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I did it! I am terrified of heights. We stopped by at the bridge and I knew I had to do it. This was a battle of the brains. Front brain battling left brain, right brain and old brain. I am fascinated by my brain, and I have gone a long way to making it my best fried, but this was an incredible challenge. Could I bring myself to dive off a bridge over a 216 metre drop? For three nights, I hardly slept. I rehearsed that moment 5,4,3,2,1 Go! I was going to dive, not jump. I was ready.

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We often get enquiries from non-residents who wish to form a company in South Africa. Much of it is pretty straightforward, but there are a few special considerations. Anybody, or any company, anywhere, may be a shareholder, or even the only shareholder, of a South African company. Anybody, anywhere, may be a Director, or even the only Director, of a South African company. The Registered Office of the company must be at a South African street address. We offer our offices for this purpose. However, if the company wishes to open a bank account, then it must be opened by…

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Sure, Covid has been a terrible pandemic. Devastating families and businesses. Smashing up an already smashed up economy. Changing the smiling faces and hugs that we South Africans are so used into “Stay away from me”. Changing the property rental business probably forever. All very sad. Buy hey, there was at least some benefit. In February 2020, before we’d really cottoned on to Covid, I resolved that by the end of the year, Helen and I would be “free to choose”. That meant free to choose everything from how we lived to where we lived. Having already opted for home…

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I read with interest a recent Constitutional Court ruling that adopted children are descendants. As such they are beneficiaries of a trust in which the beneficiaries are defined to include descendants. The report referred to the Children’s Act 2006 which, evidently, defines adopted children as descendants. However, in this case, the trust deed was signed prior to 2006. It was argued that the Act could not be applied retrospectively. The Con Court found in favour of the adopted children. I struggled with the Children’s Act, with which I am not familiar and couldn’t find the relevant definition. However, I did…

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You know, for a Pr(Eng); CA(SA); I can sound pretty dumb at times. Like when a client recently asked me if I was familiar with Velocity Banking. Nope, never heard of it! So he then went to some lengths to explain this miraculous method of paying off your mortgage bond in no time flat. Um, surely all you’re saying is that if you put all of your excess income over expenditure towards your bond, then, because that extra reduces the capital, it also reduces the interest and the interest on the interest? Yes, well, if you put it like that,…

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Let’s assume you owe money to the bank(s), the Municipality, SARS and a few retail outlets, and that you could make arrangements with all of them to pay off your debts over a period of time. And that you have sufficient income to be confident of sticking to these repayment agreements. So now you ask whether you should make these undertakings, or allow bankruptcy to proceed. There’s no simple answer to this one, but let’s give it a go. There’s the moral question. Should I make others suffer (financially) to reduce my own suffering? My answer? Yes to SARS, Yes…

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Covid has changed our lifestyles so much that it got me thinking about the future of investment properties. Consider this – Many people (me included) have realised that there’s no need to go to work in an office. The universal acceptance of Zoom, Google Meet and now, even Whatsapp, have changed that. Office space is now left empty and unlettable. Some of us (me included) have even taken the next step and realised that if they work from home, then home can be anywhere. So why own property in one place, when you can rent (and move on) wherever you…

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Oh wow! Company Tax down from 28% to 27%. Isn’t that lovely? But what does it mean exactly? If your company is doing OK, then it probably makes about 7% net profit on turnover before tax. Then, until this exciting announcement, it paid 28% x 7% tax, that’s 1,96% of turnover. Now however, you must be really happy, because it will only pay 1,89%, a massive saving of .07% of turnover. So the next time you think of increasing your selling prices, be sure to pass at least some of the benefit on to your customers. They will love you…

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I have deliberately used the exact headline that appeared under Businesstech on my Google news feed. This kind of sensationalist rubbish is shameful and has to be exposed as just that – sensationalist (and, I suspect, advertorial) rubbish. Although written by a staff reporter, the (mis)information is attributed to Mohamed Kamdar a “tax specialist” at the South African Institute of Professional Accountants. Now that, in itself, is a falsehood, because the SAIPA do not employ tax specialists. The reality is that he only belongs to SAIPA. Given that SAIPA is a poor man’s substitute for SAICA, the South African…

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So many people think that first prize is to buy their own home. But is that really the best option? What does it entail? Insurance Gardening Maintenance Neighbours that you’re stuck with A big chunk of non-discretionary expenses Stress to sell when you want to move on So what is the alternative? Renting your home. The advantages? No insurance No gardening No maintenance Neighbours that you are not stuck with Flexibility to up size or down size Minimum stress when you want to move on Compare the long term financial effect. In the short term, the cost of renting is…

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There’s a lot of misconception about SARS, trusts and taxes. Why? Because trusts are taxed at 45% and their CGT rate is 36%, so the buzz is that SARS is going for trusts. Not so! Consider this. I have no doubt that practically every politician has a trust. That’s where the dirty money goes. And, of course, it is politically correct to appear to be leaning heavily on these things that only rich people have. But that’s all smoke and mirrors. Do trusts ever actually pay tax? Not where I come from. Here’s why. A trust should never own anything…

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Actually, it is of no importance at all. It is the IT number that distinguishes one trust from another. So, unlike companies, there can be numerous trusts with the same name, but none with the same IT number. But, please be kind to whoever keeps trust documents on file. Do not make “The” a part of the trust’s name. It’s much more difficult to find “The Charlie Family Trust” amongst a whole load of other “The” entities, than it is to find the “Charlie Family Trust”.

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I have been assisting two companies with their tax affairs. They are both in the same group. The first one’s 2019 tax return did not reflect the rental expense, despite the fact that the bookkeeping, financial statements and tax return had all been prepared by the same firm of “Professional Accountants (SA)”. No one had bothered to check the tax calculation against the one at the back of the financial statements which showed a tax liability of a mere R8 000, so the company had been hit with a tax assessment of R144 000! We submitted a revised tax return…

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Not only is the answer a resounding “Yes”, but after bequeathing everything to your spouse if you die first, the next line in your will should almost certainly say that if you die together, then you bequeath everything to the trustees of your trust in their capacity as trustees. Why? Because you’ve already gone to great lengths to set the trust up with your children and siblings as beneficiaries. Your Will also appoints your succeeding trustee(s), so that’s taken care of. And if you are also permitted by the trust deed, to change the trust from discretionary to non-discretionary…

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I thought I was savvy about scams and would never get caught. But when my cell phone was stolen I learned a big lesson. I had my banking app on the phone, but always had to tap in my PIN, so I figured that was safe. I had internet banking on my desktop and had remembered the banking password to Google Chrome, but that was OK because the desktop is password protected. So, my cell phone was stolen and the thief, presumably having seen the Standard Bank app icon, Googled standardbank.co.za, must have found my email address somewhere else on…

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So you want to form a trust for the kids? Really? Only for them? What about you and your spouse? You know that they say “The best thing that the rich can do for the poor is to stay rich”? Well, its also true that the best thing that you can do for your kids is to look after yourself first. After all, nobody knows what the future holds, so you don’t know what your future needs will be. First off, you need to grow wealth. Second, you need to protect it from your creditors. So you grow it in…

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So many people who come to see me fail to understand the extent of their risk as shareholders and directors. Few of them ask about their being the Public Officer, but that’s because they have probably no knowledge of their appointment.
Most of their fears are the result of SARS’ low level staff believing that they have powers far beyond the law. So let’s deal with each of them in turn.

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There’s some pretty stupid tax legislation out there that leads to taxes that SARS hasn’t a hope of collecting. Here are some of them – 1. Transfer Duty on sale of shares in a company owning residential property. If the shares in a company owning mostly residential property (a so-called residential property company) are sold, then this is deemed to be the sale of the property itself. The sale then attracts Transfer Duty. The problem that SARS has is that the only place where the sale of shares is recorded is in the Share Register, which sits on the server…

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The question of whether a trust owned company Financial Statement must be reviewed or audited has tossed me around like being in a tumble dryer. It all stated back in 2008 when the new Companies Act was published (it only came into effect in 2011). It separated companies into three main classes. Those with a Public Interest Score (PIS) of 350 or more. Those with a PIS of less than 350, and, of those, ones which were owner managed. As a high PIS implies multi-million Rands turnover, trust owned companies inevitably have a PIS of less than 350. So the…

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