Non-Recognition Rules of Residency For Some Cases Only Section 79
Non-Recognition Rules of Residency For Some Cases Only Section 79: Under section 79, no gain or loss arise on disposal of assets under certain circumstances mentioned therein however there was requirement that in order to avail the benefit of non-recognition rules, the acquirer of the asset must be resident at the time of acquisition. Now the Finance Bill seeks to restrict the said condition of residency only for below mentioned cases of disposals:
- a) by reason of the compulsory acquisition of the asset under any law where the consideration
received for the disposal is reinvested by the recipient in an asset of a like kind within one year of the disposal.
- b) by a company to its shareholders on liquidation of the company.
- c) by an association of persons to its members on dissolution of the association where the assets are distributed to members in accordance with their interests in the capital of the association.
Thus, the Bill proposes to harmonize the position through amendment whereby this non-recognition rules shall also be applicable in case of non-resident persons for following transactions:
o Transfer of asset between spouses;
o Transfer of asset in case of death of a person to a beneficiary or to an executor;
- Gift of asset to a relative
For more information on FBR’s new regulations / circulars/ SROs/ amendments in taxation laws in Pakistan please visit https://www.fbr.gov.pk/