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Have you noticed that SARS claim to be only 25 years old? It’s on their website when you log in. And here’s Harbour and Associates celebrating 50 years – And still many people don’t know that we are accountants! So let’s put the record straight. Here’s what we do – Financial statements with or without review Formation of trusts Formation of companies Personal and company tax Bookkeeping Payroll VAT B-BBEE affidavits Company secretarial Registrations Wills Business plans But, most of all, what we do is stand by you. I’ve been meeting people at no charge for something like…

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I’ve already written two articles on owning your home vs. renting it. Here’s one and here’s the other. But now we have a new take on the subject. We sold our house about 5 years ago and have rented on an annual basis ever since. The result is that we are now living in our 5th rented property, a beautiful house in Knysna. Our garden flows into a forest and because the trees are on a steep downward slope, we look over them to the lagoon and, further away, the Outeniqua mountains. Paradise! However, there are three downsides…

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Did anybody notice? Woolies are selling some very well known and respected wines in 2L boxes as an alternative to bottles. I’ve listed the price per 2L, the (resulting cost of 750mL) vs the cost of a 750mL bottle Diemersdal Sauvignon Blanc R169 (R64 vs R85) Pierre Jordan Tranquille Blush R140 (R53 vs R70) Beyerskloof Pinotage R200 (R75 vs R100) La Motte Merlot R189 (R71 vs R90) De Wetshof Limestone Hill Chardonnay R219 (R82 vs R109) Spier Cabernet Sauvignon R190 (R71 vs R95) Alto 1693 R240 (R90 vs R120) Every one of them represents a discount of 25% on the cost…

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I get so many people wanting to buy a shelf trust because they need to sign an offer to purchase urgently. Why? Because the seller has given them a deadline! What’s wrong with this scenario? Firstly, they should be buying the property in a company of which their new trust will become the owner. They clearly haven’t read my book “16 Steps to Wealth“ Then, they are not following one of the basic principles of successful property investment – you must not want anything badly.  If you get the wants, you will not buy well, and don’t forget that…

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When planning an Asset for Share swap using the s42 provisions in the Income Tax Act, you will see that the shares have to be new issues, not existing shares. As we invariably want all of the shares to be owned by a trust, we find it best to use a new company. The way an Asset for Share swap works is the new company issues 100% of its shares to the trust in return for an asset or assets (usually fixed property). There is no tax against this transaction. No CGT, no Transfer duty, no tax. There are, however,…

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We moved from Johannesburg to Knysna just over a year ago. Apart from the change of climate, scenery and available hiking trails, the big difference that we found was the air quality. There’s an App called AirVisual that shows the Air Quality Index of any place in the world based on a scale of 0 (zero polution) to 500 (you’re all dead). Here’s what we often see in Knysna And here’s why we are happy to have left Johannesburg – Knysna usually sits around 10 or less, whilst Jo’burg runs from 30 odd to 180! It’s a…

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Think about how often you base a decision to buy upon a website or facebook page. You’re on holiday and need to choose a restaurant. You search and find several alternatives. From what you see, you decide which one you fancy and book a table. You need a plumber. You search and find several alternatives. From what you see, you decide which one you can rely on and make a call. You want to buy a gift on line. You search and find several alternatives. From what you see, you decide which one to buy and from whom. What are…

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The answer used to be “Yes”, then it was “No”, and now it is again “Yes”. I guess it all depends on which side of the bed the Master got out of this morning! The problem arises when there’s a need to change the beneficiaries, or when the trust deed was so badly drafted that it is hardly worth the paper that it was written on. A change  of beneficiaries should be a rare occurrence if the trust deed was well written in the first place. Usually, it will only be necessary if you’ve bought a shelf trust. However, the…

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I get so many people asking me why we have not registered them as shareholders at CIPC, it’s time to explain. Members of CCs are registered at CIPC (because they are, amongst other things, “directors” of the CC). Directors of companies are registered at CIPC. Shareholders are not registered anywhere, except in the share register. The share register is usually an Excel sheet filed on the server at the registered office of the company. That’s it! There’s the only place you will find the shareholders. A share certificate is issued by the company secretaries to the shareholder and…

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Transactions, such as the sale of shares or fixed property between related parties are deemed for tax purposes to have been at market value, regardless of the documented transaction value. It often happens that you will want to sell assets into your trust structure and you are a connected person in relation to the trust. So, how are the assets valued? The value of listed shares are published daily, so that one is easy, but what about shares in a private company, or in an investment property? All tax acts are silent on who may perform the valuation, so you…

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When a company or CC has failed to submit Annual returns, CIPC marks them “In de-registration process”. To return to “In Business”, we simply have to submit the outstanding returns. Then, periodially, CIPC will Finally de-register those companies and it is usually impossible to restore them. CIPC has just given notice of its intention to finally de-register all companies that are in de-registration process. If yours is one of them and you don’t want to lose it, get hold of us at 011 805 0030 urgently.

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What is it about attorneys? Are they taught to write shockingly bad English or do they just pick it up as they go along? I have a standard lease agreement that’s been floating around for years. We found a lovely house to rent here in Knysna and I offered to draft the lease. I set out to eliminate all the legal waffle that the document contained. I think this one sentence with 241 words is a classic – The Lessor shall not be responsible for any damage to or the loss of any stock, furniture, equipment…

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We recently formed a company for someone. He wanted the name Bidvest S…….. (Pty) Ltd. I can’t say what the S…….. was but it described the kind of business that he was in. The computer at CIPC would not see a conflict because there are so many Bidvests (52 at the last count) that it would interpret that as meaning that no-one had exclusive title to the word. The name was approved by CIPC and we went ahead and completed the company registration. Shortly after that he was complaining to us that the name Bidvest was a Trademark and they…

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I was chatting to a client on Zoom and trying to do some quick arithmetic at the same time. I didn’t do too well! She had R35m which she wanted to lend to an investment company that would be owned by a new trust. The question was. How much tax would she pay as a result of s7C of the Income Tax Act. s7C says that she would have to charge the company interest on the loan at least at the official rate which is currently 5,25%. Because the company deducts the interest from its taxable income, that’s a negative…

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Last week I talked about a client who is building his company on bad business instead of good business and I briefly mentioned some performance ratios that he needed to achieve in order to get things on the right path. So, if I know nothing about his particular industry, how can I tell him what he should and should not be doing? The answer is in the ratios. There are very few different types of business. Let’s take a look. Service companies. Their costs are almost entirely salaries and rental. Manufacturers. Their material costs are the highest of their costs,…

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We recently completed a year’s accounts for one of our bookkeeping clients. This time around, I noticed that his turnover had shot up from R1m to R4m. Seemed like things were going well. Until I looked closer. His net profit dropped from R53K to R47K, so he was doing four times the amount of work for less profit. On R4m turnover, he should be making at least 8% profit which is R320K, but he was making about 1%. His Gross Profit (the difference between sales and purchases) was 20% of turnover for both years, which is about a half of…

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When you form a trust, you actually become four different people. You as a person whose financial affairs are entirely separate from those of the trust. You as the founder, the person who forms the trust and who has to agree to any changes to the trust deed. You as one of the trustees who will manage the trust for the benefit of the beneficiaries. You as one of the beneficiaries who may benefit from distributions by the trustees. What is important is that you cannot be two or more of these people at the same time. If you are…

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Helen hit a bad pothole and it damaged the wing of her Z4 as well as the aluminium rim. The insurers arranged the repairs and we took it in to the panel beaters. I asked them to quote on all other imperfections that they could find so that the exterior of the car would be perfect. There was a bit of this and a bit of that and the quote came to something over R15 000. I got to thinking. “I wonder if this would be covered by the insurance”. I phoned our insurers, MUA, and yes, they would cover…

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If you manage your debtors, you are already a long way to a successful business. Here are a few examples of what people do right and wrong. Right. Don’t do a thing until you’ve been paid. That’s the way our practice operates, so we have zero debtors. Almost right. Insist on a 50% deposit and the balance immediately prior to installation. Almost right. “This is a cash practice. Please pay on the way out.” Note – “In” rather than “Out” would be perfect. Hardly right. Insist on a 50% deposit and the balance immediately upon installation. Wrong. “I’ll send you…

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I was chatting in one of my Zoom meetings to a guy who had just finally settled his divorce. He said that when they first agreed to get divorced, it was amicable and there was not problem with the settlement. Then along came the lawyers and suddenly they had a fight on their hands. Two years and ridiculous attorney fees later, they have now agreed on the settlement. Then he came up with an interesting proposition. He said that if ever he were to get married again, he and his future wife would draw up and sign a divorce settlement…

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