PROPERTY ADVICE
PROPERTY ADVICE
TRANSFERRING OF PROPERTY & ASSETS
QI have been advised that I must consider transferring my properties and assets out of a Trust structure due to the fact that SARS and the Finance Ministry are changing the tax treatment of trusts and loans to trusts what must I do?
JOSE DELGADO iProtect
“ The question you have raised is a major dilemma for most people who have structures in place. Currently the Davis Tax Committee is reviewing our tax laws and has made a number of recommendations. Treasury has also put out a draft taxation laws amendment bill that has many in a quandary as to what they must do with assets held in trust structures.
Our standard reply is to wait and see. The Bill has already morphed from its original form and a number of the amendments are unconstitutional and may not pass muster. Further if the bill becomes law it may be challenged in court.
So as difficult as it may be, you must sit on your hands until there is clarity on what the law may become. That aside we have a number of solutions to your dilemma in the event that the law does change, so hang in there for now.”
OFFSHORE INVESTMENT IN THE UK
QI have R2 million that I would like to invest. I have heard that offshore property is where the best returns are coming from currently. Is that true? Secondly, is the`UK is a great market to invest in right now? How and where would you suggest that I go about investing directly into that market?
WARREN BRUSSE UK Property Partners
The South African Real Estate Investment Trusts( REITS) offshore sector has performed in excess of 12 % returns consecutively for 10 years. At that time the sector had no exposure to offshore markets and so far this year, 37 % of earnings derive from markets including the UK, Australia, Central and Eastern Europe.
The main benefits of investing in offshore property offer diversification, a Rand hedge and investment in larger and more stable economies.
The UK market on the whole can be described as high buying demand, high rental demand, high rental yield, low interest rate, highly cashflow generative, medium capital growth, investor friendly lending, strong currency and stable employment economy.
One has three distinct investment options in my opinion: Firstly, establish you own property investment business and grow your own portfolio. One would need to work with professional property sourcing, refurbishment and management partners to make this happen. Individual or partnership type structures are possible, but bank lending is very restrictive. Secondly, invest with an established property investment partner on a Loan Capital basis. A securitized and guaranteed way of earning interest on your capital. Thirdly, invest with an established property investment partner on a Share Capital basis. This option is only available to high net worth clients and would need to comply with the Financial Conduct Authority.
The main investment areas that I personally focus include Birmingham, Kingston upon Hull and North East Lincolnshire.
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6 DEC / JAN 2017 SA Real Estate Investor www. reimag. co. za