I heard an interesting story yesterday and I was wondering how valid this particular case was. This was done before CGT was introduced.

What this guy did was sell his know-how (which was sold as IP) to a newly formed company for R1mil (or something like that). He then had the company take a loan which was used to pay him for his IP. The company could then deduct the interest on the loan.

Under the new(ish) CGT laws he would have had to pay a fair chunk of tax, although it would be less than if that money was paid to himself via a salary.

Can this be done, is it a valid case? Would SARS be very unhappy when they audited the company/person?