n Business Tax and Company Law Quarterly - Editorial

Volume 3, Issue 2
  • ISSN : 2219-1585


A very important question is postulated by Adv Milton Seligson SC in his article dealing with the preferential rights of a mortgagee where disposal of the mortgaged property of an insolvent debtor's estate triggers a liability for capital gains tax (CGT). In short, he asks: is the mortgagee entitled to the proceeds derived on disposal of the debtor's immovable property on liquidation/sequestration without the deduction of CGT? After an interesting analysis of the Income Tax Act, both the former and current Companies Act, the Insolvency Act and English and South African authorities, Adv Seligson concludes that the mortgagee is entitled to the proceeds derived from the disposal of the mortgaged property without deduction of any CGT that might be payable. This conclusion no doubt flies in the face of conventional wisdom and will be hotly disputed by SARS.

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