Q: Please advise
what the VAT implications would be in the following situation:
A farming property is awarded and transferred to an heir in
terms of the will of the deceased. The deceased is not registered for VAT and
neither is the beneficiary.
A: We assume that
the deceased was not required to be registered under the Value-Added tax
Act. Section 53 of the Value-Added Tax
Act would then not apply. The mere fact
that the value of the goods (the farming property) may exceed R1 million does
not mean that the estate has to register as a vendor – see the proviso to
section 23(1). Based on the assumptions
the transfer of the farm to the heir will have no value-added tax
consequences. The transaction should be
exempt from transfer duty.
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.