1.Have you got your TD7 form yet? Form for reporting details of transactions where company- or CC- or trust-owned residential properties are sold 2. New Annual Return New legal obligation to lodge return with the Companies & Intellectual Property Regulatory Office 3. Buy a brick at the home of IEASA WCape.



Have you got your TD7 form yet? In our February edition, when we discussed tax matters, we drew your attention to the fact that estate agencies are now required by law to report to the SA Revenue Service details of transactions where company- or CC- or trust-owned residential properties are sold, so that SARS can make sure that transfer duty is paid. We noted that SARS had not yet issued the necessary report form. Well, it’s now available. It's form TD7, and we recommend that you obtain one and keep it as a master copy. As you will recall, until December 2002 people could buy and sell property without paying transfer duty if the property was already registered in the name of a company, a CC or a trust, and they kept it in that entity's name. As there was no change of registered ownership in the Deeds Office, there was no transfer duty. Since December 2002, however, such entities have been defined as "residential property companies", and transfer duty has been payable on the transfer of ownership of the company, rather than of the property itself. Evidently SARS has been having some difficulty keeping track of such transactions, and so now estate agents are required to inform SARS of each such transaction which they negotiate, so that SARS can follow up on the payment of transfer duty. So, from now on, whenever you sell a property owned by a "residential property company" (or trust) by means of selling the company (or trust) itself, you must fill in a TD7 form, and send it to SARS. You must do so not later than six months after the sale was concluded. Fortunately, it's a simple and user-friendly one-page form. The details which you need to fill in are: the transferor's (i.e, seller's) name and phone number, the transferee's (i.e. buyer's) name and phone number, the name and registration number of the company, and details of the property. You also have to provide the following information about yourself as the estate agency: the name of your firm, the name of the individual agent involved in the sale, the amount of commission which you will be paid for the sale, and your firm's VAT registration number. This suggests to us that SARS will cross-check against your firm's VAT and tax payments, and your agent's income tax, to make sure that tax is paid on the commission. The form must be signed by the estate agent (presumably the principal or manager of the firm), and the firm must keep a copy on file for five years. As usual, there are penalties for non-compliance: prosecution and, if convicted, a fine or imprisonment. What if the client asks you not to submit the form? We recommend that you tell the client very clearly that you have to do so, and that if the client gives you any reason to think that he/she is going to try and wriggle out of paying the transfer duty, then you are obliged to report him/her to the Financial Intelligence Centre on suspicion of tax evasion. You can download the form from the SARS website: www.sars.gov.za For specialised advice, contact your local SARS office or a conveyancer. New Annual Return If your estate agency firm is registered as a (pty) ltd company or a close corporation, then it has a new legal obligation. Like all other companies and CCs, it now has to lodge an annual return with CIPRO (the Companies & Intellectual Property Regulatory Office, formerly known as the Registrar of Companies and the Registrar of CCs). This is part of the revised company legislation which was passed some time ago. The due date for lodging the return depends on the month (irrespective of year) in which your company or CC was originally registered. If it was registered in May, then the return is due by the end of June. If it was registered in June, the return is due by the end of July, and so on. A fee, ranging from R450 to R4000 depending on company turnover, must be paid when the report is lodged, and if it’s late a R150 fine will be levied. If it's more than six months late, CIPRO can de-register your company or CC. A sign of the times is that the return and the payment must be submitted electronically, through the CIPRO website. CIPRO will not accept paper documents or cash. This is something which your company secretary or accountant or accounting officer will probably take care of, and we recommend that you speak to him or her about it as soon as possible. You can also visit the CIPRO website: www.cipro.co.za A NOVEL GIFT IDEA In the foyer of our offices in Pinelands is our Membership Wall. IEA members can buy individual bricks, displaying their names, as permanent reminders of their association with the Institute and the industry. The latest brick bears the name of Kevin Parkin, an IEA member in the Tygerberg area. It was a gift from his wife Anne, and they came along to our offices for a special brick-laying ceremony. What a novel idea for a gift! It's certainly a first for us. If anyone else is interested in buying a brick (which is actually a gold-coloured rectangular plaque) as a gift or in their own names, please contact Kate at 021 531 3180 or email kate@cape.ieasa.org.za