• 3 Marks

PT – Nov 2024 – L2 – Q4b – Tax Implication of Gift under Income Tax Act

Advise on the tax implications of receiving a gift from a spouse under the Income Tax Act.

Madam Tanaa is an employee of Tapoli Brewery Ghana LTD. Her husband, who is a retired staff of Tapoli Brewery LTD, gifted her a brand-new Toyota Camry costing GH¢270,000 on their 20th wedding anniversary. Madam Tanaa is worried about the tax implication of the gift and has approached you as a student learning tax at the Institute of Chartered Accountants, Ghana.

Required:
Advise Madam Tanaa on the tax implications of the gift of a Toyota Camry she received from her husband on their wedding anniversary, including the various options available to her.

Gift tax according to the Income Tax Act, 2015 (Act 896), is when a person receives a gift in respect of their employment, business, and/or investment other than under a will, upon intestacy, or by way of transfer to the spouse, child, or parent of that person. Any such gift is taxable under the income tax law at 25%.

Thus, the brand-new Toyota Camry worth GH¢270,000 from the husband to Madam Tanaa, the wife, on their wedding anniversary is not taxable.

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