Commentary

C2.108 Assumption of liability by disponor

Capital gains tax
Capital gains tax | Commentary

C2.108 Assumption of liability by disponor

Capital gains tax | Commentary

C2.108 Assumption of liability by disponor

The assumption of a liability by the disponor, in connection with the disposal of an asset, is reflected in the capital gains tax computation as a reduction of the consideration received for disposal of the asset, because part of the consideration received is referable to assumption of the liability1.

Similarly, a deduction is due where the disponor assumes a contingent liability in connection with the disposal. However, certain types of contingent liability are expressly to be left out of account in computing gains or losses2. The disposals affected are:

  1.  

    (a)     a disposal by way of an assignment of a lease of land or other property, or a chattel, under which the assignee is burdened with obligations which are expressly undertaken or are implied by law, whether at the time of the

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