SARS- “Amnesty” Transfers: Updated, widened provisions
Posted by Clive Smith
Since the inception of the window period allowing individuals to transfer their primary residence from a juristic entity into their personal names under certain conditions, SARS have adjusted such conditions, during such period, to widen such relief for taxpayers.
There is still much conjecture between accountants, legal practitioners and financial experts as to how far this relief extends, but the basic changes are set out below:
Initial position: Initially under Paragraph 51 of the Act:
1. Property must be less than 2 hectares in extent.
2. Natural person taking transfer must have been in occupation since February 2009 at such property, and must be either sole member in the CC, shareholder in the Company or their spouse could be such.
3. Steps must be taken by the juristic entity to dissolve such entity within 6 months of such transfer.
Current position under Paragraph 51A as amended (contracts or suspensive conditions met from 1 October 2010:
1. Property can be greater than 2 hectares in extent as long as the property is mainly used for domestic/residential purposes by the connected person taking transfer. (this is measured on a floor area basis, so at least 50% of such property must be used for such domestic/residential purposes.)
2. The occupation since February 2009 of the connected person condition remains.
3. The connected person may be a 20% shareholder in the company or hold any size members interest in the CC.
4. The entity must still be dissolved as initially set out.
So the scope or ambit of such provisions is widened, but one should be careful to ensure that your specific set of circumstances falls under such provisions before taking such steps.
A reminder, the transfer of such properties needs to be commenced effectively prior to end December 2012.
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