I get to read lots of trust deeds, occasionally one will be well written, but most are just the usual copy and paste stuff by someone who doesn’t apply his or her mind to the job. Here’s what you should be out looking for – 1) If the founder is your parent and not you, ask the person who drafted the deed why that is. If they tell you it is in case the trustees want to award you, as a beneficiary, a fixed property and because there is some doubt as to whether you are a relation of yourself…
Author: zombie
Dividends withholding tax is now 20%, but when is it charged or not charged? In principle, DWT is withheld by the company paying the dividend, then paid over to SARS by the end of the month following that in which the dividend was declared or paid. So if the dividend was R100 000, the shareholder gets R80 000 and SARS gets R20 000. If the shareholder is not a South Afrcian resident (and provided his/her share certificate was stamped “Non-resident”), then we have to go to the Double Taxation Agreement between the shareholder’s country of residence and South Africa. Depending…
When anyone mentions his “auditor”, I always ask “Is he a CA?”. The answer is invariably something like “I assume so”. What?? My last article was prompted by a new client who’s auditor had been guilty of several mis-conducts. I knew he was a registered auditor because he had performed and signed off audits every year on the client’s financial statements. In frustration, the client was considering reporting him to the Independent Regulatory Board for Auditors (IRBA). I went on to the IRBA website and found that neither he, nor his company were registered. I checked on the SAICA website…
So you’re starting a new business. You figure that you can undercut the established competition because you don’t have their overheads. You are about to make your first two mistakes as a business person. Firstly, you are relying on your low prices to get business, whereas you should be differentiating yourself so that you stand out from all the rest. Secondly, if there’s not some extra fat in the price, you’ll never grow, or if you do, you’ll soon run short of cash and won’t be able to afford the overheads that are necessary to sustain growth. So, stop thinking…
It has happened so often now that I am no longer shocked when I hear from an entrepreneur that his accounting professional failed to bring any one of these four things to his attention. 1) In terms of the new Companies Act, if your company is doing less than about R400 million a year turnover, it doesn’t need an auditor. 2) And it does not need an audit. The auditing industry suffered very badly when the new Companies Act introduced these new requirements (or lack of them), so let’s break it down. I’ll assume that yours is not a company…
Sugar gives you energy! Sugar is good for you! Sugar will give you diabetes! Sugar will kill you! Many years back, I regularly added four teaspoons of sugar to my cup of tea. Then I read a book called “Sugar Blues”. I went cold turkey, from four to none in one hit. Thank goodness I did. Do you know what sugar does? When it hits your bloodstream (and it gets there fast), your blood sugar skyrockets. Your pancreas gland then shoots out insulin to normalise the blood sugar level. Trouble is it kind of panics and sends too much insulin,…
It happens occasionally. A really unhappy client. What do we do? Here are the worst bits of what he wrote – “The level of competency in your office is beyond ridiculous, seriously. The entire address capturing assignment was much worse than a visit to the dentist for all round teeth crowning. The service levels are truly pathetic.” Taking this against the backdrop of compliments that get showered on us and my staff, it would be very tempting to pass it off as someone who is over-reacting to the fact that we are all human and we all make mistakes. But…
Is it my imagination or are the roads around Johannesburg getting fixed? I live in Fourways and work in Midrand. The first thing I noticed was that potholes were getting repaired, but it has gone beyond that, roads are being resurfaced all over the place and in many cases widened. I wonder whether Pretoria and Nelson Mandela Bay are getting the same treatment? Where is the money coming from? You don’t have to be a rocket scientist to figure out that the DA and other opposition parties are plugging the corruption leaks in the municipalities that they have taken over.…
Do you play cribbage? It is the best card game for two by far, or doesn’t anyone have time for card games any more? Here’s how we spiced the game up even more with jokers. Helen and I play about twice a week, usually when we’re taking something from the freezer that Helen cooked previously, or when I’ve brought in shushi from the local Japanese place. A game of cribbage has all of the elements essential to any good game – luck, skill and some really close finishes. We added an interesting variation, which worked out well. If you know…
Any natural person can donate a total of R100 000 each tax year free of Donations Tax, so, if you want to protect your household goods and motor vehicles from creditors, buy an old shelf trust. Your first donation would be dated in the first February in which the trust existed, the second a few days later in March and then every March thereafter. You and your spouse don’t have R200 000 floating around for each donation, so you simply record the donations and agree to owe the money to the trust. Then you take a very detailed inventory of…
How many crises have you had in your life? And how many major turning points? Aren’t they the same thing? Certainly, when I look back over my life I cannot help but recognise that every crisis started me in a new direction, every one of which was a dramatic improvement on my quality of life. So much so, in fact, that my crises all turned into my greatest blessings – they forced me to re-think where I was at and where I was going. I also have to say that none of them were in any way pleasant (they would…
Pity you, the poor business owner who decides to voluntarily register his company for VAT. Here are the latest obstacles that you’ll have to overcome – You’ve heard somewhere that you can now register on-line. This was anounced with great fanfare about a year or so ago. Right, so you go on-line and yes, there’s an application form called a RAV01. You dutifully fill it in, but wait, the date first liable is critical as all transactions from that date are deemed to include VAT. So, make sure you get that right. So what next? You now have to take…
Most people who come to see me about forming a trust want either just their children or perhaps themselves and their children as the beneficiaries. Is this a good idea? No, and here’s why you shouldn’t do it – If a trust has no beneficiaries, then the High Court has to decide what happens to the trust assets and it sometimes awards them to the State and that means that if you, your spouse and children all die in the same accident (which, unfortunately, is not beyond the bounds of possibility), then JZ and his cronies get another windfall. So…
We all have times when there are just a stack of jobs to do and we have to decide which ones we’re going to tackle first. A knowledge of queueing theory can help us decide. Suppose you have 5 jobs in the queue and each one will take a different amount of time – Job 1 – 7 hours; Job 2 – 3 hours; Job 3 – 5 hours; Job 4 – 1 hour; Job 5 – 12 hours If you do the longest job first, then the next longest and so on, doing the shortest job last, then the…
Some trust advisors advocate having three (and, more recently, four) trusts. Great for them, dumb for you! They want you to buy these trusts from them (and it is amazing how many otherwise clever people fall for it) – 1) Your family trust. This one is to hold your family goodies, like toys-for-boys, jewellery etc. to protect them from creditors and to avoid the taxes on death. 2) Your property trust. To hold your investment properties. 3) Your share trust. To hold the shares in your business and any listed shares. 4) Your primary residence trust. This is their latest…
There are six different types of trust sometimes with sub-categories. Here they are – 1) Intervivos Discretionary Trust. A trust set up during the lifetime (intervivos) of the founder and in which he/she gives the trustees absolute discretion to handle the trust assets and income for the benefit of the beneficiaries. This kind of trust is used for asset protection and estate planning. There is a sub-category which is an intervivos non-discretionary trust. This is effective for estate planning, but not for asset protection. The trustees do not have absolute discretion. The Master has recently, with absolutely no authority to…
Since I started learning to use the soroban, or Japanese abacus, I have also picked up some fascinating features of certain numbers. Take 37 for example. I was given the finger exercise of 37 + 37 + 37 +37 +37 + ……………. , quite an interesting challenge on the abacus, but imagine my surprise when one of the totals came up as 111, then later up comes 222 then 333, 444, 555, 666, 777, 888, 999. It turns out that this is because 111 is 3 x 37, 222 is 6 x 37 and so on. I mentioned before that…
How do you figure out how long it will take for the Rand to halve in value at a particular inflation rate? Use the Rule of 72! This remarkable “Rule” is very accurate, but is not mathematically exact. Let’s say that you expect inflation to average 7%. You have R1m under the mattress. How long before it is only worth R500K in buying power? You divide the number 72 by the inflation rate 72/7 = 10 years. Isn’t that clever? Say you expect inflation to average 9%, then your R1m will be worth only R500K in 72/9 = 8 years…
Did you hear that heartrending advert on the radio? It was a recently retired couple who finally found a bank that cares for them. Now they can take that dream cruise that they’ve talked about for years and they can retire comfortably knowing that their capital is guaranteed safe. Why? Because the bank guarantees them a whopping 7 1/4% return. Now, if real inflation was 6% (wishthink) that would mean that they have 1 1/4% available to spend, so if they want to retire on, say, R60 000 before tax (and the way they are talking about cruises etc. they…
One of my clients has a company with branches in Jhb, CT and Durban. The turnover is about R25m and he has three adult children. This is how and why we decided to restructure the business. His intention was to pass shares on to his children as he approaches retirement. We figured that we should form three new companies, one for each branch and each owned by one of his children, but with him as the sole director of all of them. He can relinquish the directorships when he retires. The existing company has certain accreditations which require additional specialised…