12. Section 40 of the principal enactment is hereby amended as follows: -
| (1) by the substitution, for paragraph (e) and paragraph (f) of that section, of the following new paragraphs: -
| | " (e) where there is a release, discharge, surrender or abandonment of any debt (other than a debt which is treated as a bad debt and allowed as a deduction for the purposes of income tax under tills Act) or contract or of any interest in any property by any person, the value of the release, discharge, surrender or abandonment shall be deemed to be a gift made by him; | | |
| | (f) the gift of any property on, or after July 18, 1958, subject to a reservation in favour of the donor or any other-person shall be deemed to take effect when, it is made and not when the interest created by. title reservation is extinguished; and "; and | | |
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| (2) by the addition, at the end of that section, of the following new paragraph: -
| | " (g) subject to the provisions of paragraphs (b) and (c), where any property is transferred by any person to any member of his family or to any son or daughter of that person or of his spouse, being a son or daughter not included in the family of that person, and the entirety or a part of the consideration for the transfer is the creation, of a debt or an annuity in favour of the transferor, such debt or annuity shall be disregarded and the transferor shall be deemed to have made a gift of such property to the transferee to the extent of the value of the debt or annuity created.". | | |
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Sri Lanka Consolidated Acts