Specialising in tax and exchange control, Johan spent time with PwC in the UK, the financial capital of the globe, and on his return spent 3 years with PwC Cape Town in the Corporate International Tax department before joining STBB as a candidate attorney in 2011. Johan practices within the Corporate Commercial department and has extensive commercial drafting experience with a specific focus on business acquisitions, going-concern transactions and advises on tax aspects of commercial and property-related transactions. Since 2015 Johan heads the Non-Resident practice within STBB. His expert services range from assisting foreign investors in remitting their proceeds from fixed property out of South Africa and drafting and regularising loan agreements through the SARB to obtaining Tax Directives and various types of Tax Clearance Certificates from SARS. As an admitted attorney, conveyancer and registered tax practitioner, Johan’s skill set makes him an invaluable asset in advising and assisting STBB’s diverse clients.

Thought of the Week | Trusts – Interest On Loans

During the 2016 budget speech Minister Gordhan alluded to the amendment of the taxing provisions pertaining to loans made to trusts to curb the avoidance of estate duty and donations tax.

The draft legislation will apply to “direct and indirect loans made to trusts by natural persons who are connected persons or by a company that is a connected person in relation to such natural persons.”

The effect of the proposed amendments as follows:

  • where interest on loans are charged at less than the official rate (8% p/a), the interest not charged, or short charged, will be included as income and taxed in the hands of the lender (interest exemption not applicable). No deduction will be available to the trust as it paid no interest;
  • should the lender not recover the aforementioned tax paid from the trust (within a specific period), the lender will also be liable for donations tax on this amount.

The draft legislation will come into force on 1 March 2017. Contact STBB for assistance.