Q: One of our clients is a member of a CC. He
currently uses a vehicle registered in the name of the CC, but wants to
transfer the ownership of the vehicle in his personal capacity. How do we go
about doing this, without having any tax complications? We want to register the
vehicle in the member's name, so that the CC can pay him a travel allowance,
and do away with the fringe benefit. How do we go about transferring a
vehicle registered in a CC's name to a member's name?
A: We assume he is an employee or office holder of the CC. The disposal of an
asset to an employee must be for a consideration equal to the market value of
the vehicle otherwise a taxable benefit will apply in terms of para 2(a) read with
para 5 of the Seventh Schedule of the Income Tax Act.
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.
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.