TRANSFER OF PROPERTY FROM A COMPANY, CC OR TRUST INTO THE NAME OF AN INDIVIDUAL

In the latter part of 2009 we sent a Newsflash about the window of opportunity which would be opened in regard to the transferring of certain immovable properties from Close Corporations, Companies and Trust to individuals.

We have pleasure in advising that SARS has now passed the necessary legislation and approved the necessary forms to enable such transfers to now take place.

Due to the large savings on Capital Gains Tax and on dividends tax and STC (secondary taxation on companies) we strongly suggest that clients who own close corporations and companies which own immovable property make use of the opportunity to transfer such properties to their individual names. In the instance of those clients who own trusts which own immovable property, consideration should also be made as to whether one should take advantage of this window of opportunity although the considerations are less stronger in the case of a trust.

In the case of a Close Corporation and Company one saves paying dividends tax or STC and no Capital Gains Tax in paid in respect of the transfer which means that when Capital Gains Tax is eventually paid there will be a large saving in regard to the same.

When one considers that the Capital Gains Tax payable by a Company or Close Corporation is 14% whereas the amount payable by an individual is between 0% and 10% one can see the dramatic savings which can be effected in regard to Capital Gains Tax. Even more importantly, an individual who sells his primary residence is exempted from paying Capital Gains Tax on the first R1 500 000.00 which means that by transferring the property into the name of the individual a huge saving will be effected. As dividends tax is presently 10% a further large saving can be effected by utilizing the window of opportunity.

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Article taken from Property 24

A seller should always ask for a copy of the estate agent’s standard sale agreement as several problems may arise from it.

Anton du Plessis, CEO of Vineyard Estates, says a copy of this document should be sent to the seller’s attorney/conveyancer for perusal because this conveyancer will in most cases be handling any subsequent sale contract into which the seller enters.

“Contrary to the public’s perception, there is, in fact, no such thing as a standard sale agreement,” said du Plessis.

“Every good agency will have used their experience and the advice of their conveyancer to draw up a document that they find meets their needs.”

“If the conveyancer can see the agent’s document before he enters into the sale agreement, he will be able to iron out any ambiguities or omissions that he perceives to be in the agreement.

“It is far better to do this before the agreement is signed because any changes made once that has been done will have to be taken back to the clients for approval,” said du Plessis.

A particularly “tricky” issue, said du Plessis, arises when a home is sold subject to another home (the buyer’s) being sold first.

“Often the sale document will stipulate the date by which the buyer’s current home (or some other property) has to be sold, failing which the seller has the right to end the deal – but what happens once the buyer has sold his property, thereby fulfilling the suspensive clause, and then something goes wrong with his sale? Many agreements, rightly, specify simultaneous transfers, as the purchaser needs the funds from his sale to complete the new purchase.

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