The submission comments on SARS’s Draft Interpretation Note on section 7C of the Income Tax Act, which addresses interest-free or low-interest loans granted by connected persons to trusts and the resulting deemed donations. While broadly supportive of the draft, SAIT seeks clarity on several interpretational issues, including the taxation of loan repayments versus interest, the continued applicability of section 7C where assets are sold to trusts on low- or no-interest loan accounts, and instances where advances below market-related rates are made. The submission also proposes clarifications and amendments regarding the definition of connected persons (particularly involving companies and trusts), the donations tax declaration threshold, and the interpretation and application of the primary residence exclusion, including confirmation that no apportionment is required.
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