Monthly Archives: February 2016

Capital Gains Tax and the sale of a property

A1_GTCapital Gains Tax was introduced on 1 October 2001. Capital Gains Tax is payable on the profit a seller makes when disposing of his property.

What is meant by Capital Gain?

A person’s capital gain on an asset disposed of is the amount by which the proceeds exceed the base cost of that asset.

What is base cost?

The base cost of an asset is what you paid for it, plus the expenditure. The following can be included in calculating the base cost:

  1. The costs of acquiring the property, including the purchase price, transfer costs, transfer duty and professional fees e.g. attorney’s fees and fees paid to a surveyor and auctioneer.
  2. The cost of improvements, alterations and renovations which can be proved by invoices and/or receipts.
  3. The cost of disposing of the property, e.g. advertising costs, cost of obtaining a valuation for capital gains purposes, and estate agents’ commission.

How was base cost of assets held calculated before 1 October 2001?

If the property was acquired before 1 October 2001 you may use one of the following methods to value the property:

  1. 20% x (proceeds less expenditure incurred on or after 1 October 2001).
  2. The market value of the asset as at 1 October 2001, which valuation must have been obtained before 30 September 2004.
  3. Time-apportionment base cost method. (Original cost (proceeds – original cost) x number of years held before 1 October 2001) divided by (the number of years held before 1 October 2001 number of years held after 1 October 2001).

How is Capital Gains Tax paid?

Capital Gains Tax is not a separate tax from income tax. Part of a person’s capital gain is included in his taxable income. It is then subject to normal tax. A portion of the total of the taxpayer’s capital gain less capital losses for the year is included in the taxpayer’s taxable income and taxed in terms of normal tax tables.

How is Capital Gain calculated?

If you are an individual, the first R30 000 of your total capital gain will be disregarded. Then 33.3% of the capital gain made on disposal of the property must be included in the taxable income for the year of assessment in which the property is sold. When the property is owned by a company, a close corporation or an ordinary trust, 66.6% of the capital gain must be included in their taxable income.

Primary residence and Capital Gains Tax

As from 1 March 2012 the first R2 million of any capital gain on the sale of a primary residence is exempted from Capital Gains Tax. This exemption only applies where the property is registered in the name of an individual or in the name of a special trust. The property should furthermore not exceed 2 hectares. If the property is used partially for residential and partially for business purposes, an apportionment must be done.

If more than one person holds an interest in a primary residence, the exclusion will be in proportion to the interest held by each party. For example, if you and your spouse have an equal interest in the primary residence, you will each qualify for a primary residence exclusion of R1 million. You will also be entitled to the annual exclusion, currently R30 000.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Is sjebeens wettig?

A2_GTOns weet almal van sjebeens, tog is dit ‘n digbewaarde geheim omdat dit as ‘n onwettige besigheid beskou word. Ons bespreek sjebeens en wat dit behels hieronder.

Sjebeens was township kroeë en kantiens wat hul ontstaan tydens Apartheid gehad het toe die Drankwet van 1927 Swartmense en Indiërs verbied het om alkohol te verkoop of gelisensieerde persele te betree. Ten einde ‘n inkomste te verdien, het baie Swart vroue hul gewend tot hul vroeëre vaardighede as bierbrouers. Die vroue, wat bekend geword het as “sjebeen queens”, het bier gebrou en aan trekarbeiders verkoop wat nie die westerse bier kon bekostig nie, of wat steeds die tradisionele bantoebier1 verkies het.

In 2015 bestaan sjebeens nog steeds; die sensasie daarom het egter heelwat afgeneem sedert Apartheid in 1994 tot ‘n einde gekom het en almal toegelaat is om gelisensieerde persele te betree. Dit is ook minder in die kollig noudat dit nie meer onwettig is om ‘n sjebeen te besit of daar te werk nie, solank die eienaar om ‘n lisensie aansoek doen en slegs alkohol verkoop wat wettiglik vervaardig en aan die publiek voorsien mag word.

Die Drankwet van 1989 stipuleer dat geen persoon enige konkoksie wat vervaardig is deur die fermentasie van melasse, suiker of ander bestanddele bekend as isityimiyana, hopana, qediviki, skokiaan, uhali of barberton, enige konkoksie soortgelyk daaraan of enige drankie wat van een van hierdie konkoksies gedistilleer word, mag vervaardig, besit, verbruik, verkoop, voorsien of gee aan ‘n ander persoon nie.

Dit is onwettig om alkohol te verkoop tensy u ‘n dranklisensie het wat deur die Drankraad toegestaan is. Daar is twee soorte lisensies:

  • ‘n “Binneverbruik” lisensie wat die verkoop en verbruik van alkohol op gelisensieerde persele toestaan. Hierdie soort lisensie word normaalweg aan hotelle, klubs, teaters en restaurante toegestaan. Tydelike lisensies mag ook uitgereik word om die verkoop en verbruik van alkohol by byvoorbeeld sportbyeenkomste of kermisse toe te laat. ‘n Geleentheidslisensie stel ‘n lisensiehouer in staat om alkohol na besigheidsure te verkoop.
  • ‘n “Buiteverbruik” lisensie laat die verkoop van alkohol toe wat weg van die perseel verbruik sal word. Voorbeelde van sulke persele is winkels, alkoholprodusente en drankwinkels.

Oor die algemeen sal ‘n lisensie nie toegestaan word aan enigiemand wat in die 10 jaar voor die aansoek om ‘n lisensie tronkstraf ontvang het sonder die keuse van ‘n boete nie. Oortredings van die Drankwet mag ‘n persoon ook diskwalifiseer van die verkryging van ‘n lisensie. In beide gevalle mag ‘n lisensie egter toegestaan word indien die betrokke gesagsliggaam reken dat die oortredings die aansoeker nie ongeskik maak om ‘n lisensie te besit nie.

Die Drankwet 59 van 2003 herroep die Wet van 1989 slegs in daardie provinsies wat provinsiale drankwetgewing gepromulgeer het (huidiglik Oos-Kaap en Gauteng).

Hierdie is ‘n algemene inligtingstuk en moet gevolglik nie as regs- of ander professionele advies benut word nie. Geen aanspreeklikheid kan aanvaar word vir enige foute of weglatings of enige skade of verlies wat volg uit die gebruik van enige inligting hierin vervat nie. Kontak altyd u regsadviseur vir spesifieke en toegepaste advies. (E&OE)

Dealing with marriage and estate planning

A3_GTIt is important to understand the legal implications of the marital property regime, especially when drafting a Last Will and Testament and also when entering into a marriage, as the regime chosen by the estate planner is going to affect his/her assets.

The most important forms of marriage are: marriage in community of property, marriage out of community of property (without accrual), and marriage out of community of property (with accrual).

Marriage in community of property

  1. There is no prior contractual arrangement, apart from getting married;
  2. Spouses do not have two distinct estates;
  3. There is a joint estate, with each spouse having a 50% share in each and every asset in the estate (no matter in whose name it is registered);
  4. Applies to assets acquired before the marriage and during the marriage;
  5. Should one spouse incur debts in his own name it will automatically bind his/her spouse, who will also become liable for the debt;
  6. If a sequestration takes place (in the case of insolvency), the joint estate is sequestrated.

Marriage out of community of property without the accrual system

  1. An antenuptial contract (ANC) is drawn up by an attorney (who is registered as a notary), before the marriage;
  2. Where there is no contract, the marriage is automatically in community of property;
  3. The values of each spouse’s estate on going into the marriage are stipulated in the contract;
  4. A marriage by ANC means that all property owned by spouses before the date of the marriage will remain the sole property of each spouse;
  5. Each spouse controls his/her own estate exclusively without interference from the other spouse, although each has a duty to contribute to the household expenses according to his/her means;
  6. To allow for assets acquired by spouses during the marriage to remain the sole property of each spouse, the accrual system must be specifically excluded in the ANC.

Marriage out of community of property with the accrual system

  1. The accrual system automatically applies unless expressly excluded in the antenuptial contract;
  2. The accrual system addresses the question of the growth of each spouse’s estate after the date of marriage.

ESTATE PLANNING

Donations between spouses are exempt from donations tax and estate duty.

Marriage in community of property

  1. In the event of the death of one spouse, the surviving spouse will have a claim for 50% of the value of the combined estate, thus reducing the actual value of the estate by 50%. The estate is divided after all the debts have been settled in a deceased estate (not including burial costs and estate duty, as these are the sole obligations of the deceased and not the joint estate).
  2. When drafting a Last Will and Testament, spouses married in community of property need to be aware that it is only half of any asset that he or she is able to bequeath.
  3. Upon the death of one spouse, all banking accounts are frozen (even if they are in the name of one of the spouses), which could affect liquidity.
  4. Donations or bequests to someone married in community of property can be made to exclude the community of property; in other words, if the donor stipulates that the donation must not fall into the joint estate, then the donee can build up a separate estate. However, returns on such separate assets will go back to the joint estate.

Marriage out of community of property without the accrual system

Each estate planner (spouse) retains possession of assets owned prior to the marriage.

Marriage out of community of property with the accrual system

A donation from one spouse to the other spouse is excluded from the calculation of each spouse’s accrual; in other words, the recipient does not include it in his growth and the donor’s accrual is automatically reduced by the donation amount.

DIVORCE

In the event of divorce, the marriage will be dissolved by court decree, which will address such aspects as child maintenance, access, guardianship and custody, spousal maintenance, the division of assets, division of pension interests and so on.

COHABITATION AND DEFINITION OF “SPOUSE”

Cohabitation is defined as a stable, monogamous relationship where a couple who do not wish to or cannot get married, live together as spouses. The Taxation Laws Amendment Act has extended the definition of “spouses” to include “a same sex or heterosexual union which the Commissioner is satisfied is intended to be permanent”.

Many pieces of legislation, including the Pension Funds Amendment Act and the Taxation Laws Amendment Act, now define spouse to include a partner in a cohabitative relationship, the effects of which are that cohabitees will benefit from the Section 4(q) estate duty deduction in the Estate Duty Act, and the donations tax exemptions of the Income Tax Act.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Kredietooreenkoms

A4_GTAs jy versuim om ʼn betaling te maak op ‘n kredietooreenkoms en die kredietverskaffer aksie teen jou neem, het jy, volgens artikel 129 (3)(b) in kombinasie met artikel 129 (3)(a) en 129 (4) van die Nasionale Kredietwet (“NCA”), sowel as die saak van FirstRand Bank Limited v Nomsa Nkata, tyd om die kredietooreenkoms te herstel tot en met goedere in eksekusie verkoop word.

Alvorens die Nasionale Kredietwet in werking getree het, was die standpunt rakende die reg van die verbruiker om ‘n kredietooreenkoms te herstel deur die gemene reg bepaal. Volgens hierdie beginsel sou ‘n verbruiker in staat wees om die kredietooreenkoms te herstel deur die betaling van volle bedrag geskuld aan die kredietverskaffer, tesame met die verheffing van die koste verbonde aan die wanbetaling sowel as die koste verbonde aan die toepassing van die ooreenkoms. Volgens die NKW (Nasionale Krediet Wet), kan eienaarskap en die besit van ‘n item of perseel teruggekry word deur die betaling van slegs die agterstallige bedrag op daardie datum, saam met alle ander kostes.

Die vraag ontstaan egter, wanneer is dit te laat om die bedrae wat agterstallige is in die uitvoeringsproses te betaal. Hierdie kwessie is onlangs in die saak van FirstRand Bank Limited v Nomsa Nkata aangespreek. Artikel 129 (3) en (4) van die NKW bepaal die volgende:

(3) Volgens subartikel (4) kan ‘n verbruiker;

(a) te enige tyd ’n ooreenkoms, waar die verbruiker aan wanbetaling skuldig is, herstel alvorens die kredietverskaffer die ooreenkoms kanselleer deur alle agterstallige bedrae, tesame met die kredietverskaffer se toegelate wanbetalingsadministrasiefooie en redelike koste met betrekking tot die afdwinging van die ooreenkoms te betaal tot en met die tyd van herstel; en

(b) na voldoening aan die vereistes soos daargestel in paragraaf (a), enige eiendom wat na gelang van ʼn beslagleggingsbevel deur die kredietverskaffer teruggeneem is, weer in besit neem.

(4) ‘n Verbruiker mag nie ʼn kredietooreenkoms in die volgende scenario’s herstel nie:

(a) na die verkoop van enige eiendom ooreenkomstig;

(i) ‘n beslagleggingsbevel; of

(ii) teruggawe van eiendom ingevolge artikel 127.

(b) nadat enige hofbevel wat die ooreenkoms afdwing, ten uitvoer gebring is of

(c) ná die beëindiging van die ooreenkoms soos uiteengesit in artikel 123.

Die Appèlhof het in die FirstRand Bank saak bevind dat beide die gemenereg sowel as die NKW bepaal dat, “the Rubicon has been and remains the sale in execution.” Dit beteken dat die verbruiker ten enige tyd, tydens die verkoop in eksekusie, ’n einde aan die uitvoering van die bepaalde verrigtinge kan bring en die ooreenkoms herstel deur die betaling van die agterstallige bedrag, tesame met koste.

Die rede vir die bogenoemde in die NKW was om voorsiening te maak vir die feit dat baie verbruikers geld oor ‘n lang tydperk leen, om sodoende groot aankope te finansier, soos die aankoop van ‘n huis of ‘n motorvoertuig. Dit is ook genoem in die bogenoemde uitspraak dat minder welvarende burgers gebruik maak van uitgebreide krediet om huishoudelike items en toerusting aan te koop. Daarom help die NKW verbruikers deur die opsie daar te stel om die agterstallige bedrag te betaal, eerder as om die hele bedrag van die skuld te betaal.

In die FirstRand Bank saak het die hof bevind dat artikel 129 (4)(b) slegs gebruik kan word voordat die verkoop plaasgevind het en nie daarna nie. Sodra die verkoop plaasgevind het, kan die kredietooreenkoms nie tussen die verbruiker en die kredietverskaffer herstel word nie. Indien jy jouself in die tydelike posisie vind waar jy nie in staat is om die maandelikse paaiemente van jou kredietooreenkoms te bekostig nie, maar op ‘n later stadium dit weer kan betaal en nie wil hê dat die kredietooreenkoms kanselleer word nie, dan is dit noodsaaklik dat jy die geld wat agterstallig is aan die Kredietverskaffer betaal voor die uitwinningsverkoping. As dit al gebeur het sal jy nie in staat wees om om weer die ooreenkoms daarna te herstel nie.

Bibliografie

  • Nasionale Kredietwet, 34 van 2005
  • Firstrand Bank Limited v Nomsa Nkata, (213/14) [2015] ZASCA 44 (26 March 2015)

Hierdie is ‘n algemene inligtingstuk en moet gevolglik nie as regs- of ander professionele advies benut word nie. Geen aanspreeklikheid kan aanvaar word vir enige foute of weglatings of enige skade of verlies wat volg uit die gebruik van enige inligting hierin vervat nie. Kontak altyd u regsadviseur vir spesifieke en toegepaste advies. (E&OE)