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Gift Tax

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Gift Tax

A gift is defined to mean a receipt without consideration or for inadequate consideration. A thing given willingly to someone without payment is considered a gift.

Gift from Employment

These are gifts received in respect of the employment. Such gifts may arise from one’s employment relationship, donated by the employer, an associate of the employer or a third party under an arrangement with the employer or an associate of the employer. Outlined under section 4(2vii), of Act 896, 2015  

Gift from Business

A person may receive gifts in respect of the business. Gifts given by the business, or on behalf of the business or through the business relationship. This is described under section 5(2vi), of Act 896, 2015 

Gift from Investment

A gift received by a person other than a gift received in respect of business or employment. Under section 6(2v) as amended. 

Rate of Tax

The tax payable on gifts as defined above and under section 4(2vii) and 5(2vi) of Act 896, 2015 is at a graduated rate that is added to the person’s income from employment or business for the year of assessment.

The tax payable on gift from investment is 25% for a resident Ghanaian and 30% for a non-resident Ghanaian.

Taxable Gift

A Taxable gift includes:

  • Any of the following assets situated in Ghana: building of a permanent or temporary nature, land, shares, bonds and other securities, money, including foreign currency, business and business assets, and any means of transportation (land, air or sea), goods or chattels not included in the above or part of, or any right or interest in/ to/ over any of the assets referred to above.
  • An asset or a benefit, whether situated in Ghana or outside Ghana, received by a resident person as a gift by or for the benefit of that person. A resident person is one who has stayed in Ghana for cumulative 183 days within the year of assessment.
  • An asset, whether situated in Ghana or outside Ghana, received by or for the benefit of a resident person as a gift where the asset has been or is credited in an account or has been or is invested, accumulated, capitalized or otherwise dealt with in the name of or on behalf of or at the direction of that person.
  • A favor in money or money’s worth or a consideration for an act or omission or the forbearance of an act or omission that ensures for or to the benefit of a resident person.

Exemption

A taxable gift received by a person under a will or upon intestacy, by person from that person’s spouse, child, parent, brother, sister, aunt (means parent’s sister), uncle (means parent’s brother), nephew or niece (means child of a parent’s sister or brother), by a religious body which uses the gift for the benefit of the public or a section of the public and for charitable purpose are exempted from the tax

Valuation

The value of a taxable gift is the market value of the gift at the time of the receipt.

 

Returns and Payment of Tax

Tax on gifts received by an individual if that gift is not in respect of business or employment shall within 21 days of receipt furnish the GRA with return in writing (link- Gift Tax Return) containing the following information:

  • The description and location of the taxable gift
  • The total value of the gift
  • How it is calculated and tax payable with respect to that gift
  • The full name and address of the donor of the gift
  • Any other information required by the Commissioner

Where a person is required to furnish a return under that person shall remit to the Commissioner the amount of tax calculated as payable and the payment of tax is due at that time.

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