VAT and Transfer Duty

Property Law encompasses inter alia matters relating to Value Added Tax (VAT), Transfer Duty and Capital Gains Tax (CGT), which fall in the sphere of the South African Tax Law.

To explain the place of VAT and Transfer Duty in Property Law, we distinguish between what we call VAT and/or Transfer Duty transactions.

A VAT transaction is where the Seller is a registered VAT vendor. In this case, the Purchaser will not be liable to pay Transfer Duty to the Receiver of Revenue, because the Seller will ultimately pay VAT on the transaction to the Receiver, and therefore it is labeled a “VAT Transaction”.

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Trusts

Trusts are regulated by the provisions of the Trust Property Control Act, No 57 of 1988, which act defines a “trust” as follows:

““trust” means the arrangement through which ownership in property of one person is by virtue of a trust instrument made over or bequeathed –

  1. to another person, the trustee, in whole or in part, to be administered or disposed of according to the provisions of the trust instrument for the benefit of the person or class of persons designated in the trust instrument or for the achievement of the object stated in the trust instrument; or
  2. to the beneficiaries designated in the trust instrument, which property is placed under the control of another person, the trustee, to be administered or disposed of according to the provisions of the trust instrument for the benefit of the person or class of persons designated in the trust instrument or for the achievement of the object stated in the trust instrument,

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Wills and Estates

The Wills Act No 7 of 1953 prescribes certain formalities and requirements for a valid will. Non-compliance with these formalities and requirements will necessitate the intervention of the Court, which must then be convinced that the document was indeed intended to be the deceased’s will. It is therefore crucial to obtain legal advice before finalising a will if there are uncertainties about the requirements for a valid will.

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