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Month: September 2014

WHAT IS THE COST OF MY ESTATE DUTY?

WHAT IS THE COST OF MY ESTATE DUTY?

A1blIn terms of the stipulations of Article 4 of the Act on Estate Duty No 45 of 1955 certain deductions (known as rebates) from the net value of an estate are allowed in order to determine the final value of the estate which will be subject to estate duty.

The following two rebates are the most well-known:

  • Article 4(q) – This is the total value of all the benefits bequeathed to the surviving spouse. The value of a usufruct also qualifies as an Article 4(q) rebate; and
  • Article 4A – This is the value of the rebate applied to all estates, which is currently R3.5 million.

Given the value of the Article 4A rebate you can rest assured that your estate will not be accountable for estate duty if the net value (assets minus liabilities) is less than R3.5 million. The amount with which your estate exceeds R3.5 million will, however, be taxable for estate duty at 20%.

The Taxation Laws Amendment Act amended the Article 4A rebate by allowing the part of the R3.5 million rebate not used by the estate of the first deceased to be carried over to the estate of the surviving spouse. This amendment applies to the estates of everyone passing away after 1 January 2010.

The carried over rebate between spouses can be illustrated with the following example:

  • Mr A, who is married to Mrs A, passes away. The net value of his estate is R800 000 after the rebate according to Article 4(q) has been calculated.
  • This amount is bequeathed to his children and therefore not deductible for estate duty.
  • There is no accountability for estate duty as Mr A’s estate only used R800 000 of the Article 4A rebate of R3.5 million.
  • At Mrs A’s passing the net value of her estate is R8 million. The following rebate is applicable to her estate: Article 4A rebate to the value of R7 million minus the R800 000 deduction already utilised in the estate of Mr A.
  • Mrs A’s estate will therefore pay estate duty on R1.8 million (R8 million minus R6.2 million).
  • R1.8 million @ 20% = R360 000.

We have to put the utmost stress on the importance of estate planning and a will which gives you the best benefits regarding the composition of your assets and liabilities should the net value of your estate exceed R3.5 million. This does not mean that the use of trusts becomes obsolete in estate planning due to the larger rebate in the surviving spouse’s estate. There are still valid reasons why the bequeathment of a trust by the first deceased is an excellent option, even though it does not initially effect a saving in estate duty. In case of such a trust the assets can be managed by the trustees to the benefit of the surviving spouse and children. A small effort today for much peace of mind tomorrow!

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.

HAVE YOU EVER DONE YOUR ESTATE PLANNING?

HAVE YOU EVER DONE YOUR ESTATE PLANNING?

A2blIf you have never planned your estate, perhaps now is a good time to consider it.

This will be to everyone’s benefit, as there are often hidden costs which come into effect at the time of passing, that are not taken into account when you plan your estate and inheritance.

These expenses include the following:

  1. Estate duty;
  2. Executor’s fee;
  3. Capital Gains Tax.

In the first place these costs have a direct impact on the cash balance of the estate, and the question arises whether there will be enough cash to enable the Executor to administer the estate without having to sell estate assets. This can slow down the administering process of the estate considerably with potential detriment to the heirs.

Secondly the care of the dependents will be influenced because the abovementioned costs will have to be settled from the estate cash. This may result in the spouse and children inheriting less than what the testator had planned. The person who gets the worst of it is the person who lives longest, because he/she usually inherits the remaining estate cash.

Unfortunately the fact that you have a judicially sound will may not necessarily provide the answers to these questions. A thorough estate planning will be needed in order to find the answers. The stipulations of the will must be tested against the aforementioned costs, after which the necessary changes can be made to produce a cost-effective will. The will’s lay-out will therefore have a direct impact on the abovementioned costs. If you spend time now to ensure that your will is in order in all of its aspects, it will save much grief when you are no longer there to set things straight.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.

THE CONSUMER PROTECTION ACT

THE CONSUMER PROTECTION ACT

A3blIt is safe to say that no act has had such a dramatic effect on the psyche of not only the general public, but legal professionals, as the Consumer Protection Act 68 of 2008 (“CPA”).

The CPA is met with equal parts confusion and excitement, especially in the realm of lease agreements, whether for residential or commercial use. The questions we will deal with in this article include: When does the CPA apply to a lease agreement?

How does the CPA affect the termination of a lease agreement? Can the landlord still exercise his hypothec in terms of common law when tenants fail to pay rent?

The CPA does not apply in instances where the consumer (“the tenant”) is a juristic person (e.g. companies, CC’s, trusts, body corporates) whose annual turnover or asset value exceeds R2 million. Thus, if the tenant is a juristic person as determined above, neither the supplier (“the landlord”) nor the consumer can avail themselves to the provisions of the CPA.

Section 14 of the CPA applies to fixed term leases and deals specifically with the expiry and renewal thereof. Keep in mind that if both parties are juristic persons, this section does not apply, regardless of the annual turnover or asset value. Section 14 also doesn’t apply to once-off leases, in other words leases entered into which are not in the course of the supplier’s business. (An example of such an agreement would be if you leased your home in order to pay off your bond, as this is not done in the ordinary course of business.)

In terms of Section 14 a tenant may cancel a fixed-term lease in two ways, being either upon expiry of the fixed term period or at any time before expiry by giving 20 business days’ written notice to the landlord. The landlord has the right to impose a reasonable cancellation penalty, which can include lost rental or advertising costs in order to find a new tenant. The landlord must be able to prove the costs and they must be reasonable.

A landlord also has the right to cancel the lease by giving 20 business days’ notice, provided there has been a breach on the part of the tenant (such as failure to pay rent timeously as per the lease agreement) and he/she is given the opportunity to rectify such failure within the 20 day period. Should the tenant fail to rectify the breach, the landlord may cancel the lease upon expiry of the period. The implication of Section 14 is that all clauses in lease agreements which provide for immediate cancellation of the lease upon any breach by the tenant are unenforceable. It also further implies that eviction proceedings may only commence after at least 20 business days’ have passed since the breach, as the lease must be cancelled before instituting eviction proceedings, whether from residential or commercial property.

Should a tenant or the landlord not cancel a lease upon the expiry of the fixed-term period, the agreement will automatically continue on a month to month basis, or the tenant may agree to another fixed term period.

In terms of our common law a landlord enjoys specific protection against a tenant’s failure to pay rent, which is commonly referred to as “the landlord’s hypothec”. This essentially allows the landlord to attach any movable property on the leased premises belonging to the tenant if the tenant fails to pay rent timeously and to sell such property in order to recover the arrear rental amounts. Section 32 of the Magistrate Courts’ Act 32 of 1944 prescribes the procedure by which a landlord can attach and simultaneously remove the tenant’s movables from the leased premises in security of arrear rent. The good news for landlords is that this protection is not subject to the 20 days’ notice in terms of Section 14 of the CPA and the landlord’s hypothec and related remedies are unaffected. A landlord may therefore institute action for recovery of arrear rental immediately. It is thus only the cancellation of the lease agreement which requires 20 business days’ written notice.

REFERENCE LIST:

  1. Section 5(2)(a)- (g) and Section 14 of the Consumer Protection Act 68 of 2008
  2. Section 32 of the Magistrate Courts’ Act 32 of 1944

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.

WAT BELOOP MY BOEDEL SE BOEDELBELASTING?

WAT BELOOP MY BOEDEL SE BOEDELBELASTING?

A1blIn terme van die bepalings van Artikel 4 van die Boedelbelastingwet Nr 45 van 1955 word sekere aftrekkings (bekend as kortings) van die netto waarde van ’n boedel toegelaat ten einde die uiteindelike waarde te bepaal wat onderhewig sal wees aan boedelbelasting.

Die volgende twee kortings is oor die algemeen die bekendste:

  • Artikel 4(q) – Dit is die totale waarde van alle voordele wat aan ‘n nagelate gade bemaak word. Die waarde van ‘n vruggebruik kwalifiseer ook as ‘n Artikel 4(q) korting; en
  • Artikel 4A – Dit is die waarde van die korting wat op alle boedels van toepassing is en beloop tans R3.5 miljoen.

Gegewe die waarde van die Artikel 4A-korting sou mens dus met sekerheid kan sê dat jou boedel nie aanspreeklik sal wees vir boedelbelasting indien die netto waarde (bates minus laste) minder as R3.5 miljoen beloop nie. Die bedrag waarmee jou netto boedel R3.5 miljoen oorskry, sal egter belasbaar wees vir boedelbelasting, betaalbaar teen 20%.

Die Belastingwysigingswet het die werking van Artikel 4A-korting gewysig deur toe te laat dat die gedeelte van die R3.5 miljoen korting wat nie deur die eerssterwende se boedel gebruik is nie, oorgedra kan word na die boedel van die langslewende. Dié wysiging geld vir die boedels van alle persone wat na 1 Januarie 2010 sterf.

Die oordraagbare korting tussen gades kan aan die hand van die volgende voorbeeld verduidelik word:

  • Mnr A, wat met mev A getroud is, kom te sterwe. Die netto waarde van sy boedel is R800 000 nadat die korting ingevolge Artikel 4(q) bereken is.
  • Dié bedrag word aan sy kinders bemaak en is dus nie aftrekbaar vir boedelbelasting nie.
  • Daar is geen boedelbelasting-aanspreeklikheid nie, want mnr A se boedel het R800 000 van die Artikel 4A-korting van R3.5 miljoen gebruik.
  • By mev A se afsterwe is die netto waarde van haar boedel R8 miljoen. Die volgende korting is geldig vir haar boedel: Artikel 4A-korting ten bedrae van R7 miljoen minus die R800 000 aftrekking wat reeds gebruik is in die boedel van mnr A.
  • Mev A se boedel sal dus boedelbelasting betaal op R1.8 miljoen (R8 miljoen minus R6.2 miljoen).
  • R1.8 miljoen @ 20% = R360 000.

Indien die netto waarde van jou boedel dus meer as R3.5 miljoen beloop, kan die noodsaak-likheid van boedelbeplanning en ‘n testament wat jou die beste voordele gegewe die samestelling van jou bates en laste bied, nie genoeg beklemtoon word nie. Dit beteken ook nie dat die gebruik van trusts in boedelbeplanning nie meer ‘n plek het as gevolg van die groter korting in die langslewende se boedel nie. Daar is steeds goeie redes waarom die bemaking aan ’n trust deur die eerssterwende steeds ’n wyse besluit kan wees, selfs al het dit nie aanvanklik ’n besparing in boedelbelasting tot gevolg nie. In die geval van sodanige trust kan die bates deur die trustees tot voordeel van die langslewende gade en kinders geadministreer word. ‘n Klein bietjie moeite vandag vir baie gemoedsrus môre!

Hierdie is ‘n algemene inligtingstuk en moet gevolglik nie as regs- of ander professionele advies benut word nie. Geen aanspreeklikheid kan aanvaar word vir enige foute of weglatings of enige skade of verlies wat volg uit die gebruik van enige inligting hierin vervat nie. Kontak altyd u regsadviseur vir spesifieke en toegepaste advies.

HET U AL OOIT ’N BOEDELBEPLANNING LAAT DOEN?

HET U AL OOIT ’N BOEDELBEPLANNING LAAT DOEN?

A2blIndien u nog nooit boedelbeplanning gedoen het nie, is dit dalk ‘n goeie tyd om daaraan uitvoering te gee.

Dit sal slegs tot almal se voordeel wees, want daar is dikwels verskuilde uitgawes wat van krag word met afsterwe en nie gewoonlik in ag geneem word wanneer ’n kliënt sy/haar testament en die vererwing van sy/haar boedelbates beplan nie.

Hierdie uitgawes sluit die volgende in:

  1. Boedelbelasting;
  2. Eksekuteursvergoeding;
  3. Kapitaalwinsbelasting.

Bogemelde kostes het eerstens ’n direkte impak op die kontantposisie van die boedel en die vraag bestaan of daar genoeg kontant beskikbaar sal wees om die Eksekuteur in staat te stel om die boedel te kan afhandel, sonder dat dit nodig is om boedelbates te verkoop. Hierdie faktore kan die afhandelingsproses van die boedel drasties vertraag, met potensiële benadeling vir die erfgename.

Tweedens sal dit die versorging  van afhanklikes direk raak, aangesien die gemelde kostes uit die kontant van die boedel vereffen moet word. Dit kan dus veroorsaak dat die gade en kinders aansienlik minder sal erf as wat die erflater beplan het. Die party wat die slegste getref word, is die langslewende gade, wie gewoonlik die restant-kontant van die boedel erf.

Ongelukkig sal die feit dat u oor ’n juridies-korrek opgestelde testament beskik, nie noodwendig die antwoorde op die bogemelde vrae verskaf nie. Om dit aan te spreek, is dit nodig dat ’n behoorlike boedelbeplanning gedoen word, met die testament se bepalings wat getoets word aan die uitgawes vermeld, en kan die nodige wysigings dan nou aangebring word om die testament ook  koste-vriendelik te maak. Die uitleg van die testament het dus ‘n direkte invloed op die uitgawes hierbo vermeld. Spandeer nóu tyd daaraan om u testament op te trek en dit sal baie verdriet spaar wanneer u nie meer daar is om sake reg te stel nie.

Hierdie is ‘n algemene inligtingstuk en moet gevolglik nie as regs- of ander professionele advies benut word nie. Geen aanspreeklikheid kan aanvaar word vir enige foute of weglatings of enige skade of verlies wat volg uit die gebruik van enige inligting hierin vervat nie. Kontak altyd u regsadviseur vir spesifieke en toegepaste advies.

DIE VERBRUIKERSWET EN HUUROOREENKOMSTE

DIE VERBRUIKERSWET EN HUUROOREENKOMSTE

A3blGevoelens van verwarring en selfs opgewondenheid is voortspruitend wanneer daar van die Verbruikerswet (“CPA”) gepraat word- van Jan Alleman tot regsgeleerdes.  Die CPA is wyd van toepassing en selfs huurooreenkomste, of dit nou residensiële of kommersiële eiendom is, mag in sekere gevalle onderhewing wees aan die CPA. Die vrae waarmee hierdie artikel handel is: Wanneer is die CPA van toepassing op huurooreenkomste? Hoe affekteer die CPA die kansellasie van huurooreenkomste? Kan die eienaar steeds sy hipoteek in terme van die gemene reg uitoefen wanneer die huurder versuim om huur te betaal?

Die CPA is nie van toepassing in gevalle waar die verbruiker (“die huurder”) ‘n regspersoon is (bv. Maatskappye, CC’s, trusts) met ‘n jaarlikse omset of bates van meer as R2 miljoen nie. Dus, as die huurder ‘n regspersoon is soos hierbo vermeld, kan die partye nie staat maak op die bepalings van die CPA nie.

Artikel 14 van die CPA is van toepassing op vaste termyn huurooreenkomste en handel spesifiek met die verstryking en hernuwing daarvan. Hou egter in gedagte dat indien beide die huurder en eienaar regspersone is, geld Artikel 14 nie –selfs al is hul jaarlikse omset of bates onder R2 miljoen. Artikel 14 is ook nie van toepassing op sogenaamde eenmalige huurooreenkomste nie, met ander woorde huurooreenkomste wat aangegaan word buite die eienaar se normale gang van sake. (‘n Voorbeeld hiervan is wanneer ‘n persoon sy woonhuis verhuur om die verband te dek.)

In terme van Artikel 14 mag ‘n huurder die vaste termyn huurooreenkoms op twee wyses beëindig: óf deur die verstryking van die vaste termyn periode, of vóór die verstryking deur vir die eienaar 20 besigheidsdae geskrewe kennis te gee. Die eienaar mag in die tweede geval ‘n redelike kansellasiefooi hef, wat verlore huurbedrae of advertensiekoste om ‘n nuwe huurder te vind kan insluit. Die eienaar moet hierdie uitgawes kan staaf met bewyse en dit moet redelik wees.

‘n Eienaar het ook dienooreenkomstig die reg om die huurooreenkoms deur middel van 20 besigheidsdae geskrewe kennis te kanselleer. Daar moes egter wesenlike versuim deur die huurder plaasgevind het. As die huurder nie die versuim in daardie tydperk reggestel het nie, mag die huurooreenkoms dus kanselleer word. Die implikasie van Artikel 14 is dat alle klousules in huurooreenkomste wat voorsiening maak vir onmiddellike kansellasie in die geval van wesenlike versuim, onafdwingbaar is. Dit impliseer verder dat enige uitsettingsprosedures eers kan begin ná afloop van ten minste 20 besigheidsdae geskrewe kennis, aangesien die huurooreenkoms eers gekanselleer moet word voor daar met uitsettingprosedures begin kan word.

Sou ‘n huurder of eienaar nie die huurooreenkoms kanselleer met verstryking van die vaste termyn periode nie, sal die ooreenkoms automaties op ‘n maand-tot-maand basis verleng word, of die huurder mag instem tot ‘n verdere vaste termyn periode.

In terme van die gemene reg geniet ‘n eienaar beskerming teen ‘n huurder se versuim om huur te betaal deur middel van ‘n stilswyende hipoteek oor die roerende eiendom van die huurder. Die eienaar kan dus beslag lê op die huurder se roerende eiendom en dit verkoop ten einde die agterstallige huur te delg. Artikel 32 van die Wet op Landdroshowe 32 van 1944 skryf die proses voor waarmee die eienaar die huurder se eiendom kan verwyder as sekuriteit. Die goeie nuus vir eienaars is dat hierdie remedie nie onderhewig is aan die 20 besigheidsdae kennisgewing in terme van Artikel 14 van die CPA nie. Die eienaar kan dus dadelik aksie instel vir die verhaling van agterstallige huur en dit is dus slegs die kansellasie van die huurooreenkoms wat onderhewig is aan die 20 besigheidsdae kennistydperk.

VERWYSINGSLYS:

  1. Artikel 5(2)(a)-(g) en Artikel 14 van die Verbruikerswet 68 van 2008
  2. Artikel 32 van die Wet op Landdroshowe 32 van 1944

Hierdie is ‘n algemene inligtingstuk en moet gevolglik nie as regs- of ander professionele advies benut word nie. Geen aanspreeklikheid kan aanvaar word vir enige foute of weglatings of enige skade of verlies wat volg uit die gebruik van enige inligting hierin vervat nie. Kontak altyd u regsadviseur vir spesifieke en toegepaste advies.

BRING OUT THE BLING – CASUAL DAY – 5 SEPTEMBER 2014

BRING OUT THE BLING – CASUAL DAY – 5 SEPTEMBER 2014

1
Casual Day is one of South Africa’s foremost fundraising for people with disabilities and is the flagship project of the National Council for Persons with Physical Disabilities in South Africa. Casual Day has become a firm favourite on MHI’s calendar and this year was no exception.

With “Bring out the Bling” as the theme for this year, our office was bedazzled with glitter, diamonds and studs, making our ladies shine!2

Personeellede het geen moeite ontsien om hulself uit te dos in hul blinkste gewade nie en ons was verras met Anelda, die glimmende feetjie, Zelda, die “ekstra bling” musiekster, Vicki, die gemaskerde discobal en Ansie, so reg vanaf Broadway se verhoog met haar skitterende hoed en lyfkous. Ansie het met die louere weggestap as die blinkste ster vir die dag!
MHI het hierdie jaar weer hul LOSLIT kaartjies gekoop deur  PST (Presentation Software Training) vir die Paarl Skool in Brackenfell.  Elke plakker wat deur die skool verkoop is, het ‘n donasie van R4 aan die skool verseker wat weer aangewend word vir die aankoop van hulpmiddels en apparate vir die leerders.

It was once again a privilege for MHI to be part of this campaign, not only to spread the fun-bling vibes in the office, but to pay it forward and contribute to the well-being of those less fortunate.