zombie, Author at Harbour & Associates

Your trust should own all of your investment properties for two reasons – To protect them from your creditors, and more importantly in most cases, to protect them from the nightmare taxes that kick in on death. So, how should the trust hold that property portfolio? Like this? You see the problem? It’s that 45% tax that only leaves 55% to be re-invested back into the portfolio. Surely there’s a better way? The solution is simple. We interpose a company between the trust and the properties – With this set-up, the company earns the income, pays 28% tax…

Part of project management requires the determination of the critical path. So what is that? We’ll take a simple example from the kitchen. This simple meal comprises grilled steak with vegetables and mash. The cook can only do one thing at a time, the meal needs to be ready as quickly as possible and all three components of the meal are to be ready for serving at the same time (no hot tray here!). The question is which is the sequence of the following processes which will determine the total time from start to finish. The first thing we need…

Transfer Duty is a relatively simple tax, but it is treated in some very strange ways in the legislation. Here are some examples – As far as I have been able to determine, it is the only tax that is applicable on a transaction between spouses. All others – CGT, Donations Tax, Estate Duty do not kick in at the time of the transaction. If the shares of a company are sold and whose assets are mostly residential property, then this transaction is treated as the sale of the properties and Transfer Duty applies. However, if the properties are mainly…

Here’s how to free up the flow of ch’i or prana in your rooms. Just as the flow of prana or ch’i through your body can get stuck, so the flow through spaces, such as rooms can get stuck. By applying feng shui principles, you can improve this flow, but there’s another technique. It’s called creating sacred space and is closely related to minimalism. Think of a room, your study, for instance. Are there shelves or cupboards stacked with piles of books, old documents, boxes of clutter? Have you…

Every time we prepare a trust deed, we write a will for the client and their spouse, but who should hold the originals? When you sign your Will, try (I know it’s tough) to imagine the events immediately following your death. Grief (you hope), funeral arrangements, financial affairs to sort out, inventory of your estate to be taken ………… Now where the heck is that Will? It happens all too often. Make sure that your spouse and children know (1) who your executor is and (2) where you keep your Will. Ensure that there are two originally signed copies. One…

I had an interesting meeting recently, the results of which ran contrary to my normal views. But there were good reasons. These clients wanted to set up a property investment trust to produce income for their mother who has the money available to invest. They propose to shut the trust down and distribute the properties to the remaining beneficiaries (themselves) when she dies. Normally, my proposal would include the following – 1) The client would be the founder of the trust 2) There would be a…

How, we often ask ourselves, can an attorney and advocate, defend someone whom they believe to be guilty? Do you remember those debating competitions of your school days? Each of two competitors was given opposing arguments in relation to a proposition. They then had to argue their side of the debate and the one who was most convincing would be the winner. Did the competitors have to agree with their own argument? No. What was being tested was not their beliefs, but their ability to debate an issue. When an advocate argues in favour of his client, he is doing…

Last week, I wrote how a trust saves tax for property investors. The same applies to entrepreneurs. You’re building your business, and you hope that some day it will provide for your retirement or that you will be able to sell it and invest the money for retirement income. And instead, you die. Damn! You may recall that the two taxes on death are – Capital Gains Tax (CGT) at about 18% Estate Duty at 20% Capital Gains Tax (CGT) You are deemed to have sold your assets to your deceased estate at the moment of…

Whether you’ve studied Japanese martial arts, Reiki, Chi-gong, Tai chi, my Mind Power Training, pranayama, yoga or acupuncture you will have come across ch’i or prana. What is it and how can you harness it? Prana (India), or ch’i (China) is, perhaps, best described as the universal energy of life. It flows into your body through your breath, the third eye (in the centre of your forehead), the top of your head and up through your feet. It flows around your body down the front, between the legs, up the spine and over your scalp, branching…

The other day, a client sent me his draft will to review. Amongst other things, he had bequeathed his dog to his sister-in-law. This raised a two interesting issues. The first question was why would he want to do that? Those of you who love your pets as children may want to ensure that a close family member agrees to care for them in the event of your death. It may then be appropriate (though not necessary) to include the bequest in your will. Then we must ask whether this can be done, and the answer is simply yes, even…

As you know, I am a bit of a Japanese abacus fanatic. This lead me to a fascinating method of multiplying using straight lines. Here’s how it works. We’ll take an example of 123 x 332 Draw parallel lines representing the number 123 Next draw a similar set of lines in the other direction representing 332 Now, all you have to do is separate the groups of numbers as I have done below Count the intersections in each group. This gives you 3 9 17 13 6 Carry the 10 of the 17 left to add it…

If you own investment property in your own name, SARS will grab about 30% of it’s value in taxes when you die. You built an investment property portfolio. It cost you R10m and, by the time you die, it is worth R40m. Here’s what happens. You are deemed to have sold the properties to your deceased estate at the moment of death for their market value of R40m. That means a capital gain of R40m…

If you read my blog, you will know that last year we sold our house and gave away practically all of our possessions (hey, there’s an 11 letter word with 5 s’s! Too many for Scrabble.). We had decided to go minimalist. Oops! We gave away all our white goods, furniture and just about everything except our clothes and cars. No, we were not planning to leave the country (heaven forbid). We just wanted to live in rented property and have freedom from household maintenance, pesky neighbours, bodies corporate and all the baggage that comes with owning your home. The…

Feng shui is an ancient Chinese science aimed at encouraging energy flow and balance within a given space. Having lived in Hong Kong for two years, my lovely wife, Helen, tells me that it is pronounced fung shoi, so let’s go with that. There are all sorts of rules about how your house, for instance, should be placed in relation to its surroundings (particularly roads), which rooms should be used for what purpose (e.g. central, NE, SE, NE and SW), the layout of your furnishings and the materials that they are made of. Sure, you can engage a specialist…

The only way to stop SARS’ monthly penalties for non-submission of your dormant company’s tax returns is to do the returns or de-register the company at CIPC then at SARS. The first step is de-registration at CIPC and there are two cost options – 1) Simply stop submitting Annual CIPC returns and wait for CIPC to de-register the company. This can take between two and five years, but there’s no cost. Of course, if you don’t do the Annual Tax Returns the monthly penalties will pile up dramatically. 2) We can apply to CIPC to de-register the company. If the…

There are four steps to obtaining your first letter of good standing from COID. First, your company has to register with SARS as an employer. Next, your company has to register with COID as an employer. You’ll have to disclose its PAYE reference number, the type of work it does, the machinery used, the number of employees and their anticipated total annual salaries. The registration can now be done on line. Once your registration has been processed, you will receive an invoice for the first fees. You must pay this invoice. When your payment has been processed, you can go…

Nobody likes to be retrenched, fired, laid off, or whatever term you choose to use for termination of employment, but if you’re the boss, you can at least ease their pain. Donald Trump is the worst example. In his TV series, it was simply “You’re fired!” and he seemed to love it, but that’s Donald Trump for you. I’ve been the boss since I was 28 years old, so I’ve done a lot of hiring and firing. In my early days, I was a Donald Trump. It was by far the easiest route to take. Quick, final, and get out…

I was brought up to believe that and was never preceded by a comma. My daughter said it always is. Seems we were both wrong. Evidently, these are the rules – You can list A, B, and C as in Peter, Paul, and Mary had a party. or you can list A, B and C as in Peter, Paul and Mary had a party. The comma is optional However, if the list is only of two items, there’s no comma A, and B is wrong as in Peter, and Paul exchanged business cards. A and B is right as in…

In principle all companies are taxed at 28% on their first R1 of taxable profit, but there are three exceptions where a tax threshold applies depending upon the classification of the company. Turnover Tax. This option was introduced for so-called micro-companies several years ago. It never caught on, mainly because a company could end up paying tax even if it traded at a loss. However, any company that adopted this tax system is only taxed on turnover exceeding R335 000. thereafter the turnover is taxed at 1% up to R500 000, 2% up to R750 000…

Any company in the construction business is likely to be required to register with the CIDB. So, who can register? CIDB stands for Construction Industry Development Board and has various grades of registration and various classifications of type of work that are separately registerable. Registration at Grade 1 is open to any company upon payment of the registration fee and submission of an application. Each of the many different classes of work, for example General building, Asphalt works, Road marking etc. must be registered separately and the fee is R450 in each case. Grade 1 companies…

Author: zombie

How your trust should hold investment property

What is a critical path?

Seven strange things you need to know about Transfer Duty

How sacred space frees up energy flow

Who should keep your will?

When should you use the conduit principal to draw funds from your trust?

Legal argument and debating

How trusts avoid taxes for entrepreneurs

How to use ch’i to improve your life

Can I bequeath my pets in my will?

How can you multiply using intersecting straight lines?

How trusts avoid taxes for property investors

Our flirtation with minimalism

Bring simple feng shui into your life

What does it cost to de-register a company?

How do I get a Letter of Good Standing from COID?

How to soften a retrenchment

When does a comma go before “and”

Is there a tax threshold for companies?

Who can register with CIDB?