Buy and Sell Policies

Subject: Re: Buy and Sell Policies Tue Apr 05, 2011 9:37 am

Andrew M van Dam wrote:: Thanks Bart for setting this up. I think many will benefit from common situations being discussed openly here and all can see the answers to those common issues relating to similar situations.Inventing one wheel for all as it were instaed of everyone trying to invest one individually.

Our pleasure Andrew...hopefully we get as many people contributing and learning at the same time. Regards

Posts : 9 Join date : 2011-04-04

Thanks Bart for setting this up. I think many will benefit from common situations being discussed openly here and all can see the answers to those common issues relating to similar situations.Inventing one wheel for all as it were instaed of everyone trying to invest one individually.

Posts : 18 Join date : 2011-03-30 Location : Centurion

Admin wrote:: What about Buy and sell policies, cessions and second hand policies being CG taxable. I have two companies where the shares of the shareholders have been transferred to their respective trusts. Ceding these policies to the trusts constitutes them second hand and thus CG taxable. One legal advisor suggested we make the trusts the beneficiaries and then cede them to the ‘connected person’ being the trust and thus avoiding the tag of ‘second hand’ and thus avoid the proceeds in the event of a claim being CG taxable. This was obviously not the intention i.e. proceeds of life assurance being CG taxable if deemed ‘second hand’. Is this issue also being addressed in the same forum?

Your enlightenment would be greatly appreciated

SARS issued a binding private ruling (BPR 098) on 24 March 2011 on par. 55(1)(a)(ii) of the 8th Schedule to the ITA regarding CGT on ceded policies. Take special note of the conditions and assumptions.
Please see the attached document (Thanx to Corlia van der Merwe of Momentum)

Attachments

Capital gains tax on ceded policies.pdf: You don't have permission to download attachments.; (30 Kb) Downloaded 8 times

Posts : 18 Join date : 2011-03-30 Location : Centurion

Admin wrote:: Are buy and sell policies unaffected?

No, buy and sell policies are not affected. They are not intended to be company owned policies

Subject: more Wed Mar 30, 2011 12:35 pm

Are buy and sell policies unaffected?

Subject: Buy and Sell Policies Wed Mar 30, 2011 12:20 pm

What about Buy and sell policies, cessions and second hand policies being CG taxable. I have two companies where the shares of the shareholders have been transferred to their respective trusts. Ceding these policies to the trusts constitutes them second hand and thus CG taxable. One legal advisor suggested we make the trusts the beneficiaries and then cede them to the ‘connected person’ being the trust and thus avoiding the tag of ‘second hand’ and thus avoid the proceeds in the event of a claim being CG taxable. This was obviously not the intention i.e. proceeds of life assurance being CG taxable if deemed ‘second hand’. Is this issue also being addressed in the same forum?

Your enlightenment would be greatly appreciated

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