Transfer of assets between spouses: What are the tax implications?
Section 9HB of the Income Tax Act provides for a roll-over of a capital gain or loss when an asset is transferred between spouses during their lifetimes. The roll-over is mandatory, and spouses do not have the option to elect out of it. The policy rationale for the roll-over is that the transferor spouse must benefit […]
Interest: SARS’ View on the In Duplum Rule
The in duplum rule originated from the South African common law and has been applied through South African case law for over 100 years. The rule aims to protect borrowers from exploitation by lenders that allow and, in some cases, cause interest to accumulate unabated: leading borrowers into further indebtedness. In terms of the common law, the interest charged on a […]
When shares become assets
Many business transactions are concluded in terms of section 42 of the Income Tax Act. The section essentially allows a transfer of an asset by a person to a company, in exchange for equity shares in that company, allowing for tax neutral transaction.The South African Revenue Service has recently issued Binding Private Ruling 339, relating […]