Capital Gains on sale of buisness

[Basil959]

I "know" someone who is selling their buisness. The NAV is currently R50 000 and the total Assets are R4.7m.
They are the sole member but we could add their wife as a member before selling.
Does anyone know if there are any exemptions in the act which would apply in order to avoid capital gains on the sale?

The selling price is R5m...?

 

[HavocXphere]

Not something I'd ask on an IT focused forum.

Its a 5 mil business...pay the fkin 3k or whatever to get proper advice.

 

[Basil959]

come on.......
you are letting me down...

I told the wife the MBB would definitely know the answer to her question...

 

[DJ...]

Even legitimate spousal transactions can be nailed by SARS for tax evasion. If SARS can show that she was instituted as a member simply to avoid the company paying tax, then they have a case against you. They do get iffy about this stuff, and you seriously don't want to fsck up a sale agreement because of it.

Listen to Havoc. Get professional advice. That NAV seems incredibly low for a 5 bar valuation. You need to speak to a lawyer...

 

[DJ...]

come on.......
you are letting me down...

I told the wife the MBB would definitely know the answer to her question...

MyBB probably does. But there is hardly enough information there to give you what amounts to professional advice that would require pouring through the sale agreements, the founding documents, the financials, and various other pieces of information that you'd never share on an open forum...

 

[HavocXphere]

come on.......
you are letting me down...

I told the wife the MBB would definitely know the answer to her question...

You are mistaken my friend. There is a big difference between not knowing and not answering.

That particular part of CGT is not exactly straight forward. Hence me suggesting rather drop a couple of grand on grade 1 advice.

As for adding wife as a member: Broadly speaking, any type of clever tax scheme a layman can come up with is going to be crap. SARS has been doing this tax thing for a while (imagine that). Trust me...they are 5 step ahead of you no matter how clever you think you are. The only people who have any chance of legitimately out-maneuvering them is the prof. tax crowd. Which brings me back to my dropping 3k point...

That NAV seems incredibly low for a 5 bar valuation.

No arguing against that. Presumably OP has some business logic in it that we can't see yet.

 

[Paul Hjul]

Between the members of MyBB you will definitely be able to find the right answer but as DJ said there is a lot of information you wont be sharing on a public forum and on top of that you are looking for business advise of the nature for which you really should be paying.

Answers in broad strokes and pointing in directions as well as some general civics is what you can expect a volunteer knowledge base to give you.