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Tax implications on transfer of assets through general power of attorney
A legal Owner of An asset wants to transfer his asset to some other person. Instead of direct transaction with that person, he first transferred his asset to an agent through a general power of attorney. And consequently that agent transferred the assets to that person. My question is : When will the liability of capital gains tax arise under such case?
Replies (1)
POA is not a transfer document. The owner must have appointed someone to find a buyer of the asset and finalise the deal by giving him POA. The owner shall be deemed to have been sold the asset to the buyer when the POA, his agent, signs the agreement of sale with the buyer. So capital gain shall arise when the sale agreement is executed and not when POA is signed.
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