WINDOW PERIOD: TAX EXEMPTION TRANSFERS :PROPERTIES OWNED IN COMPANIES/CC’s/ TRUSTS to Individuals.

This will aid in avoiding certain capital gains tax, transfer duty, dividends and donations tax and STC implications as a result of the transfer and in future.

The most important criteria as set out by SARS are as follows:

1.    The natural person (individual) and his/her spouse or either, alone, MUST have held all the shares or members’ interest in the company or CC from the 11th of  February 2009 to date of transfer. Any other third party involved in holding such interests nullifies the exemption.

2.    The natural person must have ordinarily resided in the property (alone or with
Spouse) for mainly residential purposes from the 11th of February 2009 to date of transfer.

3.    The transfer of the property in the deeds office MUST take place before the 31st of December 2011.

4.    The property must be less than two hectares in extent.

If the property is owned by a Trust, the above excluding 1. is applicable. Further the individual acquiring the property must have financed all expenditure used by the trust to acquire the property, improve it or have donated the property to the Trust.

In the case of one spouse owning all the members interest in the CC or all the shares in the company, the property, if the above criteria are met, may be transferred to their spouse.

The immediate benefit to remember is the primary residence exclusion or rebate on capital gains tax for natural persons. The First R1.5million gain on disposal of a primary residence for an individual is exempt from capital gains tax, whereas for a company or CC or trust no such rebate applies and the capital gain is taxed from the first rand of such gain.

Should you wish to take advantage of such window period, check you meet the criteria set out above and contact us so we can assist you in having the transfer done.

Snymans Inc