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We want to sell our property in our CC? What are the tax implications?

Posted 1 July 2015 under Tax Questions



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MJK says:
26 June 2015 at 15:53

Our CC has a property under its name which we currently reviewing a OTP for it. The CC has been dormant for the pass 10 or so years. What will be the tax implication on this Disposal And how can it be worked out?

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TaxTimTaxTim says:
28 June 2015 at 12:36

Is someone trying to buy the company or the property from the company?


MJK says:
28 June 2015 at 12:39

They want to purchase the property which is on the CC Name?


TaxTimTaxTim says:
28 June 2015 at 12:45

When was the property purchased? If after 1 October 2001 then this cost plus any improvements will be the base cost which is deducted from the proceeds received and 2/3rds of that gain is included in the company's taxable income which is then taxed at 28%.


MJK says:
28 June 2015 at 13:05

The property was purchased in 1991. The CC has been dormant for the past 10 years since my dad past on.. My mum & siblings were made members of the CC after my Dads Demise There has been no revenue at all and according to SARS the tax number has been deregistered. So What will be the tax implications or how do we go about with sale? Your insight to this would be beneficial to us. Thanks


TaxTimTaxTim says:
28 June 2015 at 15:39

The tax implications will be as above, however you would need to work out the value of the property for the base cost and you can make use of our Capital Gains Tax Calculator to work that out. Once you have worked out the gain then 2/3rds are included in the company income tax which you would then need to submit a return to SARS for and pay tax on 28% of that included gain.


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