The TLAB seeks to expand the definition of a "property company," as contained in the Act to address the inadvertent exclusion of foreign companies from the definition. The previous definition made reference to companies whose financial statements were prepared in accordance with the Companies Act of South Africa. Foreign companies are not subject to the Companies Act (and are not obliged to prepare annual financial statements in accordance with this Act) and it has been proposed that the definition be extended to include companies who prepare financial statements in accordance with IFRS. This amendment is proposed to be retrospective, with effect from 1 April 2013 (ie from the date that the REIT provisions were introduced).
A further change to the REIT provisions is in relation to the CGT relief available to a REIT or a controlled company in relation to a REIT (controlled company). The proposed change, which relates to the disposal of immovable property by a REIT or a controlled company, narrows the relief available and provides that the disregarding of an aggregate capital gain derived by a REIT or a controlled company from the disposal of immovable property will only be applicable to the extent that the person making the disposal is a REIT or a controlled company in relation to a REIT at the time of the disposal. Previously, it was only required that the REIT or controlled company be a REIT/controlled company at the end of the year of assessment and not necessarily at the time of disposal. This proposed amendment is to apply in respect of years of assessment ending on or after the date of promulgation of the TLAB.
Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.