SARS Resurrects Old Guide On Property Transfers
Thursday, January 28, 2016
While it is no longer possible to transfer a residence
from a company or trust to an individual tax-free, the South African Revenue Service has resurrected its previous guide on the topic, as it could still be useful for
taxpayers in determining the consequences of transfers prior to
December 31, 2012.
Generally, the guide deals with the windows of opportunity that were available
in 2002 and 2012 for the disposal of a residence from a company or trust into
the hands of individuals free of transfer duty, capital gains tax (CGT), secondary
tax on companies (STC), and dividends tax. The transfer duty and donations tax
consequences are also examined.
The South African tax code now provides that, generally, only an individual
is entitled to disregard the whole or a portion of the capital gain or capital
loss on the disposal of his or her primary residence. However, historically,
many individuals decided to purchase their residences in companies or trusts
for a variety of other reasons, including protection from creditors, and the
avoidance of transfer duty and estate duty.