Page 4 - KZN BUSINESS SENSE Vol.2 NO.6

can ProPosED trust lEgislation bE trustED?

Tertius Troost, CA(SA), Tax consultant National Treasury has addressed section 31 applies, loans provided to equal to, or less than, R 1 250 000 payable by the taxpayer would
at Mazars the unintended consequences a trust in terms of Sharia compliant will not be paying any additional amount to R 140,000 per annum
by providing for a number of finance agreement and trusts tax since the deemed donation will [{(R10m x 8%) – 100,000} x 20%].
s anticipated, the proposed situations where the proposed with a loan which has already be equal to, or less than, R 100 000
amendments to the trust section 7C will not be applicable. attracted dividends withholding tax (R1 250 000 x 8%). Therefore, the Notwithstanding the above,
Alegislation attracted the These include trusts that are Public (according to section 64E(4)). annual donation tax exemption the amendments appear to only
most public comment in the draft Benefit Organisations, vesting of section 56(2)(b) will result in be the beginning. Taxpayers
response document to the draft trusts, special trusts established Overall, we see that the new draft the taxpayer paying no donations should grow accustom to the
Taxation Law Amendment Bill, solely for the benefit of persons amendments to section 7C is aimed tax. However, in the situation where words “amendments to trust
2016 (TLAB). The commentary with disabilities, loans used to at high net worth individuals. As a taxpayer has an interest free loan legislation”. 
and questions raised seemed to fund the acquisition of primary the proposed legislation currently equal to R 10 million owing to a
alert National Treasury to the fact residence in a trust, loans to which reads, taxpayers with an interest trust, the donations tax charge www.mazars.co.za
that the new legislation had some the transfer pricing legislation in free or low interest loan to a trust of
unintended consequences.
This led to the issuing of a
second batch of draft legislation on
21 September 2016, with further
amendments to the proposed
trust legislation. Although it
appears as though the additional
amendments may satisfy some
of the concerns raised by the
public, it simultaneously adds new
concerns.
The most significant amendment
relates to the taxation of the
notional amount that must be
calculated on low interest or
interest free loans to trusts. It is
still proposed that the notional
amount be calculated as the
difference between the interest
determined with reference to the
official rate of interest (currently
8% per annum) and the actual
interest rate of the loan. However,
the new proposed amendments
is a slight improvement to the
previous amendments, because
it taxes the notional amount as
a donation (subject to a 20% tax
rate) instead of income (which
could be subject to a maximum of
41%). Furthermore, the proposed
amendment to the restriction on
the use of the R 100,000 annual
donations tax exemption against
the outstanding loan balance has
also been removed.

occuPational hEalth anD safEtY act 85 of 1993 anD

comPliancE?

Bryan van den The act has a determination in Start at the gate of your business building regulations changed and more on your plate with regards to
Heever, Hesscon that the employer shall do what is and identify the hazards of all the building industry is in a panic compliance than an office in town.
C see that it’s not a blanket policy you identify these then we can start and or safety officers on building means with everything relevant
to comply. Some safety consultants
reasonably practicable. So we can
processes in your business. Once
Remember when I say comply it
but a case of go and check what
sites are very strict and some are
to your business. Let’s define it “a
the work.
The breakdown in my view to
not”. She can’t be 80% pregnant.
pushed from pillar to post. Some
ompliance to you need to do and implement. The act has to be read in totality. not. However, the contractor is now women is either pregnant or she’s
the OSH act complying with the act starts with What do I mean by this? The act sites’ safety management plans
in South perception. Many employers have says that if you have between one (safety file) are accepted and some Make yourself aware of the
Africa is told me, “but I have a first aid box and 19 employees you do not need a sites not. Even service providers requirements or get some assistance
a huge and fire extinguishers”. Yet, he health and safety rep. However, you battle with this compliance issue. to help implement what is needed.
challenge. manufactures hazardous chemicals work with hazardous substances. Unfortunately it’s viewed as a Remember you have a moral
This act, on site. The OSH act does not tell Would you say that you have done non-exact science seeing that the obligation to your staff, visitors and
however, is you exactly what to do but rather what is reasonably practicable even safety standards differ from site to contractors to ensure their safety
a criminal gives a guideline. though your risks in the business site causing huge frustrations to and health on your sites. 
act will be very high? the employer to get his team on the
that many employers in general We need to start at the beginning The higher the risk in the business site. Remember the same employer Office: 087 941 7180
ignore. The bigger industries like to comply. Namely, the employer the more you need to do to comply. needs to comply. So if your team bryan@hesscon.co.za | www.hesscon.co.za
manufacturing and processing take has to do a risk assessment on the The regulation in the act is the has to have a medical in the file
compliance seriously. Also they entire business and its effects on its muscles on a skeleton. The skeleton that’s valid then it needs to be in the
often have international investors neighbours. The risk assessment being the actual act. Complying file to comply with the regulation.
and the international standards does not have to be a complicated
that follow, with which to comply. document with colours and with the regulations is of utmost In short if you are a building
numbers that no one understands. importance. For example the contractor then you will have way

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