Real Estate Investor Magazine South Africa Dec/Jan 2016/17 | Page 8

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