Income Tax Act S35A explained
- 7.5% in the case of sale by a natural person
- 10% where the seller is a company
- 15% if the seller is a trust
Any over or underpayment of taxation arising from the WHT calculation would be determined upon assessment of the final tax liability for the year.
Implications for the non-resident seller
- If you are a non-resident taxpayer and the price of the property sold exceeds R2m, the sale would be subject to withholding tax.
- You are obliged to advise both the buyer and the conveyancer of your non-resident status.
- The conveyancer bears a statutory obligation to withhold the sum due under S35A and pay it to SARS within 21 days of transfer.
The take out…..
It is important that there is communication between the seller, the conveyancer and the tax professional acting on behalf of the seller, to promptly apply for the directive where circumstances warrant a lower tax rate on the sale, as this could have significant impact on the cash flow of the seller.
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