So if a deemed dividend , then no P12A or P19 ? Will the deemed dividend be on the total loan waived?
Important:
This answer is based on tax law for the tax year ending 28 February 2019.
Answer:
Section 19(6A) deals with the instance where the asset was disposed of in a year of assessment prior to that in which that debt benefit arises. It essentially results in an adjustment by way of a recoupment in the current year of the previous amount accounted for when the asset was sold.
So are you saying that for a loan that does not cover the 2 scenarios above, there are no further CGT consequence on that loan waiver? Yes, indeed. In principle, the debt then funded something other than al allowance asset or allowable expenses.
One bank account was used for both entities – the trustees were then probably acting in contravention of the Trust Property Control Act and not acting according to their fiduciary responsibilities.
In the Companies Act, unless the context indicates otherwise "distribution" means a direct or indirect-
(c) forgiveness or waiver by a company of a debt or other obligation owed to the company by one or more holders of any of the shares of that company or of another company within the same group of companies,
but does not include any such action taken upon the final liquidation of the company; …
In the Income Tax Act, unless the context otherwise indicates, 'dividend' means any amount, other than a dividend consisting of a distribution of an asset in specie declared and paid as contemplated in section 31(3), transferred or applied by a company that is a resident for the benefit or on behalf of any person in respect of any share in that company, whether that amount is transferred or applied –
(a) by way of a distribution made by; …
If it is a dividend it can’t be a waiver of debt.