Act 2000, Act 592, as amended by Act 2003, Act 644.
(1.5 marks)

Conclusion:
However, under section 105 of the Act, taxable gifts received under a will or upon intestacy should not be included in the calculation of gift tax. Therefore, the taxable gift of land received by Adongo Muda is exempt.
(1.5 marks)

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