Q: I have a client whose living partner is a
foreigner. If he transfers money from
overseas into her bank account to invest SA property, are there any tax implications
towards my client who is a South African citizen?
A: We assume the
property will be purchased by the non-resident.
We are of the view that
the mere use by the non-resident of the taxpayers bank account does not result
in an amount being received or accrued for income tax purposes as she has not
"beneficially received” the amount (OCHBERG v COMMISSIONER FOR INLAND REVENUE 5
SATC 93) as not every obtaining of physical control of money results in an
amount being "received (Commissioner for Inland Revenue v Genn and Co (Pty) Ltd
 3 All SA 382 (AD)).
It should however be
noted that exchange control regulations are different for no-residents than
residents and the non-resident would have to make sure that the relevant
declarations are made to ensure any funds can later be removed from SA without
restriction. Furthermore on disposal of the fixed property section 35A of the Income
Tax Act may apply as to the withholding tax imposed on non-residents on
disposal of SA based fixed property.
Disclaimer: Nothing in this query and answer should be construed as
constituting tax advice or a tax opinion. An expert should be consulted for
advice based on the facts and circumstances of each transaction/case. Even
though great care has been taken to ensure the accuracy of the answer, SAIT do
not accept any responsibility for consequences of decisions taken based on this
query and answer. It remains your own responsibility to consult the relevant
primary resources when taking a decision.
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