Financial implications for selling immovable property – is it classified as capital or revenue?
South Africa - De Rebus
Whether a receipt or an accrual is ‘capital’ or ‘revenue’ in nature, in calculating a taxpayer’s taxable income, is probably the most common issue that arises in income tax litigation. With the current financial climate prompting many people to restructure their financial arrangements, for some this has meant contemplating the sale of their immovable property. Due consideration must be given to the tax implications of such a transaction and whether the resulting profits would be subjected to tax by the South African Revenue Service (Sars) as part of the taxpayer’s gross income or capital gains tax calculation.
Such a finding can have different financial implications for the taxpayer and their cash flow. The purpose of this article is to provide insight into some of the considerations one should bear in mind when contemplating such a transaction by outlining the test of when such profits will be revenue in nature and form part of the taxpayer’s gross income calculation.
Financial Pressure the biggest driver of activity in owner serviced properties
South Africa - PropertyWheel
FNB has released its latest ‘Property Insights – Owner-Serviced Property Selling Motives’, a continuation of their fourth quarter 2020 results of their FNB Commercial Property Broker Survey which covers a sample of commercial property brokers in the six major metros of South Africa – City of Joburg and Ekurhuleni (Greater Johannesburg), Tshwane, eThekwini, City of Cape Town and Nelson Mandela Bay.
Focusing on the key drivers of movement and sales activity in owner-serviced properties, the survey results show financial pressure to still be (by far) the biggest single driver which became noticeably more prominent in the second quarter of 2020 as Covid-19 lockdowns hit. This driver has remained ‘elevated and rising’ in the fourth quarter survey.
FNB asks respondents for their perceptions of the major drivers of ‘movement and sales activity’ in the owner-serviced property segment. These respondents estimate the percentage of movement and sales that they believe would take place for a particular reason with the total percentage of all reasons adding up to more than 100% due to businesses selling or relocating for more than one reason.
SPLUMA judgment found to be invalid and suspended for six months
South Africa - Tech4Law
RE: CLARITY ON EFFECT OF JUDGEMENT — GLENCORE & OTHERS VS STEVE TSHWETE LOCAL MUNICIPALITY & OTHERS, CASE NR: 2607/2019, MIDDELBURG HIGH COURT
We refer to the above matter as well as the judgment handed down in respect of the abovementioned case.
We act on the advice of our legal representative, which we accept to be true and correct.
The Acting Judge, in the matter above, has found that Section 86 of the Emalahleni Spatial Planning and Land Use Management By-Law, 2016, is invalid and has suspended the declaration of invalidity for a period of six (6) months to allow the Municipality to correct the defect.
In light of the suspended declaration of invalidity, kindly take note that the Municipality will continue with the implementation of the said Section of the By-Law until further notice.