This section deals with the transfer of assets between divorced persons. I have a personal interest in this matter, as has the Minister, and would like to know the purpose of the section.
SECTION 48.
Amendment No. 77 not moved.
Question proposed: "That section 48 stand part of the Bill."
This section is essentially a house-keeping measure in that it re-enacts in the tax code a provision in the Family Law (Divorce) Act, 1996, for the capital gains tax treatment of persons who obtain a divorce. The purpose of this is to provide access to all tax provisions centrally in the Tax Acts.
In cases where a person has obtained a decree of divorce under the 1996 Act and, pursuant to a court order under the Act, disposes of an asset to his or her former spouse then, unless the asset is used for the purpose of a trade, the disposal is not subject to capital gains tax.
The section also provides that when the spouse who receives the asset disposes of it he or she is treated for the purposes of indexation relief as if he or she had owned it during the entire period it was in the ownership of the former spouse. In other words, the spouses are treated for capital gains tax purposes as if they were still married.
In other words, if the asset was owned by the husband pre-1974 and transferred to his wife in 1997 it will be taken as if he was disposing of it when she sells it.
Question put and agreed to.