25 Jul 2019

Minister of Finance and Economic Development, Mr Kenneth Matambo, has presented to Parliament a Capital Transfer Tax (Amendment) Bill.

The bill seeks to amend the Capital Tax Act (Cap.53:02) to, among others, align the Transfer Duty Act with respect to exemptions under the two pieces of legislation. 

Mr Matambo said the bill would amend Section 4 (I) of the Capital Transfer Tax Act, which provided for exemption from payment of Capital Transfer Tax. 

 He said Capital Transfer Tax Act provided for exemption of transactions involving transfer of property to a person in consideration of the performance of any customary rites such as bogadi if their value did not exceed P5 000. 

He indicated that the bill also sought to amend the act to provide for exemption of such transactions regardless of their monetary value. 

In addition, Mr Matambo indicated that the bill pursued to delete the amount of P15 000 under sub paragraph (iv) of section 4 (1) (a) of the Act. 

He said it shall therefore provide that any disposal of property that consisted of household goods, chattels and personal belongings of a deceased person did not attract capital transfer tax irrespective of the value of the transaction. 

He explained that no tax at all on property of the deceased persons shall be imposed to their heirs or descendants regardless of the value of such property. 

This amendment, Mr Matambo noted, would align the Capital Transfer Tax Act with the Transfer Duty Tax in that regard. 

Furthermore, he indicated that where the act provided that capital transfer tax shall not be chargeable in respect of the value of property disposed of by a donor for maintenance, education or training of a child for a period ending not later than the year in which the child attains age 21 or, after attaining that age, if the child continues to undergo fulltime education and training, the year in which the child ceases to undergo full time education or training; it shall also be amended. 

Mr Matambo said the bill would pursue to reduce the age from 21 to 18 in order to align the age with the current age majority. 

Presently, the minister said the Act provides for exemption from payment of capital transfer tax for transactions involving transfer casual gifts valued at P5 000 or less. 

Minister Matambo said that the Bill would make provision to increase the exemption amount to P25 000 for such transactions in order to take care of inflationary changes. 

In order to further align the Capital Transfer Tax Act with the Transfer Duty Act, and to ensure that transactions that were exempt from transfer duty were not subjected to capital transfer tax, Mr Matambo said the Bill would insert a new paragraph under section 4(i) of the Act to exempt all transactions involving transfer of immovable property that were exempt from transfer duty under Transfer Duty Act. ENDS