SARS tax amendment for ownership of secondary properties

Tax

Last year South African Revenue Services introduced a tax amnesty covering capital gains tax, transfer duty and secondary tax for all natural persons South African citizens willing to transfer property owned by them in a company, a trust or a close corporation into their own names.The amnesty, it was made clear, would expire in December 2012.

This “enlightened” measure, says Tony Clarke, MD of Rawson Properties, was hailed by the property sector as a breakthrough because the capital gains tax on companies 15% was high and on trusts higher still 20%, whereas by contrast individuals usually pay only ±10% and more importantly are exempt of tax on the first R1,5 million capital gain.

However, there was one major snag: the exemption applied only to property in which the owner “ordinarily resided”, i.e. his primary residence. Second homes, holiday homes, investment properties and the like initially could not be transferred to individual ownership without paying in full the taxes referred to.Now, however, that has all changed. The recently promulgated Tax Laws Amendment Bill allows secondary residential properties to benefit from the amnesty in the same way as primary properties – provided the transfer is set in motion, i.e. not necessarily completed – by December 2012.

Clarke said that there will still be cases in which it might be preferable to hold the property in a company or other legal entity.  He pointed out, too, that the conveyancer’s fee would remain payable.Nevertheless, he said, the vast majority of property owners stand to gain significant tax benefits if they make use of the amnesty before it expires and he advised them strongly to do so.

via SARS tax amendment for ownership of secondary properties – SA Commercial Prop News | Commercial Property News in South Africa

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Sole Proprietor

found photo: business leaders

“A sole proprietorship, also known as a sole trader or simply a proprietorship, is a type of business entity that is owned and run by one individual and in which there is no legal distinction between the owner and the business. The owner receives all profits (subject to taxation specific to the business) and has unlimited responsibility for all losses and debts. Every asset of the business is owned by the proprietor and all debts of the business are the proprietor’s. This means that the owner has no less liability than if they were acting as an individual instead of as a business” (Wikipedia).

See more on sole proprietors here: SoleProprietor.co.za

Deal sealed for free port development

Location (in red) of the Clark Freeport Zone w...

REAL ESTATE firm Megaworld Corp. has forged a deal with state-run Clark Development Corp. to build a P7-billion, mixed-use development at a free port in Pampanga, a disclosure to the local bourse yesterday showed.

The Andrew L. Tan-led developer signed a memorandum of agreement to develop portions of the Clark Freeport Zone and Clark Special Economic Zone totaling 550 hectares, the disclosure stated.

The Megaworld complex, located within the site of the former United States Air Force base in the Philippines, will feature office, commercial, and retail spaces, as well as leisure and entertainment, residential, health and wellness components.

These amenities would be able to cater to foreign and local business process outsourcing firms, retirement communities, and tourism enterprises beyond the company’s existing base in Metro Manila, Megaworld said.

Megaworld’s planned mixed-use development, which will start to be constructed next year,is seen to boost the Clark Freeport zone’s bid to be a major regional investment hub.

Megaworld, founded and incorporated in 1989, is engaged in the development of large-scale mixed-use planned communities or townships that integrate residential, commercial, educational, leisure and entertainment components in Metro Manila.

via Deal sealed for free port development

New Companies Act points system

A bond issued by the Dutch East India Company,...

Image via Wikipedia

Initial complications are to be expected as companies and close corporations CCs try to work out how to calculate public interest scores PIS in the New Companies Act and interpret the regulations.That’s the view of Ian Scott, joint managing partner of the Grant Thornton Cape office.“The new Companies Act, which came into effect on 1 May 2011, includes a PIS calculation which determines what report these entities need going forward, unless they hold assets in a fiduciary capacity with an aggregate value of over R5 million, in which case an audit is needed.”“The new Act also brings increased regulation to close corporations as their PIS calculations are subject to the same criteria as companies, although the outcomes are different,” says Scott.The Regulations provide for both activity and size criteria to determine whether or not companies or close corporations require audited financial statements. The Regulations state that every entity is required to calculate its PIS at the end of each financial year and the score is calculated as the sum of the following:A number of points equal to the average number of employees as determined by the Labour Relations Act of the company during the financial year;One point for every R1 million or portion thereof in third-party liabilities at year end these exclude shareholder loans and intercompany loans with common shareholdings;One point for every R1 million or portion thereof in turnover during the financial year; andOne point for every individual who, at the end of the financial year, is known by the company to directly or indirectly have a beneficial interest in the business.If a close corporation has a PIS score below 100 it requires an accounting officer’s report just the same as it did previously.

via New Companies Act points system gives useful guidelines but determinations complicated – Grant Thornton.