Recently we have come across clients who, in the past, purchased properties in a Company, CC or Trust and now have sold the property and wish to repatriate the funds, but are having difficulty in doing so as the Reserve Bank is extremely strict when it comes to the repatriation of funds in respect of Companies, CC’s or Trusts.
Clients who purchased property in the name of a Company, CC or Trust were not told at the time that they needed to have an annual audit and also submit regular annual returns to the Receiver of Revenue.
It was understood at the time of purchase that this was indeed the way to go when purchasing property in SA as there was then no transfer duty payable, however tax is still payable on immovable property whether it be in the name of private individual or a Company, CC or Trust. The rates vary accordingly.
On sale of the property before repatriation of the proceeds can take place, the Reserve Bank has to be satisfied that all the correct documentation is in place and this includes all the financial and company documents.
To obtain tax clearance all taxes due have to have been paid.
What must be noted is that if the documents are not in place and no financials have been done at the time the property is sold, it can take months to get all the necessary documentation together and invariably the bank request that the matter be put in as an application which is also a time consuming process.
If a client owning a property in a Company, CC or Trust is in the process of selling or thinking of selling, it is suggested that you contact us to check what documentation is available to avoid delays in the repatriation of funds.