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31 Mar 2017

Bad Bureaucrats – Threaten Them with Personal Liability

Whilst the vast majority of state officials are competent and honest, and deserving of our full support, there will always be a few “bad eggs” to contend with.

We’ve all had our run-ins with state bureaucracy, and where it causes you significant loss of any sort, ask your lawyer if you can sue.  Act quickly; a 6 month time limit applies.

Of course first prize is always to avoid the hassle and risk of litigation by motivating an obstructive official into doing his/her job properly in the first place.  And whilst threatening to go the legal route should help, there’s a problem here.  If you win, government pays your damages and legal costs.  In other words, it’s not the errant official who risks having to cough up; it’s you and I as taxpayers.

The good news is that our courts have signalled clearly that they will not tolerate the actions of that minority of state officials who seem to think that they can trample all over our constitutional rights with impunity.

How the “Social Grants Crisis” judgment helps

The Constitutional Court case around the social grants crisis finds the Social Development Minister at risk (as at date of writing) of having to pay the many millions in legal costs at stake in that case “from her own pocket”.

She has to show cause on affidavit why that shouldn’t be ordered, and it will be interesting to see what argument she advances in light of the Court’s reference to her “extraordinary conduct” and its finding that:  “The office-holder ultimately responsible for the crisis and the events that led to it is the person who holds executive political office.  It is the Minister who is required in terms of the Constitution to account to Parliament.  That is the Minister, and the Minister alone.”

Regardless of the outcome, errant state officials and their superiors have now been given an unambiguous warning by the highest court in the land – they risk personal liability for legal costs caused by their dereliction of duty.

In the High Court: The “bull in a china shop” doctor

A recent High Court decision illustrates the sort of unacceptable conduct that will expose a state official to the risk of paying costs personally –

  • A specialist radiology practice, operating in an academic hospital, obtained two interim court orders against a provincial Department of Health which had tried to close them down by removing their equipment and locking them out.
  • Disputes over the validity of a lease of equipment and over the practice’s rights to treat private as well as public patients led to litigation.
  • Whilst the litigation was still pending, two senior Departmental officials (both doctors) “decided to act as prosecutor, judge and executioner on the legal issue . . . thereby taking the law into their own hands”.
  • Much “harassment and intimidation” later, the practice’s equipment was unlawfully seized and removed by one of the officials, accompanied by a “platoon” of security guards.  In defiance of court orders the Department failed to return the equipment and prevented access to the practice.  Most alarmingly the state doctor in question, again with a platoon of security guards, was found to have intruded on a “life-threatening, intricate and complicated procedure” in an operating theatre.
  • He had, said the Court, “acted like a bull in a china shop” and is perhaps lucky that an application to have him committed to prison for 90 days for contempt of court could not be pursued.
  • And it certainly didn’t help the Department’s case that the radiologists were specialists with “rare skills” who mostly treated public patients, nor that the officials had acted in a “high-handed, arrogant and aggressive manner”, had displayed an “arrogant, foolhardy and recalcitrant attitude”, and had acted “in flagrant disregard of the laws of our country”.
  • The Court confirmed both orders against the Department with a punitive attorney and client scale costs order, but the real victory for the public lies in the Court’s clear indication that – had it been asked to do so – it would have ordered the errant officials to pay the legal costs personally.

So the next time a “bad egg” bureaucrat abuses your rights…

When you bump heads with one of the “bad eggs” try this – have your lawyer formally warn him/her (and their superiors) that you will do everything you can to hold them personally liable for all your costs.  Our courts are behind you!

31 Mar 2017

Religious Discrimination in the Workplace

Another warning to employers to pro-actively avoid any form of unfair discrimination comes from a Labour Court’s award of compensation to an employee found to have been discriminated against because of her religion.

Discrimination and automatic unfairness

The Labour Relations Act (LRA) renders dismissal automatically unfair if the reason for dismissal is – amongst others – discrimination, direct or indirect, “on any arbitrary ground, including, but not limited to race, gender, sex, ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience, belief, political opinion, culture, language, marital status or family responsibility.”

However “a dismissal may be fair if the reason for dismissal is based on an inherent requirement of the particular job”.

Forced to work on the Sabbath

A company manager refused to participate in stock-taking on Saturdays because as a Seventh-day Adventist she was unable to work on a “Sabbath” (Friday sunset to Saturday sunset).

She had however participated in stock-taking on other days, she had worked overtime outside the Sabbath, and her employer was generally satisfied with her work.

A senior manager had been derogatory in public about her religious affiliation.

Although her contract of employment obliged her to work overtime as and when necessary, it did not specify that stock-takes were scheduled for Saturdays nor that she was to work overtime on Saturdays.

She was awarded compensation of R60,000 for unfair discrimination, the Court dismissing the employer’s defences that the dismissal was based on incapacity rather than religious discrimination, that Saturday stock-takes were an essential requirement of the job itself, and that the employee’s dignity had not been impaired because the senior manager’s abuse was a once-off event.

31 Mar 2017

Property: What Are Your Rights to Views and Privacy

“Diligence is the mother of good fortune” (Miguel de Cervantes)

Another warning to do your homework before you buy or develop property comes from a recent High Court decision to set aside a municipality’s approval of building plans.

From sea-view balconies to walled-in courtyards

  • A 17-storey inner city building incorporated residential apartments on its higher floors, the municipality having passed plans for several apartments to be constructed with balconies or windows overlooking the common boundary with a neighbouring building.  Some of these apartments provided city and sea views over the top of that building.
  • Subsequently the developers of the neighbouring building obtained municipal authority to build several levels upwards, flush against the common boundary, right up against those apartments with balconies and only 3 metres from those apartments with windows.
  • The effect of the added levels would have been “to change the character of the areas that were designed to be balconies into small courtyards confined between towering walls”.
  • When they realised what was happening the affected apartment owners, who had not been given notice of the building plan application, rushed to court and obtained an interdict to stop construction pending a judicial review of the plan approval.
  • On review, the Court set aside the approval of the building plans and ordered the municipality to reconsider them.  In other words, Round 1 goes to the apartment owners, but the jury is still out on whether they or the neighbouring developer will ultimately emerge as the victors here.

Lessons for buyers:  Legal restrictions and “legitimate expectations”

Note that this case, as the Court put it, was “not about any alleged right to a view.  It arises out of allegations concerning what the applicants contend would be the unduly intrusive and objectionable character of an aspect of the building extension”.

What follows is a very simplified summary of a very complicated subject, not helped by some very divergent court decisions in the past.   So take full legal advice on your particular circumstances.  But work on the basis that you have no automatic entitlement to retain amenities like privacy, access to light, views and the like, so to stop your neighbour from building to your prejudice you will generally have to prove either –

  • That the building is in contravention of a legal restriction – think title deed conditions, town planning/zoning/building restrictions and the like; or
  • That the building, although complying with all legal restrictions, is “so unattractive or intrusive that it exceeds the legitimate expectations of the parties”.

What won this round for the apartment owners was the Court’s finding that the municipal officials had, through a misunderstanding of the law, “failed to consider and address the question whether a reasonable and informed purchaser ….. would foresee that the regulating authority, having approved balconies along the common boundary would permit the development of the adjoining erf in such a manner as to effectively destroy the utility of the balconies as such, and with the degree of overbearing intrusiveness that allowing a three storey solid wall to be built up hard against them would unavoidably occasion.”

That was a close shave for the apartment owners, so the important thing is to do your due diligence before buying a property.  Factor in that your neighbour may in the future decide to take full advantage of his/her rights to develop and build, and if that happens you will find it difficult to complain.  In this case for example the apartment owners “might reasonably have expected the views from those apartments to be blocked by future development ….. if regard were had to what was permitted in terms of the applicable zoning scheme regulations”.

A lesson for developers

Although generally it should be enough that your proposed new construction/development complies with all “legal restrictions”, there are exceptions.  Make no assumptions here; they could be both mistaken and expensive.

29 Mar 2017

Regulation of Agricultural Land Holdings Bill

WHITE FARMERS AND FOREIGNERS IN THE FIRING LINE OF THE GOVERNMENT’S FIRST SALVO OF RADICAL ECONOMIC TRANSFORMATION

“WHEREAS there is a need to redistribute agricultural land more equally by race and class, raise agricultural output and food security and to advance social justice and political stability by obtaining agricultural land to support and promote productive employment and income to poor and efficient small scale farmers”

This is how the Bill starts! One could of course spend forever analyzing and debating all the assumptions set out above but that would be for another day. Let me rather take you forward and highlight some of the major components of the Bill.

  1. Establishment of a Land Commission. As if we don’t have enough government departments and expenditure the government is going to create yet another department which will no doubt be staffed by an endless number of grossly overpaid ANC cadres. The purpose of the land commission is to administer the Act which will flow from this Bill. This includes the obligation to create a register of all agricultural land. Whether the commission will have the technical ability to administer such a register efficiently and accurately remains to be seen. It is equivalent to trying to recreate a significant portion of our existing Deeds Registry. A monumental task! Recent disastrous efforts by government to create less complicated registers in other sectors entitle one to be cynical. Some politically connected service provider is no doubt licking his chops!
  2. Restrictions on Foreigners. Foreigners (who are defined as someone who is not a citizen; whose continued presence in South Africa is subject to a limitation as to time imposed by law; or not ordinarily resident in South Africa) will as of the date of this Bill becoming law, not be permitted to purchase agricultural land. They will only be allowed to enter into long leases in respect of the land. Long leases must be for a minimum period of 30 years or for the lifetime of the lessee with a maximum period of 50 years. Foreigners who already own land will not be obliged to dispose of the land but when they decide to do so they are obliged to first offer it for sale to the government.
  3. Disclosure of present ownership. Every owner of agricultural land (foreigners and locals alike) will be required to submit a form to the land commission within 12 months from date of commencement of the law providing prescribed information relating to their land. Such information must include the race, gender and nationality of the owner; the size and use of the agricultural land and any real right registered against and licence allocated to the agricultural land holdings. Foreigners are politely excused from a racial interrogation! This is reserved for locals only.
  4. Ceilings for agricultural land holdings. The government will set limits on how much agricultural land any one person may own. This will probably be done regionally. In setting the limit, the government should give consideration to amongst other factors land capability; capital requirements; expected household income; annual turnover and the relationship between product prices and price margins. Any land owned by anyone in excess of the ceiling set by the government will constitute “Redistribution Agricultural Land”. A better term would have been “distributable agricultural land”. Such land will be discussed in the next item. Before proceeding I think it is important to note that this portion of the legislation is probably the most provocative and “radical”. Whether it will be found to be Constitutional remains to be seen. At the end of the day one is driven to ask why it is necessary to set such a ceiling. The government already has the power to expropriate land for purposes of redistribution, when it wants to and limiting the power and privilege of a white person to own more than one farm or a farm larger in size than what the government deems to be reasonable, seems pointless and in fact somewhat vindictive. My biggest fear is that the government (as it is inclined to do) will get it wrong and set the ceilings incorrectly. Such an error will destroy our commercial farming industry and affect our ability to feed ourselves and export of produce.
  5. Redistribution Agricultural Land. After the government prescribes the ceiling for agricultural land ownership and as discussed in the previous paragraph the excess land is described as Redistribution Agricultural Land. The owner of such land is then obliged to inform the commission of the identity of that land and thereafter obliged within periods set by the government to offer it for sale (at a price set by the owner) to black people. If no black person buys the land within a given period, the government must purchase the land. If the government and the owner cannot agree on price, then the government will use the Expropriation Act and its procedures to expropriate the land and resolve the matter of price. This is another radical portion of the legislation. The question which needs to be asked and answered is where on earth the government will find the money to buy all the “Redistribution Agricultural Land” in one go. Perhaps the answer lies in the fact that our government intends to amend our Constitution and remove the obligation to pay compensation for expropriated land. There’s been much “talk” in the media by members of our government on this topic recently including a speech made by our president. Time will tell but one thing is clear, radical times lie ahead!

Milton Koumbatis
Director

07 Mar 2017

Withholding Tax for Non Resident Sellers

Withholding tax is an amount that must be deducted, by the buyer of a property, from the purchase amount paid to the seller, which the buyer must then pay to SARS.

Withholding tax is a government requirement and an attempt to prevent tax evasion, especially in the case of property sales by non-residents that are not liable for South African Income Tax.

This tax serves as an advance payment towards the final income tax liability, to Sars, by the seller.

If a non-resident sells a property for more that R2 Million, then 7.5% of the selling price needs to be paid over to SARS according to section 35A

You might not know, but if a non-resident holds 20% or more of the shareholding of a South African Company (or CC) then 10% needs to be withheld as a “provisional capital gains tax payment”.

TAX DIRECTIVE

The seller may apply to the Commissioner at SARS that no amount or the reduced amount be withheld by the purchaser (section 35A(2))

Section 35A(3) provides that the amount withheld from payment to the seller is an advance towards his normal tax liability for the year of assessment during which the property is disposed by him.

07 Mar 2017

WHAT DOES IT MEAN TO BE IN POSSESSION OF “A VALID FFC” IF YOU LEAVE ONE AGENCY TO JOIN ANOTHER?

We have recently received a number of enquiries from agents and principals alike, wanting to know what happens when they leave one agency to join another:

Can one legally earn commission whilst waiting for a new FFC under the name of the new employer?

The regulations dealing with FFCs state that if a FFC was issued to an agent and such agent ceases to be employed by the same agency, the agency shall, within fourteen (14) days of such agent ceasing to be in its employ return such certificate to the Board. It is implied that the Board will be informed of the new employer of the agent concerned and that a replacement FFC will then be issued.

It is important to note that no additional payment to the Board is required for this replacement FFC.

The question which is effectively asked and is needing an answer, is whether the regulations referred to above mean that when an agent leaves the employ of an agency, the FFC issued to the departing agent loses its validity.

This is an important question to answer, as Sections 26 and 34A of the Estate Agency Affairs Act cumulatively and effectively prohibit anyone performing the duties of an estate agent or collecting commission if a “valid” FFC has not been “issued” to them.

We believe that the FFC does not lose its validity and that the agent to whom it was originally issued can still legitimately trade. We base this opinion on the decision in the Supreme Court of Appeal matter of RONSTAN INVESTMENTS v LITTLEWOOD 2001.

In this court case, the court observed that the true purpose of Sections 26 and 34A was to ensure that only qualified persons and only those who had paid for the benefit of being insured by the Estate Agents Fidelity Fund could trade as estate agents. With this background, the court quite sensibly found that an FFC, once issued, was valid for the entire year of issue. Put another way, “a certificate is a certificate” and it does not matter where the agent chooses to work from time to time.

We also point out that the legislature in Section 28 of the Estate Agency Affairs Act dealt with the circumstances under which FFC’s can be withdrawn or when they will lapse. If the Regulations dealing with the return of an FFC to the Board were intended to cause the FFC to be withdrawn or to lapse, the legislature could and should have said so in Section 28; it didn’t and this supports our view.

In conclusion then, it is our view that failure to return the FFC for amendment, or, after having returned it and not yet being in receipt of a replacement one, does not prohibit an agent from continuing to work and earn commission. It might result in disciplinary steps being taken by the Board – but this has nothing to do with the fact that the agent has been issued with an FFC for that year.

Robert Krautkrämer

07 Mar 2017

VAT and Property

The tax authorities levy a tax on transfers of immovable property either in the form of VAT or transfer duty. It is not always clear in which cases VAT and in which transfer duty will be payable.

The question arises as to which is payable : VAT or Transfer Duty?

The answer will depend on the nature of the particular transaction and the status of the parties. If a person is registered for VAT, such a person is called a VAT VENDOR. He, she or it is then obliged to levy a premium of 14% on every sale /service rendered in his business and to pay this premium (called “VAT OUTPUT TAX”) over to the Receiver at the end of the relevant VAT cycle.

To determine whether VAT is payable in a property transaction, we need to ask 2 questions, namely:

  • Is the seller registered (or obliged to be registered) for VAT, and
  • Is this transaction in the course and furtherance of the seller’s business?

If the answer to both questions is yes, VAT related questions should be asked (VAT will likely be payable). If the answer is no, transfer duty will be payable on the transaction.

For example: If A, who sells a house for R600 000,00 to B and A is a property developer whose business it is to build and sell houses, and the house he is selling to B is sold in the scope and furtherance of his business, then, provided he is also a VAT vendor, VAT will be payable by him in the transaction and not transfer duty. However, if A sold his private residence (not a house he built with the intention of selling it), it is not part of his business. Even if he is a registered VAT vendor, in this case he is not a vendor for purposes of this transaction. Transfer duty will therefore be payable, not VAT.

It is important to note that, in transactions where VAT is payable, the Receiver demands the amount due from the SELLER, not from the purchaser.

The seller must therefore ensure that the sale price he negotiates includes the 14% VAT, alternatively he must expressly arrange with the purchaser that the purchaser will, in addition to the purchase price, also be liable to pay to the seller an additional 14%.

The ultimate responsibility to pay the Receiver vests with the seller, and he cannot pass this responsibility on to the purchaser. In the case of transfer duty being payable, the purchaser (unless the parties agree otherwise) is liable, in addition to the purchase price, to pay the amount of transfer duty due. This amount is usually paid over to the conveyancer, who then ensures that the transfer duty is paid to the Receiver and a transfer duty receipt (which must be lodged in the deeds office) is obtained.

If it has been established that the seller is:

  • a VAT VENDOR;
  • for purposes of THIS transaction (in other words, he is selling the property as part of his business);

then VAT is usually payable.

From a property point of view, there is only one type of transaction which has VAT exempt status: property that has previously been leased for residential purposes, and which property is now being sold.

For example:
C is a property developer and a registered VAT vendor. His business is to buy and sell property and also to lease property. Amongst other assets, he owns a flat which he rents out for residential purposes. Although C, the lessor, is a VAT vendor, VAT is not levied on the rental income derived from the flat. The reason for this is that rental derived from residential tenants such as in this example, is an exempt supply in terms of the Act.

Not only is the rental of a property let out for residential purposes exempt from VAT, but the purchase price derived from a subsequent sale of the rental property itself is also exempt from VAT.

So, notwithstanding the fact that he is a VAT vendor, if C sells the property which he previously let out for residential purposes, no VAT will be payable by the seller.

The purchaser of the flat will however be liable for transfer duty on the acquisition.

If a transaction is not VAT exempt, the next question to ask is whether the transaction is perhaps zero rated.

“Zero rated” means that VAT is payable on the transaction, but at the rate of 0%, not at the standard rate (currently 14%).
What is the difference between zero rating and VAT exempt? IF a transaction is VAT exempt, it falls outside of the “VAT net” altogether.

Accordingly transfer duty is payable and the position with regard to the particular transaction is the same as if the seller were never registered for VAT. If a transaction is zero rated, it still falls within the “VAT net” and all the provisions relating to VAT applies to the transaction, including the provision that the purchaser can still claim input tax credits in respect of the property concerned.

IN ORDER FOR A TRANSACTION TO BE ZERO RATED, THE FOLLOWING REQUIREMENTS HAVE TO BE MET :

  • The seller must be a VAT vendor;
  • The purchaser must be a VAT vendor;
  • The thing that is sold must be a going concern (in other words, an existing, operating business);
  • The agreement of sale must expressly state that a going concern (as opposed to merely an asset) is being sold.

Examples of transactions relating to property that will qualify for a zero rating are:

  • Mr X sells his grocery store – he sells both the business and the building in which the shop is situated as part of the same transaction to the same purchaser.
  • Mrs Y sells an office block owned by her. The offices are let out to various tenants and she effectively “sells” (cedes) the leases together with the building. The new purchaser will thus continue to derive rental income from the building.

It must be highlighted that unless there is a written agreement between the parties specifically stating that the enterprise is disposed of as a going concern, the zero rating cannot apply even if the transfer meets the requirements of a going concern.

Should this be the case however, the VAT Act does make provision for the parties to enter into a separate agreement with the original agreement with the separate agreement referring to the disposal of an enterprise as a going concern.

The contracting parties have to agree in writing that the enterprise will be supplied as an income-earning activity. Notwithstanding the latter, the mere mention of the words “Income Earning Activity” will prove to be insufficient in certain instances.

In the event of an Agreement of Sale that specifically states that a vacant building is disposed of as a going concern, the zero rate will not apply as the supply of a vacant building cannot constitute an income earning activity.

It will therefore prove to be insufficient to merely make mention of the words “Income Earning Activity” and “Going Concern” in the Agreement of Sale if the object of sale is not capable of being an income earning activity.

Should it then subsequently be found that an enterprise was not disposed of as a going concern, the purchase price has to be adjusted accordingly and the amount of VAT paid will be claimed as input tax by the purchaser and accounted for as output tax on the part of the Seller.

Where a purchaser proposes to be a registered vendor and it was subsequently found on date of supply that he was not registered as such, the Receiver will then require the Seller to pay over VAT on the proceeds of this transaction as for purposes of the Receiver the purchase price includes VAT.

It is therefore vital that the Agreement of Sale make provision for the protection of the Seller and it is suggested that a clause along the following lines can form part of the Agreement of Sale as a precautionary measure:

“The Purchaser will deliver to the Seller a copy of the Purchaser’s VAT 103 Notice of Registration form (within a specified amount of time). In the event of the Purchaser not being a registered vendor at the time of conclusion of this Agreement, the application of the zero rate will be subject to the Purchaser being a registered vendor on date of supply. It is further recorded by the parties that if VAT is payable on the transaction the amount of VAT so claimed will be refunded to the Seller by the Purchaser”.

If the PURCHASER is a VAT vendor and TRANSFER DUTY is payable in a transaction, then the purchaser could qualify for a notional input tax credit (i.e. a deemed input tax credit).

In other words, the purchaser could claim the TRANSFER DUTY that it paid on the transaction back from the Receiver, as if the amount were VAT paid by the purchaser on the acquisition. The VAT status of the purchaser is not relevant in determining whether VAT or transfer duty is payable in any transaction. It is only relevant to determine whether the purchaser will be so fortunate as to be able to claim his transfer duty back from the Receiver.

By Lisa Moore

07 Mar 2017

Capital Gains Tax (CGT)

Capital gains tax (CGT) was introduced in South Africa with effect from 1 October 2001 and applies to the disposal of an asset on or after that date.

Capital gains and capital losses made on the disposal of assets are subject to CGT unless excluded by specific provisions. CGT is not a separate tax but forms part of income tax. The relevant legislation is contained in the Eighth Schedule to the Income Tax Act 58 of 1962. Capital gains are taxed at a lower effective tax rate than ordinary income.

Who is it for?

CGT applies to individuals, trusts and companies. Since CGT forms part of the income tax system, you must simply declare your capital gains and losses in your annual income tax return.

A resident, as defined in the Income Tax Act 58 of 1962, is liable for CGT on assets located both in and outside South Africa.

A non-resident is liable to CGT only on immovable property in South Africa or assets of a “permanent establishment” (branch) in South Africa. Certain indirect interests in immovable property such as shares in a property company are deemed to be immovable property.

Should you sell your primary residence (registered in your own personal name) and the capital gain exceeds R2 Million, it may be beneficial to contact your tax consultant to ensure that you will be left with the highest possible gain after having paid the South African Revenue Services

How to calculate:
The Capital gain = Selling Price – Base Cost

Where the base cost includes ORIGINAL COST =TRANSFER DUTY + TRANSFER FEES + IMPROVEMENTS + SELLING COST

Where selling cost INCLUDES = ESTATE AGENTS COMMISSION + BOND CANCELLATION FEES + CERTIFICATES OF COMPLIANCE

Improvement cost INCLUDES = ALL ADDITIONS OVER THE YEARS SUCH AS ALTERATIONS, IMPROVEMENTS, ALARM SYSTEMS, NEW PLANTS, PAVING ETC

In addition, if you decide to put your property in the market and aim for a higher selling price by doing painting and repairs before selling, SARS allow for these costs to be deducted as improvements.

What is a primary residence?

  • A residence must meet certain basic requirements before it can qualify as a primary residence (Paragraph 44 of the Eighth Schedule).
  • It must be a structure, including a boat, caravan or mobile home, which is used as a place of residence by an individual.
  • An individual or special trust must own an interest in the residence.
  • The individual with an interest in the residence, beneficiary of the special trust, or spouse of that person or beneficiary must ordinarily reside in the home and use it mainly for domestic purposes as his or her ordinary residence.

The primary residence exclusion also applies to the land on which the primary residence is situated, including unconsolidated adjacent land if the following conditions are met:

  • The exclusion only applies to a maximum of two hectares.
  • The land must be used mainly for domestic or private purposes together with the residence.
  • The residence must be disposed of at the same time and to the same person as the land on which it is situated.

Most primary residences will not be subject to CGT because:

  • The first R2 million of any capital gain or loss on the sale is disregarded for CGT purposes. This exclusion means that you need to make a capital gain of more than R2 million in order to be subject to CGT

Exclusions and Rebates

  • Annual exclusion
    • Natural persons and special trusts R40 000
    • Natural persons in the year of death R300 000

 

INCLUSION RATE FOR 2021/22 TAX YEAR MAXIMUM EFFECTIVE RATE FOR 2021/22 TAX YEAR
Natural Person 40% 18%
Special Trust 40% 18%
Company 80% 22.40%
Trust 80% 36%

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