Could someone please answer the following question: A CC owns a residential apartment block consisting of two units.
Can the member take transfer of the whole property in terms of the moratorium provision or would it be necessary to open a sectional title register to enable her to take transfer of the unit constituting her primary residence leaving the other unit in the ownership of the CC?
It is clear from the question that the building has not been sectionalised and therefore what falls to be delt with at present is the conventional title property. It is implied by the question that the flat occupied by the sole member of the CC is larger than the other flat and it is assumed that she has occupied the larger flat since 11 February 2009 as her primary residence. To me it is clear from para 7.2.3 of the GUIDLINE published by SARS that she may avail herself of the moratorium provisions under Para 51A of the 8th Schedule without having to go the sectional title route.
It seems to me that in due course when the CGT falls to be determined there will be a pro-rata abatement of the then applicable "exclusion" amount commensurate with the floor area of the two flats. It is interesting to consider what the effect of sectionalisation in the future will be. If the smaller flat were sold I suspect it would attact the full capital gains tax, but there may be some difficulty in determining the base cost, and would leave the remaining unit with the advantage of the full exclusion.