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Legally Speaking
|
Legally Speaking is a platform
that allows users to receive the most up to
date hospitality industry news of a legal
nature. Here you will find thought provoking newsflashes
or pieces of information about the legal side of tourism
industry news, allowing you to best keep up to date
with industry advances.
Make sure you check back regularly for legal updates
on hospitality industry news. Alternatively,
you can sign
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news, but also containing valuable insight on legal
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| -------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| LEGALLY
SPEAKING…
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October 2011
CAN THE NCA APPLY TO A PROPERTY
SALE? |
It
may
sound
out
of
place
to
refer
to
the
National
Credit
Act
and
a
property
sale
agreement
in
the
same
context,
because
a
typical
sale
of
land
is
certainly
not
a
credit
agreement!
Or
can
it
be?
When
land
is
sold
in
instalments
and
a
charge
is
levied
by
the
seller
in
respect
of
the
deferment
of
the
full
payment,
the
transaction
may
constitute
a
credit
agreement.
This,
in
turn,
may
require
the
seller
to
do
a
credit
check
on
the
purchaser
to
ensure
that
the
agreement
does
not
constitute
reckless
credit
and
to
register
as
a
credit
provider. |
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October 2011
CHILDREN OWNING LAND? |
If
land
is
donated
or
bequethed
to
children
born
or
to
be
born
of
any
person
or
from
any
marriage,
or
is
acquired
on
behalf
of
such
children,
transfer
of
the
land
can
be
effected
on
behalf
of
such
children.
In
such
a
case,
the
land
may
be
registered
in
the
name
of
a
person
to
hold
it
in
trust
on
behalf
of
the
children.
Once
the
identities
of
the
children
have
been
established
after
their
birth
the
Deeds
Office
will,
upon
application,
endorse
the
title
deed
with
their
names
and
the
title
deed
will
thereupon
be
deemed
to
be
in
favour
of
such
children,
as
if
the
transfer
had
originally
been
passed
to
them
in
person. |
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October 2011
CHECK TITLE DEED CONDITIONS,
OR FACE DELAYS! |
 |
It
is
important
to
peruse
a
title
deed
for
lapsed
conditions
or
a
required
consentbefore
registration
can
take
place.
For
example,
a
title
deed
may
contain
a
pre-emptive
right
in
favour
of
a
previous
Seller.
(A
pre-emptive
right
is
a
right
in
terms
of
which
the
Seller
undertakes
not
to
sell
the
property
unless
the
previous
owner
has
been
given
an
opportunity
to
repurchase
it).
If
the
Deeds
Office
overlooked
this
condition
during
previous
transfers
then,
in
order
for
registration
to
take
place,
the
conveyancer
must
lodge
either
a
consent
by
the
previous
Seller
to
the
transfer
or,
alternatively,
a
consent
by
the
previous
Seller
to
the
condition
being
removed
from
the
title,
both
of
which
may
cause
delays
as
the
previous
Seller
could
be
hard
to
locate. |
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| PROPERTY
LAW UPDATE |
| |
August 2011
THE NEW COMPANIES ACT
- PART VII: MUST MY COMPANY
OR CC BE AUDITED? |
The
audit
and
review
requirements
of
the
Companies
Act
71
of
2008
This
is
the
seventh
and
last
in
a
series
of
notes
in
which
we
guide
you
through
the
essentials
of
the
new
Companies
Act,
with
specific
emphasis
on
aspects
that
will
affect
typical
property
transactions.
The
focus
in
this
insert
is
on
the
auditing
and
independent
review
requirements
in
respect
of
companies
and
close
corporations.
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August 2011
TRUSTS’ STING IN
THE TAIL: DON’T
USE THEM AS YOUR ALTER
EGO |
FirstRand
Limited
trading
inter
alia
as
First
National
Bank
v
Britz
and
Others
[2011]
ZAGPPHC
119;54742/09
(20
July
2011)
Using
a
trust
merely
to
shield
assets
from
creditors
invites
the
risk
of
a
court
holding
that
the
trust
was
used
as
the
founder’s
alter
ego.
In
such
an
instance,
in
order
to
satisfy
creditors,
a
court
may
declare
trust
assets
to
be
the
personal
assets
of
the
founder,
thereby
rendering
the
assets
executable.
Read
More
|
The
Judgment
|
Summary
of
the
Judgment
|
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| -------------------------------------------------------------------------------------------------------------------------------------------------------------- |
NEWSFLASHES
August 2011
BOND COSTS: NEW ADD-ONS
TO KNOW ABOUT |
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Attorney
Gateway,
the
electronic
instruction
provider
by
which
the
instruction
to
register
a
bond
is
sent
to
attorney
firms,
has
advised
that
they
will
now
charge
separately
for
electronic
bond
document
maintenance
(including
updates),
together
with
document
generation
fees.
This
fee
varies
from
bank
to
bank
and
ranges
between
R35
and
R90.
Assist
your
clients
by
advising
them
that
these
additional
fees
will
now
be
payable
when
they
register
a
bond. |
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August 2011
AGENTS NEW EDUCATION REQUIREMENTS:
EEAB GRANTS 24 MONTH EXTENSION |
The
Estate
Agency
Affairs
Board
(EAAB),
acting
in terms
of the
Education
Regulations,
passed
a resolution
on 25
July
2011
to grant
a 2
year
extension
to all
estate
agents
who
were
registered
on 15
July
2008
and
who
were
therefore
required
to complete
their
new
estate
agent
qualifications
by 31
December
2011.
Such
estate
agents
will
now
have
until
31 December
2013
to complete
the
qualifications.
Read
the
EAAB’s
25 July
2011
media
release
here.
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June 2011
SECTIONAL TITLE ACT –
RIGHT TO EXTEND A SCHEME |
Did
you
know
that
in terms
of the
Sectional
Titles
Act,
where
a real
right
to extend
a scheme
has
been
reserved
in favour
of a
developer,
such
right
must
be disclosed
to the
purchaser
in the
agreement
of sale?
Where
that
real
right
has
not
been
disclosed
in the
agreement
of sale
it is
voidable
at the
instance
of the
purchaser.
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June 2011
SECTIONAL TITLE SCHEME
– UNANIMOUS RESOLUTION |
| In
a Sectional
Title
Scheme,
a unanimous
resolution
can
be passed
without
convening
a meeting.
Any
such
proposal
must
be sent
to all
the
individual
owners
calling
for
all
members
of the
Body
Corporate
to agree
in writing
to the
suggested
proposal.
Should
all
the
owner’s
consent
in writing,
a valid
unanimous
resolution
has
been
taken.
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June 2011
HOMES REGISTERED IN CLOSE
CORPORATIONS |
 |
Para
51A
of the
8th
Schedule
of the
Income
Tax
Act
provides
relief
for
homeowners
whose
properties
are
registered
in Close
Corporations,
Companies
or Trusts.
The
legislation
allows
owners
to transfer
their
properties
from
the
owning
entity
without
incurring
Capital
Gains
Tax
(CGT),
Secondary
Tax
on Companies
(STC)
or transfer
duty,
provided
certain
conditions
are
complied
with.
The
terms
of the
legislation
have
always
been
interpreted
by SARS
as applying
only
to primary
residences.
However,
in a
SARS
Guideline
dated
10 May
2011,
they
have
indicated
that
the
legislation
will
be amended
during
the
course
of 2011
(with
retrospective
effect
to 1
October
2010)
to allow
holiday
homes
to be
transferred
in terms
of Para
51A
and
therefore
qualify
for
CGT,
STC
and
transfer
duty
relief
too!
We will
advise
you
of the
effective
date
as soon
as SARS
makes
it known,
so stay
posted
for
updates
here. |
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June 2011
SARS AND SALES TRANSACTIONS |
When
dealing
with
a sales
transaction
subject
to VAT,
it is
important
to obtain
insight
into
the
Seller’s
VAT
compliance
background
- the
reason
being
that
SARS
is on
a war
path
to put
a stop
to attempts
by taxpayers
to avoid
paying
VAT
and/or
transfer
duty
and
personal
tax.
SARS
has
implemented
measures
to check
a Seller’s
compliance
records
to determine
whether
the
Seller
is guilty
of not
paying
timeously,
having
outstanding
payments
or even
not
filing
returns
timeously.
If any
of the
mentioned
circumstances
exist,
SARS
may
require
the
Seller
to take
certain
steps
before
issuing
the
transfer
duty
exemption,
such
as: |
 |
•
Resolve outstanding
obligations;
or
•
Provide security
for VAT payments
of current
transaction;
or
•
Instruct the
transferring
attorney to
undertake
to pay VAT
directly to
SARS from
the proceeds
of the sale
within 5 days
of
•
registration. |
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| -------------------------------------------------------------------------------------------------------------------------------------------------------------- |
April 2011
DOES YOUR TITLE DEED CONTAIN
RESTRICTIVE CONDITIONS |
Many Title
Deeds contain
restrictive
conditions
or personal
servitudes
(such as usufructs
or pre-emptive
rights) which
have already
lapsed.
The Deeds
Office insists
that such
lapsed conditions
be removed
from the Title
Deed when
the property
is dealt with
in any way,
even when
you register
a further
bond over
the property.
Be aware of
this added
requirement
and ask your
conveyancer
to check your
Title Deed
for any of
these conditions
to avoid hold-ups
when your
transaction
is lodged
in the Deeds
Office. |
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| -------------------------------------------------------------------------------------------------------------------------------------------------------------- |
April 2011
CAR CRASH! HOW DO I PROTECT
MY RIGHTS? |
A
motor
vehicle
accident
is a
very
stressful
situation.
Your
first
concern
will
be for
the
safety
of everyone
involved,
but
once
that’s
been
established,
it’s
important
to stay
calm
and
protect
your
rights.
The
success
of any
possible
claims
resulting
from
the
accident
will
depend
to some
extent
on the
quality
of the
evidence
you
can
provide.
If you
are
in a
position
to speak
to witnesses,
take
their
details.
It is
also
suggested
that
photographs
be taken
(even
with
your
mobile
phone)
of all
the
vehicles
involved,
as well
as the
scene
of the
accident.
Both
these
actions
may
be very
helpful
should
there
be any
legal
proceedings
you
wish
to institute,
or that
may
be instituted
against
you. |
 |
These could
include claims
for bodily
injuries against
the Road Accident
Fund, as well
as material
claims, i.e.
claims for
the damages
to the vehicles.
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April 2011
DIRECTOR! THE BUCK STOPS
WITH YOU : NEW COMPANIES
ACT |
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The
new
Companies
Act
is set
to come
into
operation
on 01
April
2011
and
rings
in an
era
in which
directors
are
substantially
more
exposed
to possible
personal
liability
for
company
losses.
This
may
happen
when
a director:
| • |
fails
to
act
with
the
required
care,
skill
and
diligence
that
is
required
of
someone
at
that
level; |
| • |
does
not
disclose
personal
financial
interests; |
| • |
abuses
his/her
position
to
gain
a
personal
advantage; |
| • |
does
not
act
in
good
faith
or
in
the
company’s
best
interests; |
| |
trades
under
insolvent
conditions;
or |
| |
approves
financial
statements
that
are
materially
false
or
misleading.
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April 2011
THE LATEST ON PLUMBING
CERTIFICATES FOR CAPE
PROPERTIES |
The City
of Cape Town
passed a new
water by-law,
which determines
that, with
effect from
18 February
onwards, all
sellers of
properties
within its
jurisdiction
must furnish
a Plumbing
Certificate
to the municipality
before transfer.
The
certificate
serves to
confirm that:
| • |
the
water
installation
conforms
to the
national
building
regulations; |
| • |
the
property’s
water
meter
is registering; |
| • |
there
are
no defects
that
can
cause
water
to run
to waste;
and |
| • |
no
rainwater
leaks
into
the
sewerage
system.
|
To
assist you,
we have posted:
| • |
a
list
obtained
from
the
Municipal
Demarcation
Board
indicating
which
areas
fall
under
the
City
of Cape
Town’s
jurisdiction;
and |
| • |
a
suggested
clause/addendum
to include
in your
sale
agreement
to provide
for
compliance
with
this
by-law. |
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February/March 2011
OVERBOOKED AIRLINES -
YOU NOW HAVE NEW RIGHTS! |
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Have
you ever been
packed and
ready to go,
only to learn
from the check-in
counter that
your paid
for flight
is over-booked?
Such incidences
are likely
to decrease
significantly
once the Consumer
Protection
Act becomes
fully operational
on 01 April
2011.
This is because
the Act obliges
an airline
to refund
you and pay
your direct
incidental
costs if,
after accepting
your reservation,
it was unable
to accommodate
you on the
flight because
of over-booking
and could
also not supply
you with a
comparable
service (i.e.
a seat on
another airline
to the same
destination,
at a similar
time and price).
If the airline’s
inability
stems from
circumstances
beyond its
control and
it took reasonable
steps to inform
you of the
shortage as
soon as reasonably
possible,
then it will
not be liable
to compensate
you. |
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February/March 2011
ROAD ACCIDENT FUNDS LIMITS
CLAIMS SEVERELY |
Despite concerted
efforts by interest
groups, the Constitutional
Court in November
2010 declared the
Road Accident Fund
Amendment Act 19
of 2005 constitutional.
The Amendment Act
introduced material
changes to the system
of compensation
for those injured
on South African
roads. Two of the
important changes
are the following:
• A claim
for loss of income
has been capped
at R166,667.00 per
annum;
•
A claim for loss
of support has been
capped at R160,000.00
per annum. This
amount relates to
a single breadwinner,
irrespective
•
of how many dependants
are claiming.
It is therefore
suggested that any
person earning in
excess of R160,000.00
per annum should
ensure that he or
she has adequate
personal cover,
that will include
disability insurance
and life insurance,
to cover the difference
between actual loss
and the amount that
can be claimed from
the Road Accident
Fund.
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February/March 2011
ACT WITH HASTE OR LOSE
YOUR LAND |
Should
it ever happen that
your property is
fraudulently transferred
without your knowledge,
act with haste to
assert your ownership!
A recent High Court
decision held that,
where an owner delayed
taking steps after
he became aware
that his land was
dishonestly transferred
to another, the
latter having sold
and transferred
it to yet a further
purchaser, the original
owner will not be
able to re-claim
the property.
The original owner’s
tardiness was negligent
because it fortified
both subsequent
purchasers, who
were unaware of
the fraud, to believe
they had valid title
to the property.
As such, the end-purchaser’s
defence of estoppel
succeeded and he
acquired an unassailable
right to continue
possessing the land.
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December 2011
URGENT NOTICE TO COMPANIES
AND CLOSE CORPORATIONS |
If the annual
return of a company
or close corporation
remains overdue
for longer than
6 months, CIPRO
may conclude that
the entity is no
longer conducting
business and commence
its deregistration.
Recently CIPRO confirmed
that some 760 000
entities have been
deregistered as
a result!
Deregistration of
a company brings
about a formal end
to the company and
it is thereafter
considered defunct
whilst, in the case
of a close corporation,
deregistration results
in the loss of legal
personality and
corporate status.
This has far reaching
consequences for
both the entity
and those who enter
into transactions
with the entity,
especially with
regard to liability
for debts of the
entity.
Do not join
the ranks of the
760 000 entities
already affected!
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December 2011
DEED OFFICES REMAIN OPEN
THIS FESTIVE PERIOD |
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The
Chief Registrar
of Deeds issued
instruction
to Deeds Offices
to remain
open during
the festive
period, including
28 - 31 December.
The Deeds
Office Cape
Town will
comply and
will operate
on a skeleton
staff for
urgent operations
in all sections.
Our offices
will be open
during this
period and
we will do
everything
possible to
register all
your transactions
on time. |
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December 2011
LAST CHANCE FOR TAX FRIENDLY
TRANSFERS |
The
2010 Taxation Laws
Amendment Act (signed
into law on 31 October
2010) introduces
substantive new
provisions to facilitate
the process of extracting
residences from
Companies and Trusts.
Ring
out the old
Under current legislation
dealing with tax
friendly transfers
(which governs disposals
up to 30 September
2010) a residential
property held in
a Company, Close
Corporation (‘CC’)
or Trust could only
be disposed of to
a natural person
and/or spouse who:
•
either held all
the shares/members
interest in a CC
or Company; or
• financed
all the expenditure
for a Trust to acquire
the property.
Bring
in the new
Estate planning
structures where
owners have acquired
residential properties
in Companies or
Close Corporations
with shareholding
or membership interest
held by Trusts (and
vice versa, where
the Company/CC is
a beneficiary of
the Trust that owns
the home) are now
afforded the opportunity
to unbundle the
structure so that
the end-beneficiaries
can take transfer
of the property
without attracting
CGT liability or
transfer duty.
It is a requirement,
however, that the
entity commences
with steps within
6 months after the
disposal to deregister
(in the case of
Companies and Close
Corporations) or
to be revoked (in
the case of Trusts). |
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| -------------------------------------------------------------------------------------------------------------------------------------------------------------- |
October 2010
LIMITATION ON LEASING
AGRICULTURAL LAND |
 |
Did
you know that one
cannot lease a portion
of agricultural
land for a period
of 10 years or longer,
or for the natural
lifespan of the
lessee?
This prohibition,
contained in the
Subdivision of Agricultural
Land Act, underscores
the Act’s
aim to avoid the
subdivision of arable
land into economically
unviable pieces
of land which cannot
be farmed effectively.
Contact info@hpasa.com
for any further
assistance to your
business. |
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| -------------------------------------------------------------------------------------------------------------------------------------------------------------- |
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October 2010
DEVELOPERS BEWARE RISK
OF LOSING YOUR EXCLUSIVE
USE AREA |
When a developer opens
a new sectional title
scheme, he remains a member
of the Body Corporate
until such time as all
the sections are sold
and transferred.
At this time, should any
exclusive use area still
be registered in the name
of the developer, such
exclusive use area will
automatically vest in
the Body Corporate, free
of any mortgage bond that
may have been registered
over it.
The Body Corporate may
therefore then apply to
the Registrar of Deeds
for the issuing of a Certificate
of Real Rights of Exclusive
Use in favour of the Body
Corporate, i.e. to become
the legal owner of such
exclusive use area.
Contact info@hpasa.com
for any further assistance
to your business. |
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| -------------------------------------------------------------------------------------------------------------------------------------------------------------- |
|
August 2010
SECTIONAL SCHEME AGM:
INFO MUST BE RECEIVED
BEFOREHAND |
At one time or another
during the ownership of
a unit in a Sectional
Title scheme, every owner
will speculate on what
the trustees of the scheme
have been up to in past
months. Finding out is
easier than you may have
anticipated because, in
terms of the prescribed
management rules, the
trustees are obliged to
let owners have copies
of certain informative
documents before every
AGM. These are:
| • |
the increase
schedule, which
shows what the insured
replacement values
for the whole scheme
as well as the individual
sections are; |
| • |
the annual financial
budget, which itemises
all the estimated
incomes and expenditures
for the following
financial year;
|
| • |
the audited financial
statements, giving
the accurate record
of financials and
transactions of
the past financial
year, and |
| • |
the trustees’
report, advising
on the body corporate’s
affairs over the
past financial year.
|
The management rules also
determine that you must
be given notification
of the intended AGM so
that you can arrange to
attend yourself or instruct
a proxy to attend and
vote on your behalf.
Should you require further
assistance in this regard,
kindly contact one of
our professionals.
Contact info@hpasa.com
for any further assistance
to your business. |
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|
August 2010
WAIVER OF BOND CLAUSE |
A clause in an agreement of
sale of immovable property suspending
the agreement pending bond approval
is, in the absence of an indication
to the contrary, a condition
solely for the benefit of the
purchaser and may therefore
be unilaterally waived by the
purchaser. Such waiver must
be done in writing before the
due date stipulated for bond
approval.
For assistance, contact us at
info@hpasa.com |
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August 2010
THE INSOLVENCY ACT AND HOW IT
AFFECTS YOUR SPOUSE |
 |
Did
you know that the insolvency
of one spouse, even in a marriage
out of community of property,
can affect the status of the
solvent spouse? In terms of
Section 21(1) of the Insolvency
Act the estate of the solvent
spouse will also (initially)
fall under the control of the
Curator.
The deeds office will register
an interdict against the personal
details of the solvent spouse
to the effect that the Curator
will first have to confirm that
the solvent spouse is free to
deal with his or her own estate.
This can be problematic where
the solvent spouse wants to
sell property or purchase property
in cash.
For assistance, contact us at
info@hpasa.com |
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August 2010
DECIPHERING YOUR IDENTITY NUMBER
|
Have you perhaps ever wondered
what the meaning is behind the
digits of your ID number? Deciphering
your ID number can be very interesting
and can tell you a lot more
than just the date of birth.
For example
the ID number 78 02 22 5053
083 can tell us the following:
| • |
The first 6 digits indicate
the date of birth of the
person as the 22nd of
February 1978. |
| • |
Digit 7 indicates the
gender of the person.
|
| • |
Women are indicated
by digits 0-4 and men
are indicated by the digits
5 to 9. Our example ID
number is therefore male. |
| • |
Digits 8, 9 and 10
indicate the numeric order
of registration i.e. that
the person is the 53rd
registration for that
date of birth. |
| • |
Digit 11 indicates the
citizenship of the person.
The digit 0 indicates
that the person is a SA
citizen whereas the number
1 indicates that it is
a non-SA citizen. |
| • |
Digit 12 represents
the index number 8 under
which the person’s
particulars have been
included in the population
register. Digit 13 is
merely a figure that is
generated digitally. |
|
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June 2010
JOINTLY OWNED IMMOVABLE PROPERTY
AFTER DIVORCE |
 |
If
you have acquired your ex-spouse`s
share of a previously jointly
owned property after your divorce,
be that by Court order or private
agreement, you need to submit
a written application to the
Registrar to endorse on the
Title Deed that you alone are
entitled to deal with the property.
Once the Title Deed has been
endorsed in this way, you will
be entitled to deal with the
property as if you had taken
formal transfer or cession into
your name of your former spouse`s
share of the property. |
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June 2010
CONSENTS REQUIRED FOR CERTIFICATE
OF REGISTERED TITLE |
Where a mortgaged property is being
subdivided by means of the registration
of a Certificate of Registered Title
and the intention is to release the
portion to be held by the Certificate
of Registered Title from the operation
of the bond, two separate consents
by the mortgagee are required for
lodgement.
The first consent is to the registration
of the Certificate of Registered Title
and the second consent is to the release
of the subdivided portion from the
bond.
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June 2010
DOES YOUR PARTNER HAVE A WILL?
|
The Intestate Succession Act 81 of
1987 provides that where a person
dies intestate (without a Will) and
is survived only by a spouse, such
spouse shall inherit the entire estate.
Whilst the definition of “a
spouse” includes a same sex
unmarried partner (by virtue of a
2007 Constitutional Court judgment),
it however excludes an unmarried partner
in a heterosexual relationship. Accordingly,
if a partner in a heterosexual relationship
dies without a Will, the surviving
partner will not receive any of the
deceased partner’s assets.
Partners in heterosexual relationships
are advised to provide for their partners
by executing a Will.
For assistance, speak to us at info@hpasa.com
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June 2010
CONSUMER PROTECTION ACT: GET
YOUR HOUSE IN ORDER NOW |
The ‘Consumer is King’
era introduced by the Consumer
Protection Act will soon be
effective: the first tier of
provisions will be introduced
in April this year and the second
tier in October.
All banks and mortgage originators
must be aware of the wide-ranging
implications this Act holds
for their businesses so that
they can timeously re-examine
all aspects of their documents,
marketing strategies and business
practices and adapt, where necessary.
For assistance, speak to us
at info@hpasa.com
|
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June 2010
DEFENCES THAT CANNOT BE EXCLUDED
FROM A CREDIT AGREEMENT |
In terms of the
National Credit Act, the following
common law defences may not be waived
in a credit agreement:
|
| • |
Exceptio non causa debiti
- a debtor’s defence that
there is no underlying reason
for the credit agreement. |
| • |
Exceptio errore calculi
- a debtor’s defence in
respect of errors in the calculation
of the outstanding amount. |
| • |
Exceptio non numeratae
pecuniae - a debtor’s
defence that the money has not
been paid to him. |
Please contact your attorney should
you require any further information.
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| CLOSE CORPORATIONS:
HERE TODAY, GONE TOMORROW? |
What happens when the
new Companies Act comes into operation
during the course of 2010? Are CC`s
a thing of the past?
Yes and No! The
new Act makes various changes to the
Close Corporation Act and in future
both the Close Corporations Act and
the Companies Act will regulate Close
Corporations. This means for example,
that Close Corporations will have
to prepare annual financial statements
in accordance with the provisions
of the Companies Act.
Note
also that:
| • |
The new Companies Act provides
that as from the date that it
becomes operative, no new Close
Corporations may be incorporated.
However, Close Corporations
that are in existence at that
time may continue to exist until
such time as the legislature
determines otherwise. |
| • |
Existing Close Corporations
may convert into a (new Companies
Act type) company should the
members decide to do so and
there are specific provisions
in the new Act for this purpose.
|
Should you stay or should you go?
Form a Close Corporation now during
this limited period? Or enjoy the
benefits of the New Companies Act?
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| CAPITAL GAINS TAX
LIABILITY and TAX DIRECTIVE |
If you purchase a home for
more than R2 million from a
Non-Resident Seller, you are
obliged to withhold 5% of the
purchase price and pay it to
SARS.
Similarly, if you purchase property
for more than R2 million from
a Foreign Company or Trust you
must withhold respectively 7,5%
and 10% of the purchase price
and pay it to SARS.
This `withholding tax` is for
payment of the Sellers` CGT
liability. The Non-Resident
Seller can however apply to
SARS for a directive prior to
the registration of transfer
for an amended rate of CGT,
on good cause shown. |
 |
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HIGHLIGHTS OF THE
2010/2011 BUDGET SPEECH
Minister Pravin Gordhan
delivered the 2010/2011 budget
speech on Tuesday 16th March
2010. |
We bring you the highlights:
| • |
There is no change
to the Transfer Duty
rates that are payable in respect
of property transactions. |
| • |
If you are under
65 years old, note that:
- the income tax threshold
increased from R54 200 to R57
000; and
- interest and dividend exemptions
increased from R21 000 to R22
300. |
| • |
If you are older than
65 years, note that:
- the income tax threshold increased
from R84 200 to R88 528; and
- the interest and dividend
exemptions have increased from
R30 000 to R32 000 |
| • |
From 1 September 2010 onwards,
new passenger vehicles
will be charged a carbon
emissions tax. Therefore,
the more fuel efficient your
new car is, the less tax you
will pay. |
| • |
Tax on fuel will be
increased to 25.5 cents a litre.
(This includes a 7.5 cents a
litre increase to contribute
to funding of a new petroleum
pipeline between Durban and
Gauteng and an increase of 8
cents a litre towards the Road
Accident Fund levy). |
| • |
Sin taxes are increased:
Tobacco and alcoholic products
will cost you more in the new
financial year. |
R89 billion will be spent
on social grants in 2010/2011.
| • |
Provision has been made for
the phased extension of the
child support grant up to a
child`s 18th birthday. |
| • |
Old age pension and disability
amounts are increased with R70
to R1080 a month. |
| • |
The child support grant is
increased with R10 to R250 a
month. |
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| CAVEAT
AGAINST A PROPERTY |
The deeds office notes
a caveat against a property
as a reminder to itself
and interested parties
that some other action
is required when next
the property is dealt
with in any way.
For example, sometimes
a property is re-surveyed
and the property details
may change as a result.
The Surveyor General will
then note a caveat against
the property so that when
next the property is dealt
with, the amended details
are noted in the title
deed and deeds office
database.
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| BEWARE
OF THE RISK OF MAKING
IT A PRACTICE TO
COMMUNICATE WITH
CLIENTS ONLY BY
WAY OF E-MAIL |
In a recent judgment,
the Court confirmed
that when a Bank
agrees to a mode
of communication
(in this case e-mail)
an expectation is
created that all
correspondence between
itself and a client
will be in that
mode, including
a Section 129 Notice
in terms of the
NCA. In this matter
the mortgagor fell
into arrears and
the bank sent a
Section 129 Notice
via normal mail.
Defending the action,
the mortgagor alleged
that his usual mode
of communication
with the bank was
via e-mail and that
he could therefore
rightly assume that
any legal communication
would also be delivered
to him in this way.
The Court held that
the mortgagor had
been led to believe
that all communication
with the bank would
be via e-mail. Therefore,
sending the Section
129 Notice by normal
mail may well preclude
the Bank from alleging
that the Notice
was properly delivered.
|
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| ACCRUAL
SYSTEM AND INHERITANCE
|
Many parties believe that
the accrual system as
set out in their antenuptial
contracts only plays a
role on the division of
their estates upon divorce.
The accrual system is
however also applicable
on division of their estates
upon the death of one
party. Spouses should
therefore be aware of
the effect of the accrual
system when drawing up
a will.
For example, should one
spouse bequeath his/her
estate to a family trust
or children this may require
the surviving spouse to
make an accrual payment
to the deceased’s
estate and could have
severe financial implications
for the survivor.
It is therefore important
that sound professional
advice be obtained when
drawing up a will. Speak
to one of our directors
in our Trust and Estate
Planning Department should
you wish to know more. |
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