Archives: General Interests & News Flashes

What is it?

Transfer Duty is a tax levied on the value of any property acquired by any person by way of a transaction or in any other way. For the purpose of Transfer Duty, property means land and fixtures and includes real rights in land, rights to minerals, a share or interest in a “residential property company” or a share in a share-block company.

These are the Transfer Duty rates applied to properties acquired on or after 1 March 2017, and apply to all persons (including Companies, Close Corporations and Trusts):

Who pays Transfer Duty?

• For acquisitions:
  • The person acquiring the property
• For renunciations:
  • The person in whose favour or for whose benefit, any interest in or restriction upon the use or disposal of property has been renounced.

Should supporting documents be required, it will be requested of the Conveyancer to upload such electronically. Once satisfied, the application will be approved. If no payment is required, the system will automatically release the receipt after approval.

Should a payment be required, the Conveyancer will make such electronically after which the receipt will be issued.

The usual turnaround time for transfer duty applications to be processed is between 5 and 10 working days.

It is advised that all parties ensure their tax affairs are in order as property transfers are used in an attempt to ensure tax compliance across all taxes. If, for example, you are not registered or you have outstanding tax returns or payments, you will be given the opportunity to correct matters with SARS. Should matters not be resolved, steps will be taken to ensure compliance and this may delay the transfer of the property. One such step that may be taken is the appointment of the Conveyancer or any other person as an agent with the instruction to pay SARS from the proceeds of the sale. It is further recommended that you ensure that your personal details (ID number, Income Tax/VAT number) on our systems are correct as any disparity could also cause delays.

A taxable supply is a supply on which VAT must be charged at the standard rate (currently 14%) or at the zero rate. To be a taxable supply, the supplier (seller or transferor) must be a “vendor” and the supply of the property must be in the course or furtherance of an “enterprise.”

The supply of an entire enterprise with all its assets (including any fixed property) as a “going concern” may qualify as a zero-rated taxable supply if all the conditions in section 11(1)(e) of the VAT Act are met. Refer to Interpretation Note 57: Sale of an enterprise or part thereof as a going concern and VAT News 15 – August 2000 for more details in this regard.

When should it be paid?

Duty is payable within six (6) months from the date of acquisition. If the Transfer Duty is not paid within this period, interest calculated at 10% per annum for each completed month. A completed month is calculated as the first day from the expiry of the interest free 6 months period to the date of payment.

Interest will be charged at the “prescribed rate”. However, these specific provisions did not come into effect from

1 October 2012 when the Tax Administration Act became effective, but will come into effect way of Presidential Proclamation in the Government Gazette at a later date.
Remember that in the case of conditional sales the period of 6 months commences from the date on which the transaction was entered into (i.e. the last date of party signature to the agreement), and not the date when the contract becomes binding upon the parties (i.e. the date the conditions are fulfilled.)

What constitutes “property” for the purpose of Transfer Duty?

Property includes:

• Land and fixtures;
• Real rights in land, excluding rights under mortgage bonds or leases;
• Rights to minerals or rights to mine for minerals including leases or sub-leases to mine for minerals;
• A share or interest in a “residential property company”;
• A contingent right to residential property or a share or member’s interest in a “residential property company” held by a discretionary trust (not a special trust), where the acquisition of the right is in consequence of an agreement for consideration in relation to property held by that trust; or accompanied by a change in the debt or security structure of the trust; or accompanied by a change in the trust’s trustees; and
• A share in a share block company

by Lisa Moore

There are many bridges yet to be crossed in our journey from crude and legalised racism to a new order where social cohesion, equality and the effortless observance of the right to dignity is a practical reality (from the judgment below)

Our highest Court recently provided very strong confirmation that employers have both a right and a duty to stamp out racism in the workplace.

No “mollycoddling” for using the k-word

• A SARS official used the k-word during an argument with his manager
• He admitted it at a disciplinary hearing and was given a final written warning valid for six months, a suspension without pay for ten days, and a referral for counselling
• When the SARS Commissioner changed that to outright dismissal, the employee challenged his dismissal in the CCMA, which ordered his reinstatement. Both the Labour Court and the Labour Appeal Court upheld the reinstatement and eventually SARS took the matter on appeal to the Constitutional Court
• Finding that dismissal rather than reinstatement was the appropriate sanction, and thus upholding the appeal, the Court issued a strong message on the dangers of racism in the workplace: “The use of this term captures the heartland of racism, its contemptuous disregard and calculated dignity-nullifying effect on others. It bears repetition that [the employee’s] utterances constitute a racial minefield in the workplace ever-ready to explode at the slightest provocation. Conduct of this kind needs to be visited with a fair and just but very firm response by this and other courts as custodians of our constitutional democracy, if we ever hope to arrest or eliminate racism. Mollycoddling cannot cut it.”

Why not reinstatement?

There is a clear signal in this judgment to both employers and employees that in serious cases of racist behaviour, it won’t be easy to convince a court that reinstatement is appropriate:  “Where such injurious disregard for human dignity and racial hatred is spewed by an employee against his colleagues in a workplace” held the Court, “that ordinarily renders the relationship between the employee and the employer intolerable”.

Clearly therefore, serious offenders should generally expect the ultimate sanction of full dismissal.

Employers – procedural blunders will cost you

No matter how good a case you have against an employee for his/her dismissal, remember that not only must a dismissal be substantively fair, it must also be procedurally fair.  As the Court in this case put it “… the sanction of dismissal is so livelihood-threatening and serious that a breach of the relevant regulatory framework ought generally to be viewed in a serious light.”

So, because SARS had exposed the employee to avoidable litigation costs through a series of blunders in the way it handled the dismissal process, and despite the seriousness of the employee’s offence, the Court awarded him six months’ salary as compensation.

Good name in man and woman … is the immediate jewel of their souls. Who steals my purse steals trash … but he that filches from me my good name robs me of that which not enriches him,
and makes me poor indeed – (Shakespeare)

Our laws of defamation are there to help you protect your good name from unlawful attack, and a recent High Court judgment about a defamatory Facebook post is a pertinent reminder of how this protection applies online as well as in the real world.

Neighbours, noisy chickens, smelly rabbits, and a “peeping tom” slur

• H and B are neighbours in a residential estate.
• They argued over complaints which H lodged with the Body Corporate over B’s noisy chickens. Later, when B replaced the chickens with rabbits, H complained about their smell.
  B retaliated by publishing a statement on Facebook starting a smear campaign against H, accusing him of being a peeping tom, “a perverse neighbour, an idiot and an ugly piece of *^%&”.
  This Facebook message, which identified H by name, mentioned his place of residence and had a photo of him, was accessed by B’s friends and “a hundred other people”.
• Having obtained a court interdict ordering B to retract her statement and remove his picture from Facebook, H then sued her for R1.3m.  B did not defend the matter, and the Court had to decide on the basis of H’s story alone (a) whether H had indeed been defamed and (b) if so, what damages to award him.
• H told the Court that his reputation, good name and standing in the community had all been affected. He had suffered shock, trauma, sleeplessness and depression, and his constitutional rights to privacy and dignity were infringed as a result of the post, which had provoked reactions including –
  • Insinuations of paedophilia and child molestation
  • Posts from other Facebook users like “shoot the bastard in the face with a pellet gun, the ugly two faced jurk (sic)” and he was called a pervert, a “flippen gemors”, “a sick *%$@^#*”, “a monster”, and “a disgusting piece of *%^$”
  • Death threats, causing him to move to another residence on the estate (to no avail as it turned out, as B also moved, becoming his neighbour for the second time)
  • “Suspicious looks” from other estate residents
  • Loss of business clients (he ran a business in the estate).

Defamation being generally defined as ‘the unlawful, intentional, publication of defamatory matter (by words or conduct) referring to the Plaintiff, which causes his reputation to be impaired”, the Court held that H had indeed been defamed and was entitled to compensation by way of damages.

Taking all the circumstances of the matter into account, the Court awarded H an amount of R350,000 plus costs.