More s9(20) thoughts
11 March 2010
- In the very first article written by Antoinné van Deventer, she intimated that the legislation would be applicable to "primary residences" only.
However, the legislation refers to a "residence" only. Has this misperception been corrected?
- Then Bobby Bertrand's article: the first point I would like to make is that the Alienation of Land Act is applicable to alienations only as defined in terms of the Act, namely sales, exchanges or donations.
The second point is that I do not think that we should confine ourselves to a numerus clausus of causae.
For instance, where a road in a township is transferred to the Home Owner's Association, the causa is a condition imposed by the local authority.
By the same token, I fail to see why a trust, company or close corporation cannot take a resolution in terms whereof cognisance is taken of the moratorium in the relevant Acts and that the decision is then taken to make use thereof and therefore to transfer the residence in terms thereof.
From an accounting point of view it can then be treated as a dividend in specie in case of a company and close corporation, or a distribution of a capital asset in a trust. That in itself constitutes a causa.
What I do agree with is that it would be preferable for the resolution to state exactly whether it is a distribution, dividend or sale.
I note Antionné's assurance that SARS will not impose Donations Tax if the transaction qualifies in terms of Section 9(20) of the Transfer Duty Act. It is just significant that provision has been made for all the other taxes except Donations Tax. Or is it just an oversight?
I furthermore agree with Mr Bertrand in that where the property is bonded, it should rather be sold so as to introduce capital into the company/trust to settle the bond.