What happens when debt is waived?

Many natural persons or trust shareholders in companies are confronted with the unintended tax consequences of owing an amount on a loan account to the company in which they hold those shares. These tax consequences specifically relate to the “deemed dividend” which arises on interest-free loans (related to so-called “debit loans” in companies). In many cases, there is no intention to ever repay the […]

Donations tax

Donations tax is levied in terms of the Income Tax Act at 20% of the value of any property donated by South African tax residents. The tax is levied on the donor, although the Act does make provision for the tax to also be recovered from the person receiving the donation in certain instances if […]