Monthly Archives: October 2017

The basics of Estate Duty

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B4When a person dies, they leave behind an estate which includes everything they own. Estate Duty is payable on the estate of every person who dies and whose nett estate is in excess of R3,5 million. It is charged at the rate of 20%. Currently, SARS is responsible for collecting the Estate Duty of a deceased person.

How does an estate get reported to SARS?

Even if Estate Duty does not apply to you, it is still necessary to inform SARS that the person is deceased. It is recommended that you consult with a legal expert when going through such as process.

Copies of the following documents must be sent to SARS:

  1. Death certificate or death notice.
  2. Identity document of the deceased.
  3. Letters of Executorship (J238) (if applicable).
  4. Letter of Authority (J170) (in cases where the estate is less than R250 000).
  5. Certified copy of the executor’s identity document.
  6. Power of attorney (if applicable).
  7. The name, address and contact details of the executor or agent.
  8. The last Will and Testament of the deceased.
  9. An inventory of the deceased’s assets.
  10. The liquidation and distribution accounts (if available).

These documents may be sent to the relevant Centralised Processing Centres that is closest to the Master of the High Court where the estate is being administered.

How does Estate Duty work in relation to an inheritance?

All income received or accrued before the deceased’s death is taxable in the hands of the deceased up until the date of death, and will be administered by the executor or administrator acting as the deceased’s representative taxpayer.

  1. After the date of death of a person, a new taxable entity comes into existence – the “estate”.
  2. The assets of the deceased will be held by the estate until the liquidation and distribution account has lain for inspection and become final under section 35(12) of the Administration of Estates Act after which the assets will be either handed over to the heirs or delivered to the trustee of a trust estate.

References:

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)

New requirements to re-instate a company or close corporation

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B3A company or close corporation may be deregistered upon request from the company or close corporation or any other third party. A company or close corporation may also be re-instated. However, since the withdrawal of Practice Note 6 of 2008, and its replacement with Notice 08 of 2017, there are new requirements for the re-instatement.

The Practice Note is issued in terms of Regulation 4(2)(b) of the Companies Regulations, 2011, and is applicable to the re-instatement of companies and close corporations in terms of Companies Regulation 40(6) and (7).

What are the new requirements?

Since December 2016, to re-instate a company or close corporation, the re-instatement application on a form CoR40.5 must comply with the following requirements regardless of the cause or date of deregistration:

  • Certified identity copy of the applicant;
  • Certified identity copy of the owner of the customer code;
  • Multiple deed search (deed search of each of the 10 regional deeds offices);
  • Letter from the Department of Public Works, only if the multiple deed search reflects immovable property;
  • Sufficient documentary proof indicating that the company or close corporation was in business or that it had any outstanding assets or liabilities, at the time of deregistration;
  • Mandate from the applicant confirming that the customer may submit on his/her behalf.

When can a company or close corporation be re-instated?

CIPC will only consider re-instating a company or close corporation if it can provide proof that it was conducting business at the time of deregistration, or has any other economic value. Furthermore, upon the successful processing of the re-instatement application, all outstanding annual returns must be filed in order to complete the process, within 30 business days from date of the re-instatement.

Reference:

  • Companies and Intellectual Property Commission | CIPC. Practice Note 08 of 2017, Requirements for re-instatement in terms of Regulations 4(2)(b).

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).

What is a title deed?

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B2If you are planning to buy a new property, you will need to get the title deed transferred into your name to prove that you are the owner of the property. You will need the assistance of a lawyer specialising in property transfers (also known as a conveyancer) to help you transfer the title deed into your name.

You will only become the owner of the property when the Registrar of Deeds signs the transfer. After it has been signed, a copy of the title deed is kept at the Deeds Office closest to you.

A Title Deed is documentary proof of ownership in terms of the Deeds Registries Act 47 of 1937. Each property has its own separate Title Deed. It is an important document containing all the details pertaining to a particular property.

These details are:

  • The name of the existing owner as well as the previous owners.
  • A detailed property description which includes size.
  • The purchase price of the property paid by the existing owner.
  • Conditions applicable to the zoning, use and sale of the land.
  • All real rights registered in respect of the property.

The owner will normally have the Title Deed or a copy thereof in his possession. Before signing an offer to purchase carefully scrutinize the Title Deed.

What is The Deeds Office and The Deeds Registry?

There are numerous Deeds Offices throughout South Africa. Each Deeds Office holds a Deeds Registry, containing filed Title Deeds of all the properties in its particular jurisdiction. All the Deeds Registries are linked to a computer network. Your estate agent can, via a computer-linked facility from his office, examine any Title Deed (registered from 1980) in the country’s combined Deeds Registry.

What’s the Difference Between a Property Deed and a Title?

Title is the legal way of saying you own a right to something. For real estate purposes, title refers to ownership of the property, meaning that you have the rights to use that property. It may be a partial interest in the property or it may be the full. However, because you have title, you can access the land and potentially modify it as you see fit. Title also means that you can transfer that interest or portion that you own to others. However, you can never legally transfer more than you own. Deeds, on the other hand, are actually the legal documents that transfer title from one person to another. Sometimes the Deed is referred to as the vehicle of the property interest transfer.

References

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)

What is the sale agreement?

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B1Whenever you buy or sell a house you will encounter the sale agreement, which is also called an “offer to purchase”. This is a contract between a buyer and seller and covers the terms and conditions governing the sale of the property. Buying or selling a house can be stressful and sometimes confusing, however, the sale agreement doesn’t have to be.

An agreement of sale is a written agreement signed by both the buyer and the seller (and also by the seller’s spouse if he’s married or subject to the laws of a foreign country), whereas an offer to purchase may be either oral or written. If it’s in writing and signed by the buyer and accepted by the seller, an offer to purchase constitutes a binding agreement of sale, whereas an oral offer isn’t binding.

What should a sale agreement include?

These are a few things a sale agreement should include:

  • The names, identity numbers and marital status of all the parties.
  • The buyer’s address.
  • Description and size of the property as detailed in your deed of transfer.
  • The selling price and whether a deposit will be payable. If so, the deposit money will be held in the trust account by the transferring attorney.
  • A provision that the buyer pays all transfer and bond costs.
  • The name of the attorney handling the transfer.
  • The date of taking possession and occupation.
  • The provision that the buyer is responsible for all taxes and other municipal charges from the day of taking possession.

Who is responsible for the sale agreement?

The agreement, or contract, is usually an offer by the interested buyer. The buyer presents the offer to the owner of the property, who will accept it by signing it. This forms a binding contract. It is necessary to always consult a property lawyer who can assist you in a sale agreement.

References

  • Anderson, AM. Dodd, A. Roos, MC. 2012. “Everyone’s Guide to South African Law. Third Edition”. Zebra Press.
  • Legalwise.co.za

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)