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Thread: Land swop

  1. #1
    Junior Member
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    Mar 2012
    Kempton Park
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    Land swop


    I have a question regarding 2 entities, who has land registered in their name.

    One is a trust, the other is a (Pty) Ltd, both are registered for VAT, and the erven are similar in size.

    The entities now want to "swop" the land between the 2 of them.

    My question is, will it be regarded as a disposal, and will capital gains tax be applicable?

    Thank you.

  2. #2
    Diamond Member wynn's Avatar
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    Oct 2006
    east london
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    Find out from the transferring attorney that you both agree to use what the minimum common denominator price you can use to do the swap is, you will still have to pay transfer fees and attorney costs but if you sell one for the same price as you buy the other for there is no profit to declare and if you both agree on the lowest price there will be no capital gains tax.
    It all depends on how long each entity held the property for.
    If you intend to develop one or both properties for resale perhaps if you enter mutual builders liens whereby you each develop the others property and when you sell you pay him the agreed price for the property and you keep the difference and vice versa.
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