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Thread: Primary residence in CC

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    Gold Member Martinco's Avatar
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    Primary residence in CC

    I read in a recent article in the Rapport that there is a possibility that SARS is going to give owners of houses vested in a closed corporation the opportunity to register the property in your own name without having to pay transfer fees and capital gains tax. This is provided it is your primary residence and not your holiday home at the coast. According to Rapport this still needs to go before parliament and if approved will give the owner 2 years from beginning next year to end 2011 to do so.

    Anybody with more info on this ? And why ? Surely it will deprive SARS of millions in revenue or has it something to do with the phasing out of CCs ?
    Martin Coetzee
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    You may never know what results will come from your actions, but if you do nothing, there will be no results... Rudy Malan 05/03/2011

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    It's mostly a cleaning-up exercise - there are thousands of co's and cc's whose only asset is a residential property, i.e. dormant for all intents and purposes.

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    Site Caretaker Dave A's Avatar
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    Quote Originally Posted by Morticia View Post
    there are thousands of co's and cc's whose only asset is a residential property, i.e. dormant for all intents and purposes.
    So what's the problem with that?
    The trouble with opportunity is it normally comes dressed up as work.

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    Gold Member Martinco's Avatar
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    Quote Originally Posted by Dave A View Post
    So what's the problem with that?
    Well Dave, I would think that the number of CCs involved is clogging up their old AT desktop with the 10 Mb hard drive !

    I recently looked into selling my house and it would presently take about 250K from the income which quite frankly makes the sale not worth my while. For 250K less I cannot buy what I have.
    Martin Coetzee
    Supplier of Stainless Steel Band and Buckle and various fastening systems. Steel, Plastic, Galvanized, PET and Poly woven.
    We solve your fastening problems.
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    You may never know what results will come from your actions, but if you do nothing, there will be no results... Rudy Malan 05/03/2011

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    Site Caretaker Dave A's Avatar
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    OK - so SARS is going to give up a whole chunk of revenue because CIPRO can't cope?
    Or is it that SARS is tired of chasing annual returns on all these CC's too?

    Just to state the obvious, I don't have a problem with people being saved tax in all this - it's just the dormant CC angle as motive is... interesting.
    The trouble with opportunity is it normally comes dressed up as work.

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    There probably is some sort of a hidden agenda - how many of those property owning cc's and co's do you think belong to "people in high places"??

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    Domestic residence vs primary residence

    The draft legislation providing the relief discussed above does not use the term 'primary residence' at all.

    It refers to domestic residence, which is only defined as any residence that is used exclusively for domestic purposes.

    It also includes a definition for the companies* that the exemption will apply to.
    A ‘domestic residence company’ is any company:
    (a) the shares of which are all, from 11 February 2009 until any distribution of a domestic residence by that company directly held by a natural person; and
    (b) that holds as its sole asset a domestic residence that is and was throughout that period used as a domestic residence by that natural person;

    I therefore do not agree with the "provided it is your primary residence and not your holiday home at the coast" provision quoted above.

    As the draft legislation reads at present you can use the exemption for any house that has only been used for domestic purposes, e.g. it has not been rented out or used as a home office.


    * includes close corporations

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    Gold Member Martinco's Avatar
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    [QUOTE=taxlibrary;25507]
    I therefore do not agree with the "provided it is your primary residence and not your holiday home at the coast" provision quoted above./QUOTE]

    Thanks for putting us straight ! It shows you how some piece of information can be turned or miss understood !
    But, in the long run even better for the homeowner in this situation. Thinking about it...........the banks and lawyers are going to make some money out of this as well.
    Do you have a web page with all the info ?
    Martin Coetzee
    Supplier of Stainless Steel Band and Buckle and various fastening systems. Steel, Plastic, Galvanized, PET and Poly woven.
    We solve your fastening problems.
    www.straptite.com

    You may never know what results will come from your actions, but if you do nothing, there will be no results... Rudy Malan 05/03/2011

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    Junior Member taxlibrary's Avatar
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    The bill and explanatory memorandum is here:
    http://www.treasury.gov.za/public%20...on%20laws.aspx

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